Navigating Tax Refunds and Utility Costs: Working From Home in Germany

If you’re working from home in Germany, there are a couple of important things you really need to know about your tax situation.

In fact, whether or not you have a strong grasp of your tax entitlements could be the difference between receiving a tax refund and being left empty-handed!

In this blog post, we'll explore the impact of working from home on your utility expenses and your tax refund in Germany. We’ll look at key topics, such as whether there's a tax rebate for working from home and how you can identify deductible utility expenses.

Is there a tax rebate for working from home in Germany?

Many people wonder whether they can get a tax rebate for working from home in Germany.

In short - you may be able to claim working-from-home tax relief in Germany, through a ‘home office’ tax credit.

However, there are very specific circumstances you need to meet.

If your work was at a desk in your living room, bedroom or guest room in your house, it is unlikely that you will benefit from this.

Why? Well, this is in part due to the fact that the tax office of Germany is very strict about how they differentiate a “study” compared to a “home office”.

The German tax office defines a “home office” as somewhere in your home where you are working, but defines a “study” as a room that is used for work and work only.

The good news is that if the study does meet the requirements of the tax office, you will be able to claim a portion of your rent back - as well as some water, heating and electricity bills. Remember, these will be in proportion to the room size.

There is even a chance for you to claim any furnishing or renovation costs for the room.

Is there a home working allowance in Germany?

Just because your room does not meet the requirements of a ‘study’, doesn’t mean you won’t be able to claim anything back.

That’s because you may be able to apply for a credit known as the “home office lump sum”.

This was introduced to German workers when COVID-19 hit in 2020 as a way of compensation for higher electricity, heating and internet bills due to more time spent at home.

The total amount that you can claim if it is applicable to you is €5 per day of remote work, for up to 120 days - a grand total of €600.

For the tax year 2023, this was increased to €6 per day, for a maximum of 210 days, which makes a grand total of €1260.

Can I claim work-from-home relief in Germany if I also work in the company's office part-time?

If you worked from home on a hybrid basis, you will not be able to claim the credit on the days you worked in the office.

However, there is a commuter allowance available to workers travelling to their offices.

If you worked half of the day in the office and half of the data at home, you will be able to claim either the "home office" or "home office lump sum" for the days you worked from home.

Also, note there is a commuter allowance available to workers travelling to their office.

Apply for your German tax refund!

What other work-related German expenses can I claim?

There are a variety of expenses you can claim that are related to your job which can help to offset your tax bill when claiming your tax back in Germany.

Equipment for work

If you have to purchase a piece of equipment for your job, you may be able to claim a tax relief on the cost.

Where the item is less than €952 and 19% VAT, it can be claimed back instantaneously.

Just a few examples of work equipment include:

Clothes for your job - like a doctor's coat or boiler suit
Hardware - phone, laptop, etc
Software
Office space equipment - desk, office chair, etc
Tools
Literature

In some cases, these will be items that you also use privately that are called “mixed-use work equipment”.

If the private share use of work equipment amounts to less than 10% of the total use, so that professional use amounts to more than 90%, the work equipment costs are 100% deductible.

If the proportion of professional use is less than 10%, so that private use is more than 90%, the costs are not deductible at all.

If the private and professional usage portions are between the above limits, you must split the costs.

Insurance

If you had to purchase insurance to cover for occupational risk, you’d be able to claim it as a work-related expense.

Some of these cases include professional liability, accident insurance, and legal expenses insurance.

However, this does not cover cases of private risk, like health insurance, private nursing insurance, life insurance, personal liability insurance, and legal costs insurance.

While these are not included in work-related expenses, you may be able to deduct them as an additional expense.

Can Taxback claim German work-related expenses?