Germany's Entfernungspauschale (commonly Pendlerpauschale) is the single most useful work-expense item for employees who commute. It deducts a flat per-kilometer amount as Werbungskosten and reduces your taxable income. The actual savings depend on four levers: distance, working days, mode of transport and your marginal income tax rate. Run them through the Distance Allowance Calculator to see your number in seconds.
Legal basis
The deduction is anchored in § 9 Abs. 1 Nr. 4 EStG. It compensates the regular cost of getting to your first place of work — independent of how you travel. Car, train, bicycle, carpool, on foot: same rate, same logic.
The Entfernungspauschale is not the only commuting-related deduction. Employees with a job-related second residence may also claim a double household deduction — the weekly home trips use the same per-kilometer tariff but stack on top of separate housing-cost deductions.
The tiered rates: €0.30 / €0.38
Since 2022 a higher rate applies to longer commutes — a political response to fuel-price spikes:
- km 1 to 20: €0.30 per one-way kilometer
- km 21 onwards: €0.38 per one-way kilometer
The daily rate formula is:
Daily rate = min(km, 20) × €0.30 + max(km − 20, 0) × €0.38
The annual deduction is daily rate × working days.
Three examples
- 15 km, 220 days, car: 15 × €0.30 × 220 = €990
- 30 km, 220 days, car: (20 × 0.30 + 10 × 0.38) × 220 = (€6.00 + €3.80) × 220 = €2,156
- 60 km, 220 days, car: (€6.00 + 40 × €0.38) × 220 = €21.20 × 220 = €4,664
The €4,500 cap — the decisive cliff
If you do not use your own motor vehicle — meaning train, bus, bicycle, walking, or carpool passenger — you are capped at €4,500/year. This is the most common mistake on tax returns: people enter €6,000, the tax office strikes the difference.
If you commute by your own car, there is no cap. Driving 100 km each way over 230 days yields ≈ €8,522 — fully deductible. Proof is light: fuel receipts, garage bills, vehicle tax notice. You don't even need to own the car — leasing or driving a family vehicle counts, as long as you're the regular driver.
Tip: Mixing transport modes is allowed. Days driven by car are uncapped; days on public transport go into the €4,500 bucket. You list both separately on your return.
The mobility premium — a hidden lever for low earners
If your taxable income is so low that your marginal rate stays below the entry-level rate (14 %), the deduction does nothing — there's no tax to reduce. That's where the mobility premium under §§ 101–109 EStG kicks in:
- 14 % of the second-tier mileage allowance — only the €0.38 portion above the first 20 km
- Paid out as a tax refund, even if you owe no income tax
- Requires an explicit application form (Anlage Mobilitätsprämie)
Example: Lukas earns €14,000 gross, commutes 30 km, 220 days. His marginal rate sits at ≈ 9 % — below the entry-level rate. Second-tier mileage × days = 10 km × €0.38 × 220 = €836. Mobility premium = €836 × 14 % = €117.04 as a refund. Small in absolute terms — meaningful for his income bracket.
Is the deduction always worthwhile?
Often-overlooked: the tax office automatically subtracts a €1,230 standard work-expense lump sum (§9a Nr. 1a EStG) from every employee's gross income. The Entfernungspauschale only kicks in once your total Werbungskosten — distance allowance plus tools, training, application costs — exceed that lump sum.
Rule of thumb: at 230 working days and only the distance allowance, you need about 16 km one-way before the deduction beats the lump sum:
16 km × €0.30 × 230 days = €1,104 (still under lump sum) 17 km × €0.30 × 230 days = €1,173 (still under lump sum) 18 km × €0.30 × 230 days = €1,242 (first euro of real benefit)
If you have other work expenses (work laptop, training, office supplies), the threshold is lower. Multiply each euro above €1,230 by your marginal rate to see your real savings. Estimate the rate using the income tax calculator or the gross-net calculator.
Which days count?
Only days you actually commuted to your primary workplace. Specifically:
- Holidays: not deductible
- Sick days: not deductible
- Home-office days: not deductible (separate home-office lump sum: €6/day, max. €1,260/year)
- Business trips: not via the Entfernungspauschale, but as travel expenses (€0.30/km round-trip)
Typical full-time year: 220–230 days. The tax office accepts that without itemized proof, as long as the figure is plausible. Higher numbers should be backed by a calendar or attendance log.
Filing on the tax return
Entries go in Anlage N (employee income) under Werbungskosten. ELSTER asks for:
- Address of the primary workplace
- One-way distance in km (shortest road route — Google Maps, route planner)
- Working days per mode of transport
- Mode of transport (car or other)
A longer route than the shortest can be accepted if it is clearly more convenient (significantly faster, less congestion). The benchmark is the regular commute, not the worst traffic day.
Pauschale vs. actual costs
For public transport you have a choice: if your actual ticket costs exceed the €4,500 cap, you can elect to deduct the documented expense under §9 Abs. 2 EStG. A €9,000/year Frankfurt season pass, for example, often beats the cap.
For own car the comparison rarely matters: fuel, insurance, depreciation and repairs typically come out below €0.38/km. The tiered rate is generous — which is also why there is no cap for cars.
Special cases
Carpooling
Passengers claim the regular allowance, capped at €4,500. The driver uses their own vehicle and stays uncapped; payments from passengers are not deducted from Werbungskosten — they are private compensation, not a reduction.
No fixed workplace
Construction workers, field-sales staff, consultants without a fixed primary workplace receive no Entfernungspauschale. They claim travel expenses instead: €0.30/km round-trip, no cap. This is often the better deal because every kilometer counts twice.
Family home trips
Employees with a double household claim one weekly home trip on top of the regular commute, also via the distance allowance. See the post on double household tax deductions for the full mechanics.
Three common mistakes
- Round-trip distance entered: the form expects one-way km only. Entering 60 km for a 30 km commute hidden-doubles your distance and underclaims the rate.
- Ignoring the public-transport cap: €4,500 is hard. Only switch to documented ticket cost if it actually exceeds the cap.
- Mixing home-office and commuting: the two lump sums are mutually exclusive per day. A home-office day yields the €6 lump sum, not the distance allowance.
Making savings tangible
What's the real win? At 30 km, 220 days and a 35 % marginal rate, a household saves roughly €754 per year — about €63 per month. To compare across your own profile, run both the distance allowance calculator for the deduction itself and the commuter allowance calculator for a faster summary view. Place the figure into the income context with the income tax calculator.
Bottom line
The Entfernungspauschale is more than a single check-box. Three levers shape the outcome: mode of transport (cap or no cap), distance (the second-tier rate beyond km 20), and marginal rate (tax savings vs. mobility premium). Knowing them keeps €200–€800/year from quietly disappearing.