Overview

• Nearly 14 million German employees, primarily middle-income earners, benefit from the commuter tax allowance, which offsets travel costs to work.
• The allowance was raised to 38 cents per kilometer from the 21st kilometer in 2022, and coalition discussions now include a potential further increase.
• Critics, including economists and the OECD, argue the policy is environmentally harmful and financially burdensome for the government.
• Data shows 84% of commuters use cars for at least part of their journey, with rural residents particularly reliant on private vehicles due to limited public transport options.
• The policy remains central to debates over balancing economic support for workers with Germany's climate commitments and fiscal sustainability.