Navigating Germany's Business Travel Expense Regulations: A Guide for International Employers

For companies expanding into Germany, understanding the Federal Travel Expenses Act (BRKG) is essential for compliant workforce management. This legislation establishes clear guidelines for employee expense reimbursement and travel allowances, balancing employer responsibilities with employee rights.

Expense Reimbursement Framework

German law requires employers to reimburse necessary business travel expenses within six months of trip completion. Employees must submit supporting documentation within three months of request to avoid claim rejection. A key consideration involves deducting any third-party benefits received during travel from employer-provided allowances.

Transportation Cost Guidelines

Employees generally enjoy flexibility in choosing transportation methods, though reimbursement covers only business-necessary expenses. Standard practice requires utilizing available fare discounts:

Public Transport: Reimbursement covers lowest class fares, with first-class train travel permitted for journeys exceeding two hours
Air Travel: Economy class fares are standard unless business justification supports higher classes
Vehicle Rental: Permitted only when public transport is impractical, with preference for eco-friendly options
Taxi Services: Restricted to justified circumstances like health issues or nighttime travel (10pm-6am)

Allowance Structures and Rates

Germany's allowance system addresses various travel scenarios through standardized rates:

Allowance Type	Rate	Conditions
Full Day Allowance	€28	24-hour business trips
Partial Day Allowance	€14	Arrival/departure days or day trips exceeding 8 hours
Overnight Allowance	€20-70	Necessary accommodation expenses
Distance Allowance	€0.20-0.30/km	Private vehicle use with €130-150 daily caps

Practical Implementation Considerations

Reduced allowances apply for extended stays (50% reduction after 14 days) and employer-provided meals (20-40% deductions). Companies like SailGlobal assist international employers in navigating these complexities through automated compliance systems.

Tax Compliance and Documentation

Allowances within official limits remain tax-free, but excess payments constitute taxable income. Employers must maintain detailed records and regularly update policies according to Federal Ministry of Finance guidelines. Best practices include:

Conducting quarterly policy reviews
Implementing digital receipt management systems
Providing employee training on documentation requirements
Establishing clear approval workflows

Proper implementation not only ensures compliance but also enhances employee satisfaction during business travel. International HR managers should consult local experts when establishing German operations to avoid common pitfalls in expense management.

Germany Business Travel Expenses: Complete Guide to BRKG Compliance for Employers