Tax-deducting a home office: Home office flat rate vs. actual costs

Legal Regulations: Home Office and Daily Flat Rate

The Income Tax Act distinguishes between the deduction for a home office and the daily flat rate.

Home Office

If your home office forms the center of your entire professional and business activity, the corresponding expenses can be tax-deductible. Alternatively, you can choose the annual flat rate of €1,260.

Daily Flat Rate

For specific days when you perform your professional or business activity from home, you can claim a daily flat rate of €6. The annual maximum amount is €1,260.

The daily flat rate can also be claimed in certain cases where no other workplace is permanently available for the respective activity.

Home Office Flat Rate vs. Home Office Deduction

The daily flat rate and the deduction for a home office cannot be used simultaneously for the same period.

Requirements for a Home Office

A home office is a room integrated into your domestic living space that, by its function and equipment, serves your professional or business activity and exclusively or almost exclusively used for professional or business purposes. Minor private use of less than 10% is permissible.

The specific circumstances of each individual case are decisive. A mere workspace corner within a living area does not automatically meet the requirements for a home office.

The center of professional activity

The center of activity is not determined solely by where the most working time is spent. Rather, the deciding factor is where the essential and defining tasks are performed.

A home office can therefore be the center of activity even if work is also performed outside the home. Conversely, extensive work in a home office does not automatically mean that it constitutes the center of activity.

Home office despite having a workplace at the company

Having a workplace at the company does not automatically exclude the tax deductibility of a home office. For the deduction of actual home office expenses or the annual flat-rate allowance, the key factor is whether the home office constitutes the center of the entire business and professional activity.

The daily flat-rate allowance is subject to its own requirements. It may be considered, in particular, if the work is performed primarily at home or if no other permanent workplace is available for the activity in question.

Can teachers deduct a home office?

For teachers, the center of professional activity is generally the school, as teaching represents the defining aspect of their profession. Therefore, teachers generally cannot claim the actual costs of a home office or the annual flat-rate allowance solely for lesson preparation at home.

However, if no other permanent workplace is available at the school for lesson preparation, the daily flat-rate of €6 may be considered for the corresponding days. According to the German Federal Ministry of Finance (BMF) guidelines, this also applies to days on which the teacher worked at the school before or after working from home.

Which costs can be taken into account for a home office?

If the requirements for a home office deduction are met and actual expenses are claimed instead of the annual flat-rate allowance, the corresponding costs can generally be taken into account on a pro-rata basis.

For a rented apartment, for example, a proportional share of rent and utility costs may be relevant. For owner-occupied property, certain financing and property-related costs, among others, can be taken into account.

For general housing costs, the allocation is generally based on the ratio of the home office area to the total living area. For individual expenses, a different allocation may be required.

Work equipment

Work equipment such as computers, monitors, desks, or office chairs is not covered by the daily flat rate and can generally be claimed separately for tax purposes.

Example: Actual costs of a home office

Assume a person uses a 15 m² home office in a 100 m² apartment. The proportional housing costs amount to €2,430 per year.

If the requirements for deducting a home office are met, the actual proportional expenses can generally be compared with the annual flat rate of €1,260.

In this simplified example:

• Actual proportional expenses: €2,430
• Annual flat rate: €1,260

Whether claiming actual costs is more tax-efficient depends on the specific circumstances and which expenses are actually eligible for deduction.

Important for GmbH managing directors: For a managing director of a GmbH, a distinction must also be made between personal income-related expense deductions, reimbursement of costs by the GmbH, or renting the home office to the GmbH. These options have different tax requirements.

Practical tips

1. Document the area: Keep a clear record of the home office area and the total living area.
2. Collect costs: Retain receipts for rent, utilities, and other relevant expenses.
3. Consider work equipment separately: Costs for work equipment are not automatically covered by the daily flat rate.
4. Check activities: The deciding factor is which activities are performed in the home office and whether it serves as the qualitative center of your overall professional activity.
5. Important distinction for GmbH managing directors: Leasing or renting a home office to a GmbH must be assessed separately for tax purposes. The Federal Ministry of Finance (BMF) focuses primarily on the employer's overriding interest in this regard.

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