By offering your employees a public transport subsidy, you not only reduce their commuting expenses, but also elevate your entire mobility strategy. Fully covering monthly or annual transit passes significantly lowers employee turnover, as workers are more likely to stay with companies that support their daily well-being.
At the same time, as an employer, you save substantial costs by avoiding payroll taxes and social contributions that would otherwise apply to salary increases. Promoting sustainable mobility also strengthens your employer branding – applicants and employees alike recognize that your company takes responsibility for the environment and quality of life.
Another advantage: reduced absenteeism and improved punctuality. Employees who can commute affordably and without stress are more likely to start their day well-rested and motivated.
Benefits for Your Employees
Your employees benefit directly from greater reliability in their daily commute. The public transport ticket provides a worry-free ride to work without concerns about buying tickets or rising fares.
A key perk: the subsidy can be used regardless of company size and covers tickets that are valid for private use as well – giving employees flexibility in their daily mobility and enhancing their leisure time.
With full cost coverage, financial strain is reduced – a real relief in times of rising living expenses. The public transport subsidy also boosts environmental awareness: when employees see their company supporting climate-friendly options, their identification with your sustainability goals increases.
Legal Framework
According to § 3 No. 15 of the German Income Tax Act (EStG), employer subsidies for public transportation are fully exempt from income tax and social security contributions, as long as they are granted in addition to the regular salary.
This regulation covers monthly, annual, and flexible subscription models such as the Deutschlandticket, allowing your company to cover up to 100% of commuting costs.
For full tax exemption, the subsidy must be properly documented in the payroll system and recorded in the employee’s wage account.
What Can Be Funded with the Public Transport Subsidy?
The subsidy covers all types of local public transport tickets – from buses and trains to subways and trams. It can also include combination or flexible models like the Deutschlandticket, which are valid for private use as well.
This allows you to create a mobility offer that goes far beyond the daily commute, enabling flexible and sustainable travel in all areas of life.
