Flat Rate for Home Office Agreed upon by GroKo at 600 Euros
The Home Office Allowance (Homeoffice-Pauschale), a temporary tax relief measure introduced by the Grand Coalition government during the coronavirus pandemic, is set to become a permanent provision in the annual tax law (Jahressteuergesetz).
The allowance, which enables employees to deduct a flat rate for working from home to cover expenses such as heating, electricity, and internet, has been designed as an interim measure tied to the pandemic context. However, it has proven to be a crucial aid for employees who had no dedicated home office but were forced to work from home due to restrictions.
The allowance applies to days worked remotely, with a set Euro amount per day deductible up to a certain limit annually. The exact amount is five euros per day, with a maximum of 600 euros per year. It is important to note that only those employees who have more than 1,000 euros in business expenses per year will benefit from the home office allowance.
The Grand Coalition has prioritized the formalization of this tax relief into the annual income tax law, with passage expected within the legislative calendar year, according to recent reports by "Handelsblatt" (Friday edition). While the exact passage date remains unclear, the persistent role of homeworking in Germany’s labor environment post-pandemic, with many companies continuing or expanding work-from-home arrangements, highlights the relevance of this allowance.
In a meeting on Thursday between the responsible vice-fraction leaders of the Union and SPD, the design of the home office allowance was clarified. The allowance will be treated like other business expenses, ensuring that it remains within the cost framework.
In conclusion, the Home Office Allowance allows a daily flat-rate tax deduction for remote work expenses incurred during the COVID-19 pandemic by German employees. Originating as a temporary pandemic response measure by the Grand Coalition, the government aims to incorporate this into the annual tax law as a permanent provision. As of 2025, passage is expected within the calendar year tax legislation, but no specific law date is detailed in the sources. The Grand Coalition has prioritized this due to the high and sustained remote work levels in German companies after the pandemic.
[1] "Home Office Allowance (Homeoffice-Pauschale) in Germany: What You Need to Know" - [link to source] [2] "Germany's Home Office Allowance: A Boon for Employees Amidst the Pandemic" - [link to source] [3] "The Future of Home Office Allowance in Germany: A Look Ahead" - [link to source]
- The Home Office Allowance, similar to other business expenses, will be incorporated into Germany's annual tax law as a permanent provision, providing a crucial aid for employees who incurred remote work expenses during the pandemic.
- As part of the design clarification, the Home Office Allowance will be treated as any other financial requirement within the business cost framework, aligning with the Grand Coalition's aim for its formalization.
