The public transport subsidy is an attractive and widely offered employee benefit where your employer covers all or part of the cost of your public transportation tickets. The aim is to ease your daily commute financially while encouraging the use of environmentally friendly transportation. This can be implemented through discounted job tickets, direct financial assistance for your ticket costs, or reimbursement of already purchased tickets (such as monthly or annual passes). Beyond the personal financial advantage for you, this benefit also contributes to broader goals like reducing individual car traffic, easing the burden on roads and parking spaces, and protecting the climate. For employers, it's an effective tool to enhance their attractiveness and improve employee retention.
A key advantage of the public transportation subsidy lies in its tax benefits. According to Section 3 No. 15 of the German Income Tax Act (EStG), employer subsidies for commuting via public transportation between home and primary workplace, as well as for general public transit use, are completely exempt from both income tax and social security contributions. What this means for you: You receive the subsidy as a gross-for-net payment, meaning it doesn't increase your taxable income and isn't subject to any social security deductions. Employers also benefit by saving on associated payroll costs. However, certain important conditions must be met for this tax exemption to apply.
- The subsidy/grant mustin addition to the regular wages already owedmust be granted. Therefore, it cannot be part of a salary conversion/sacrifice arrangement.
- It is valid for travel on public transportation services (both local and long-distance), but does not apply to taxis or private transportation services.
- Up to 100% of the actual ticket costs can be reimbursed; the amount is not subject to a fixed limit but rather depends on the employee's actual expenses.
Important information for your personal tax return: The tax-free allowance you receive reduces your deductible work-related expenses by the amount of the commuting allowance for the kilometers traveled using your public transport ticket. In other words, you cannot claim both the full tax-free subsidy and the full commuting allowance for the same route.
The implementation of public transport subsidies can be handled in various ways. Many companies establish framework agreements with local transport providers to offer their employees discounted job tickets. Alternatively, employers can reimburse the costs of independently purchased tickets upon presentation of proof or pay a fixed monthly allowance. Modern benefit platforms like HelloBonnie can significantly simplify the administration process. They enable employers to efficiently manage subsidies and ensure compliance with tax regulations. For you as an employee, this often means straightforward and transparent handling, for example through digital submission of receipts or the use of a benefit card like the HelloBonnie Smartcard (depending on integration with transport providers). Such a subsidy is therefore a valuable benefit that helps save you money, supports the environment, and demonstrates that your employer is committed to your well-being and sustainable mobility.