Employee Lump-Sum Allowance for 2026: €1,230 without documentation
€1,230 in income-related expenses, without a single receipt. That’s the employee lump-sum allowance. It only gets interesting when the actual expenses exceed that amount.
The employee lump-sum allowance is €1,230. It is deducted as income-related expenses from income from employment if no higher expenses are documented, and is already included in the payroll tax withholding. Individual income-related expenses are deductible only if their total exceeds €1,230. Starting in 2026, union dues will be added to this amount.
- The employee lump-sum allowance amounts to €1,230 and applies to income from employment (Section 9a, sentence 1, no. 1, letter a of the Income Tax Act (EStG)).
- It is already taken into account in the withholding of income tax (Section 39b(2), sentence 5, no. 1 of the Income Tax Act (EStG)).
- Individual income-related expenses are only deductible to the extent that their total exceeds €1,230.
- Special expenses and extraordinary expenses are not included in the lump-sum allowance and are subject to their own rules.
- Starting in 2026, union dues will be taken into account in addition to the flat-rate deduction (Section 9a, Sentence 3 of the Income Tax Act).
What is the employee lump-sum allowance?
The employee lump-sum allowance is a fixed amount of €1,230 that the tax office deducts as income-related expenses from income from employment if no higher income-related expenses are documented. It is specified in Section 9a, Sentence 1, No. 1, Letter a of the Income Tax Act (EStG) and remains unchanged for 2025 and 2026. Since 2023, it has been €1,230.
You don't need to file anything for this. It is already factored into your current payroll tax withholding: Your employer deducts it from your projected annual wages in tax classes I through V (Section 39b(2), sentence 5, no. 1 of the Income Tax Act (EStG)).
Income-related expenses – Expenses incurred to generate, secure, and maintain income (Section 9(1), first sentence, of the Income Tax Act (EStG)). For employees, these include, for example, commuting to work, work equipment, or continuing education.
How the lump-sum amount is calculated
The flat-rate deduction applies to total income from employment, not to income from each employer. It may be deducted only up to the amount of such income (Section 9a, sentence 2, of the Income Tax Act (EStG)).
When do individual income-related expenses become deductible?
Individual income-related expenses are only deductible if their total exceeds €1,230. What matters is the total of all items, not the individual receipt. Up to this limit, everything is covered by the flat-rate allowance. Only the excess amount is taken into account beyond this limit: With €1,794 in income-related expenses, that’s €564 more than the flat-rate allowance, not €1,794.
If the total is less than that amount, the flat rate applies. It is a minimum amount, not a cap: Proven higher income-related expenses take its place.
For income replacement benefits such as short-time work benefits, parental benefits, or unemployment benefits that are subject to the progression clause, the flat-rate deduction is subtracted, unless it is already deductible from wages. Income-related expenses are only taken into account to the extent that, together with other income-related expenses, they exceed the flat-rate deduction.
Employee Lump-Sum Allowance of €1,230: How Much Do Income-Related Expenses Total?
- €0 to €1,230As a lump sum
The total amount of income-related expenses is up to €1,230 (inclusive). The flat rate applies; individual items do not affect this amount.
- over 1,230 €Excess Has an Effect
Only the portion exceeding €1,230 affects taxable income. Starting in 2026, union dues will be added in any case.
What are the typical costs involved?
Typical expenses for employees include commuting to work, days worked from home, work equipment, and continuing education. For a distance of 15 kilometers, the commuter allowance alone in 2026 will be on the same order of magnitude as the lump-sum allowance (€1,254 for 220 days; see the article on the commuter allowance).
Sample Calculation: Four Items and the Flat-Rate Amount
- Distance: 15 kilometers; 220 workdays including travel time; no personal car; 2026 rate (€0.38 per kilometer)
- 40 days of working from home at €6 per day, €300 for work equipment (such as a monitor)
- Assumed marginal tax rate of 30%, excluding the solidarity surcharge and church tax; as of October 2026
| commuter allowance | 15 × 220 × €0.38 = €1,254 |
| Home Office Allowance | 40 × €6 = €240 |
| Work equipment | €300 |
| Total income-related expenses | €1,254 + €240 + €300 = €1,794 |
| Less the employee lump-sum allowance | €1,794 − €1,230 = €564 |
| Additional deduction in excess of the flat-rate allowance | €564 |
At a marginal tax rate (the rate applied to the last euro earned) of 30%, a €564 reduction lowers the tax by €169.20. This is a sample calculation based on an assumed rate; it does not constitute a guarantee.
What are the different positions, at a glance?
Commute to Work
0.38 € per kmCommuter allowance for 2026: up to €4,500 per year (excluding personal or company-provided vehicles).
Working from home
6 € per dayUp to €1,260 per year, without a private room.
