Travel Expense Reimbursement – Definition, Allowances 2025 & Practical Tips

Travel expense reimbursement governs which costs employees can claim for tax purposes or have reimbursed by their employer during business trips — including travel, accommodation and meal costs. The legal basis is the German Income Tax Act (Einkommensteuergesetz, EStG), which sets out clear flat-rate allowances and documentation requirements. For HR professionals, a written travel expense policy is essential for standardising processes and avoiding errors in reimbursement.

What Is Travel Expense Reimbursement?

Travel expense reimbursement is the process by which employees document and recover the costs of a professionally motivated trip — known in German law as a Dienstreise (business trip) or Auswärtstätigkeit (external work activity) — either through employer reimbursement or by claiming them against tax.

An important distinction: commutes between home and the primary place of work (i.e. the regular office) are not business trips. They are treated differently for tax purposes and do not fall under travel expense rules.

An external work activity (Auswärtstätigkeit) occurs when employees work temporarily outside their normal place of work — for example, visiting a client, attending a trade fair, or participating in a training course at another location. Only in these cases do the travel expense regulations under §9 EStG apply.

Legal Basis

The Income Tax Act (EStG) as the Foundation

German travel expense law is regulated by the Income Tax Act (EStG). The key provisions are §9 Para. 4a EStG (meal expense allowances) and §9 Para. 1 Sentence 3 No. 4a EStG (travel costs for external work activities). These are supplemented by the Wage Tax Guidelines (Lohnsteuerrichtlinien, LStR) and the Federal Ministry of Finance (BMF) circular on the tax treatment of travel costs.

Tax-Free Reimbursement and Wage Tax Liability

When an employer reimburses travel expenses up to the statutory flat-rate amounts, this payment is tax-free for the employee. If reimbursement exceeds the flat rates, the excess amount becomes subject to wage tax — it is treated as a taxable benefit in kind and must be taxed like regular salary.

Employers may also reimburse less than the statutory flat rate, or choose not to reimburse at all. In that case, employees can claim the unreimbursed amounts as income-related expenses (Werbungskosten) in their personal income tax return.

What Can Be Claimed?

Travel expense law distinguishes four categories of costs:

Travel Costs

For trips made using a private car, a flat-rate mileage allowance applies: €0.30 per kilometre (€0.38 per kilometre from the 21st kilometre onwards). Keeping a mileage log or separate record of journeys is recommended, but no receipt is required — the flat rate applies automatically.

When using public transport, actual costs are reimbursed and must be evidenced by tickets or receipts.

Meal Allowances 2025 (Domestic Travel)

The following flat-rate meal allowances apply for domestic travel within Germany (as of 2025, pursuant to §9 Para. 4a EStG):

These amounts are reimbursable tax-free. No receipts for meals are required — the flat rate applies regardless of whether or how much was spent on food. If meals are provided free of charge (e.g. by the employer), the allowance is reduced accordingly.

Accommodation Costs

Accommodation costs are reimbursed at actual cost, provided they are reasonable. A receipt (hotel invoice) is mandatory. For domestic overnight stays, there has been no tax-free flat-rate allowance since 2014 — only actual, documented costs are deductible.

Incidental Travel Costs

Reimbursable incidental travel costs include parking fees, toll charges, left-luggage fees, taxi rides at the destination, and gratuities within customary limits. Receipts are required for all incidental travel costs.

International Business Travel: Special Rules and Country-Specific Allowances

For business trips abroad, domestic flat rates do not apply. Instead, country-specific allowances are published annually by the Federal Ministry of Finance (BMF) in a dedicated table. The destination country is the determining factor.

For multi-day international trips, the flat rate of the destination country applies to both the departure and return days. If multiple countries are visited in a single day, the flat rate of the country in which the overnight stay takes place is applicable.

Employers and HR professionals should review the BMF table at the start of each year, as country-specific allowances are updated regularly. The current table is available on the Federal Ministry of Finance website.

Travel Expense Policy: Why It Makes Sense

A travel expense policy is not legally required — yet it is recommended for every organisation that sends employees on business trips. It provides clarity for all parties, prevents disputes and ensures consistent processes.

A sound travel expense policy should cover at minimum:

• Which costs are reimbursed and up to what amount (vehicle class, hotel category, rail/flight booking class)
• How business trips are approved
• Submission deadlines for expense claims
• How receipts are submitted (digitally or on paper)
• Who within the organisation reviews and approves claims

For small and medium-sized enterprises without a dedicated accounting department in particular, a written policy is a valuable tool: it significantly reduces coordination effort and prevents each claim from becoming a case-by-case decision.

