Accommodation flat rate

Many employees and self-employed people are familiar with the fact that travel is increasingly becoming an integral part of their job. Of course, there are always costs that need to be covered. A large proportion of these costs arise from accommodation expenses, whereby the flat-rate accommodation allowance applies.

What is the accommodation allowance?

The accommodation allowance is part of the travel expense report and amounts to €20 per day in Germany. The payment is tax-free for employees, but the company may not mark it as a business expense.

Each company decides individually whether the accommodation costs are covered by the employer; there is no legal entitlement. As an employee, you are advised to collect and keep all receipts, which can be taken into account in your income tax return.

Likewise, there is no legal entitlement to payment of the overnight allowance. If the employer pays no or only a low overnight allowance, these allowances may not be taken into account in the income tax return. If you spend the night on a train or plane, no overnight allowance is paid.

For foreign countries, the corresponding foreign flat rates apply, which may change annually. These amounts are published annually by the Federal Ministry of Finance and vary from country to country and sometimes even from city to city. In 2020, for example, the overnight allowance for London is €224, but in the rest of the UK it is €115.

Billing methods for the overnight flat rate

You can claim the flat-rate accommodation allowance, but you can also have the actual costs covered by the employee, provided this has been clarified in advance.

If the costs are not covered by the company, the employee can deduct them as advertising costs. In this case, the receipts should be kept.

This is because the lump sum for advertising costs is only €1,000 and this is quickly exhausted. After that, you should consider whether it is not more worthwhile to cover the actual costs.

Advantages of the overnight flat rate

Up to this point, it all sounds laborious and hardly worthwhile, but the overnight flat rate does have its advantages.

Before you start work, you should always clarify how you will be billed. If you are staying with friends or relatives, no lump sum may be charged.

However, more and more companies are using the accommodation allowance to motivate their employees and reward their performance. This is because the expenses can be deducted by the company as operating costs and the employee is not burdened with additional social security contributions or payroll taxes. The tax structuring options, for example through allowances and bonuses, can be customized. And depending on the case, there can be a lot in it for the employee. Talking to your supervisor before starting your trip can therefore pay off in several ways.

• Make the most of the advantages: If you travel abroad a lot, you can quickly earn extra tax-free salary with your business trips. If you spend 3 nights in Italy, for example in Naples, and the room costs €40/night, but your employer pays the €100 flat rate, you can pocket the difference of €60. Tax-free. With three overnight stays, this means an extra €180 in salary.

The best thing is that you can switch between the two models for each trip. So when traveling abroad, it’s worth settling with the flat rate and keeping the difference. For domestic trips, the actual costs should be paid, as €20 per night is not realistic. Sometimes the company even provides a luxury hotel to make business trips more attractive or, as mentioned above, to reward good performance.

Lump-sum accommodation allowance for the self-employed?

No longer available since 2018. Self-employed persons should therefore be sure to keep the original receipts and submit them with their tax return as business expenses.