Work equipment
actual costsFor example, a laptop or tools.
Professional development
actual costsWork-related courses and training programs.
This list is not exhaustive. What counts depends on whether the expense is work-related (Section 9(1), first sentence, of the Income Tax Act (EStG)). Details on each item can be found in the article on income-related expenses for employees.
What is not covered by the lump-sum amount?
The employee lump-sum allowance applies only to income-related expenses. Everything else is handled separately: Special expenses (such as donations or child care costs) have their own flat-rate deduction of €36, or €72 for spouses who file a joint return (Section 10c of the Income Tax Act). Extraordinary expenses are assessed according to their own rules.
One change concerns union dues. Effective January 1, 2026, union dues will be taken into account in addition to the flat-rate amounts (Section 9a, Sentence 3 of the Income Tax Act [EStG], added by the 2025 Tax Amendment Act). Until 2025, they were classified as income-related expenses and were included in the €1,230 limit.
Retirees and Pension Benefits
Pensioners are subject to a different flat-rate deduction: €102 for income from pensions (Section 9a, Sentence 1, No. 3 of the Income Tax Act [EStG]), applied to the total amount, not per pension. Those who receive both a statutory pension and a private life annuity are entitled to the €102 deduction only once. A flat-rate deduction of €102 also applies to pension benefits, such as civil servant pensions (No. 1, letter b). In such cases, it may be deducted only up to the amount of the pension benefits, minus the pension allowance and any supplements.
Quick question, quick answer.
Is the employee lump-sum allowance taken into account even without filing a tax return?
Yes. The employer takes this into account when withholding income tax for tax classes I through V by deducting the flat-rate amount from the projected annual wage (Section 39b(2), sentence 5, no. 1 of the Income Tax Act (EStG)).
Does the flat rate also apply to retirees?
No. A flat-rate deduction of €102 applies to income from pensions (Section 9a, Sentence 1, No. 3 of the Income Tax Act [EStG]), and the same €102 applies to pension benefits (No. 1, letter b). The €1,230 applies to income from employment.
Does the flat rate apply to each job, or just once?
Only once. The law provides for a flat-rate deduction for income from employment, not one for each employment relationship (Section 9a, Sentence 1, No. 1, Letter a of the Income Tax Act (EStG)). You can see this on your pay stub: In your second job, where you’re in tax class VI, your employer doesn’t deduct the employee lump-sum allowance—because it’s already been accounted for in your first employment—nor does it deduct the special expenses lump-sum allowance. That’s why the payroll tax is so high there. The lump-sum deduction may only be applied up to the amount of your earnings (sentence 2).
What are the rules for income-related expenses under €1,230?
In that case, the flat-rate deduction applies because it is higher. Individual income-related expenses are only taken into account if the total exceeds €1,230. A tax return may still be required for other reasons or filed voluntarily; for more information, see the article on the obligation to file a tax return.
Are union dues included in the €1,230?
Not starting in 2026. Since January 1, 2026, union dues have been taken into account in addition to the flat-rate allowance (Section 9a, Sentence 3 of the Income Tax Act). For 2025 and earlier, they were included in the total as income-related expenses.
Sources & Legal Basis
- Income Tax Act, Section 9a: Flat-Rate Deductions for Income-Related Expenses – § 9a Satz 1 Nr. 1 bis 3, Satz 2, Satz 3 EStG (Version effective January 1, 2026 (Tax Amendment Act of 2025))
- Income Tax Act, Section 9: Income-Related Expenses – § 9 Abs. 1 Satz 1, Satz 3 Nr. 3 EStG (Effective January 1, 2026)
- Income Tax Act, Section 39b: Withholding of Payroll Tax – § 39b Abs. 2 Satz 5 Nr. 1 EStG (Effective January 1, 2026)
- Income Tax Act, Section 10c: Flat-Rate Deduction for Special Expenses – § 10c EStG (October 2026)
- Recommendation by the Finance Committee on the Tax Amendment Act of 2025 (Union Dues) – BT-Drucksache 21/3104, Änderungsantrag Nr. 3 (03.12.2025)
- North Rhine-Westphalia State Tax Administration: Tax Relief for Many People (Flat-Rate Deduction Effective in 2023) – Mitteilung der Finanzverwaltung (27.12.2022)
Change History
- October 8, 2026Post created (draft).
- October 9, 2026Technical review incorporated.
This article is intended to provide general information and does not constitute tax advice for specific cases. For binding information, please contact your local tax office.
Reviewed by expertsSven Schilling
Tax expert- Bachelor of Business Administration (University of Applied Sciences)
- Over 30 years of experience in accounting and tax firms
- Board Member of an Income Tax Assistance Association
Reviewed on October 9, 2026. If there are any changes to the law, this post will be reviewed again.
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