Step by Step: Submitting a Travel Expense Claim Correctly

To ensure the process runs smoothly and is tax-compliant, the following approach is recommended:

Before the trip:

• Obtain approval for the business trip (if a policy is in place)
• Document bookings (rail, flight, hotel)

During the trip:

• Collect all receipts (accommodation, incidental costs, public transport tickets)
• Record absence times (departure and arrival — critical for the meal allowance)
• Log kilometres driven (if using a private vehicle)

After the trip:

• Complete the expense claim form (internally or via software)
• Attach receipts
• Meet the submission deadline (as per the travel expense policy or tax requirements)
• Submit the claim for review and approval

Many organisations today use digital tools for travel expense management, which significantly speed up the process, reduce the error rate, and handle receipt management in a GDPR-compliant manner.

Common Mistakes in Travel Expense Reimbursement

The following errors occur most frequently in practice:

Absence times not documented: The meal allowance depends on the exact duration of absence. Failing to record departure and arrival times risks an incorrect claim or queries from the tax authorities.

Outdated flat rates used: Meal allowances and country-specific allowances are adjusted annually. Using outdated figures leads to avoidable errors.

Missing or incomplete receipts: Accommodation costs and incidental travel costs cannot be reimbursed without a receipt. Receipts should be submitted promptly after the trip.

Primary place of work incorrectly defined: If the primary place of work is not clearly specified in the employment contract, classification issues can arise that are disadvantageous from a tax perspective.

Private portion not separated: Employees who combine a business trip with private stays must exclude the private portion — only the professional component is reimbursable.

Frequently Asked Questions About Travel Expense Reimbursement

What counts as travel expenses?

Reimbursable travel expenses cover four categories: travel costs (mileage allowance for private cars, or actual costs for public transport), meal allowances (flat rates based on duration of absence), accommodation costs (at actual cost with receipt), and incidental travel costs such as parking fees, tolls or left-luggage charges (with receipt).

How high is the meal allowance in 2025 (domestic travel)?

For domestic travel within Germany: €14 from 8 hours of absence, €28 from 24 hours. Departure and return days on multi-day trips are each set at €14. No receipts for meals are required.

When does a journey qualify as a business trip?

A journey qualifies as a business trip (Auswärtstätigkeit) when it is professionally motivated and does not lead to the primary place of work (the regular office). Commutes to the normal workplace are not business trips — they are subject to their own tax rules (commuting allowance).

Do I need a receipt for every expense item?

Not for all items. Mileage costs for private cars and meal allowances do not require receipts — flat rates apply. For accommodation costs and incidental travel costs, however, a receipt is mandatory.

What happens if reimbursement exceeds the flat rate?

The amount exceeding the tax-free flat rate becomes subject to wage tax. It must be taxed like regular salary and reflected accordingly in the payroll.

What rules apply to international business travel?

For international trips, country-specific allowances published annually by the Federal Ministry of Finance apply. The destination country is the determining factor. Departure and return days are calculated using the flat rate of the respective destination country.

Is a company required to have a travel expense policy?

There is no legal obligation. Nevertheless, a written policy is strongly recommended: it creates transparency for all parties, governs reimbursement amounts, approval procedures and submission deadlines, and prevents unnecessary conflicts.

Conclusion

Travel expense reimbursement is a central HR and finance topic governed by clear legal rules — but one that frequently leads to errors in practice. Knowing the current flat rates, collecting receipts consistently and establishing a clear internal policy saves time, avoids tax back-payments and creates reliability for everyone involved.

Digital travel expense tools help automate processes, capture receipts on the go and ensure compliance — particularly for growing organisations with frequent business travel, this represents a worthwhile investment.

Would you like to optimise your HR processes further? Find out how the Aivy platform enables scientifically grounded talent selection and supports HR professionals in making objective hiring decisions: Discover Aivy.

Sources

• Income Tax Act (EStG), §9 Para. 4a – Meal Expense Allowances. Federal Ministry of Justice, 2024. https://www.gesetze-im-internet.de/estg/__9.html
• Income Tax Act (EStG), §9 Para. 1 Sentence 3 No. 4a – Travel Costs for External Work Activities. Federal Ministry of Justice, 2024. https://www.gesetze-im-internet.de/estg/__9.html
• BMF Circular: Tax Treatment of Travel Costs and Travel Expense Reimbursements for Employees. Federal Ministry of Finance, 2021. https://www.bundesfinanzministerium.de/
• Flat-Rate Allowances for Meal Expenses and Accommodation Costs Abroad (Country-Specific Allowances). Federal Ministry of Finance, 2025. https://www.bundesfinanzministerium.de/
• Personio GmbH: Travel Expense Reimbursement – HR Glossary, 2024. https://www.personio.de/hr-lexikon/reisekostenabrechnung/
• Haufe Verlag: Travel Expense Law – Practical Guide, 2024. https://www.haufe.de/