A recent analysis of German income tax statistics reveals a notable disparity in the benefits derived from various tax allowances among different income brackets. According to data from the Federal Statistical Office, published by the Frankfurter Allgemeine Sonntagszeitung (FAS), the home office allowance primarily advantages higher-income earners. Individuals with gross salaries ranging from €80,000 to €125,000 are averaging approximately €450 in tax savings through this allowance.
Conversely, the commuter allowance-known as the “Pendlerpauschale”-primarily benefits the middle class. Those earning between €30,000 and €50,000 are claiming an average of over €1,450 through this allowance. Higher-income earners, the data indicates, are more likely to claim a secondary residence, frequently utilized for proximity to their workplace when commuting long distances.
The statistics, drawing from income tax data for 2021, do not detail the precise tax savings achieved by each individual allowance. The eventual figures depend on a taxpayer’s overall financial situation.
Lower-income employees are most frequently utilizing the “employee lump sum allowance” a pre-determined amount that can be deducted from income, especially beneficial for those not itemizing individual expenses. Approximately 80% of employees earning below €20,000 utilize this allowance.
Calls for simplification of the tax declaration process are gaining traction. Danyal Bayaz, the Baden-Württemberg’s Finance Minister (Green Party), is advocating for an increase in the employee lump sum allowance from the current €1,230 to €1,500. This adjustment, Bayaz argues, could allow over 60% of employees to forgo the need to collect receipts, simultaneously providing tax relief and reducing administrative burden on tax offices.
Florian Köbler, head of the Tax Guild, a union representing tax officials, proposes a more extensive reform. Echoing a suggestion from an expert commission, Köbler suggests introducing a daily work allowance consolidating the commuter allowance, home office allowance and other deductions-though at a substantial level. Köbler proposed a daily rate of eight to ten euros, suggesting that broader participation would enhance public acceptance.