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Understanding Employee Expense Regulations in Germany

By April 19, 2019September 29th, 2022No Comments
Understanding Employee Expense Regulations in Germany

When a business is expanding into Germany, there’s a high likelihood that one or more of its employees will travel to and from the country both during and after the expansion. For these companies, there are a few key things employers should know about expense regulations in Germany (view a full guide to employment considerations on our Germany IPEO page).


Per Diems, Meal Allowances, and Expense Regulations in Germany

In the vast majority of countries, the local government will have very specific expense reimbursement regulations. Germany is no different, as it has a number of rules governing per diems, or the fixed amount of money traveling employees are allotted while away on assignment.

The German government breaks these considerations into two categories:

  • For multi-day trips taking place within Germany, an employee will be entitled to €24 for every 24-hour block of time that they’re away from their home or from the workplace. They also get €12 for the day of departure and arrival, provided they are not spending the night in their own home. For single day trips, they get €12 per every day that they’re away from home for at least eight hours.
  • Trips away from Germany are a bit more complicated, as the government sets rates based on the country they’ll be going to and the cost of living in that country. There are three different rates depending on the country in question:
    • The rate for 24-hour absences from home or from work
    • The rate for the day of arrival and departure.
    • The rate related to the cost of an overnight stay.

On the topic of meal allowances, the main thing to remember has to do with situations where meals are offered at no cost to the employee. In that situation, the employee would need to deduct a certain percentage for that meal based on their meal allowance for the day. As of 2019, the deductible percentages in this category are:

  • A 20% deduction for breakfast
  • A 40% deduction for lunch and dinner

This situation may apply, for example, when they receive a free meal from the hotel at which they are staying.

Additional Expense Regulations in Germany to Consider

Again, it’s important to note that many expenses will vary depending on where, specifically, the employees are headed. Their expense levels may be higher in a country where it’s more expensive to live, and lower in one where it isn’t. Taxi rides, on the other hand, must always be submitted on an individual basis. Likewise, all expenses above that €10 limit will need to be submitted, too.

Often, German employers will reimburse their employees for a number of other expenses, including, but not limited to:

  • Rental cars at the destination
  • Phone calls with or letters to anyone while dealing with business matters
  • Both the transportation and storage of luggage, which can include luggage insurance in certain situations

Ensure You’re Compliant with All German Employment and Expense Regulations by Relying on an Experienced Partner

Navigating the complexities of German and other countries’ regulations can quickly become an overwhelming portion of your global expansion plan. That’s why it’s important to partner with an experienced expansion organization that can mitigate these and other compliance risks. Your partner can make sure all of these administrative tasks are taken care of so you focus less on employee expense regulations in Germany and more on running the most successful business in Germany that you can.

Velocity Global’s International PEO (Professional Employer Organization) solution assists expanding organizations with each step of the expansion process, including employment regulation compliance in more than 185 countries—no legal entity required.

Want to learn more about how utilizing Velocity Global’s International PEO solution can help ensure a smooth expansion? Reach out to us today, and take the first step towards growing your global presence.