Note: The Federal Ministry of Finance announced on September 27, 2021 that the lump sums for business trips abroad that have been in force since January 1, 2021 will also apply to 2023. You can find applicable flat rates for the most common destinations further down in this article.
How to calculate Germany’s per diem rates in 2023
Published on March 21, 2023
Germany is known worldwide for its cultural commitment to efficiency and attention to detail. For the most part, these ideas have served the nation well - it boasts the fourth-largest economy in the world; first in Europe.
But in some cases, efficiency and precision butt heads against one another. And business trips are one of those cases.
Employees in German companies have fixed per diem rates to cover travel expenses. These are set by the government, which in theory makes things more efficient. Companies don’t need to create their own policies - they just follow the rules.
But there’s a problem: the rules are fairly complex, and lots of businesses struggle to follow them.
Efficiency, meet precision.
In this article, we’re going to give you a clear overview of the law for business travel within Germany and abroad.
What are per diem rates?
This will probably be clear to most readers, but it’s important that we set out just what we’re talking about. While travelling for work, certain costs are incurred by the employee and should be reimbursed by the company.
Some costs are expected to be covered your per diem, and therefore don’t need to be claimed separately. You’ll simply want to keep these costs below the daily per diem rate you’ve been allocated.
Other costs aren’t covered by your per diem, which means you should include them in an expense claim.
Covered by per diem
These will fall under the fixed rates below, and should not be claimed separately.
Meals purchased while travelling for work
The law (see below) only talks about meals. Some employees will choose to include other small costs (metro tickets or stationery for example), rather than seeking reimbursement for these minor items.
Not covered by per diem
These expenses should still be reimbursed by the company as part of a separate expense claim.
Transport to and from the airport or meetings
Accommodation if staying overnight
Meals and other costs incurred while meeting clients
Keep this distinction in mind when travelling. Now, let’s look at the specific rules for per diems.
The law around German per diem rates
The applicable law in this case is the statute on income tax - more precisely section 9, paragraph 4(a) (link in German). This covers meals for travelling workers, and essentially states the following:
If the employee works outside their home and first place of work (external occupational activity), a lump sum for meals is paid in compensation for the additional expenses.
[The actual rates paid are in the next section of this post.]
Since it would be time-consuming, complicated, and potentially unfair to have individual businesses set their own rates, the government does it for them. So as long as the rates are easy to understand and make sense, this is a good thing.
It also prevents the need for itemized expense claims - something employees generally hate. You don’t need to submit every receipt and take hours filling in expense reports. If you travel for X number of days, you receive Y in reimbursement.
The rates depend on travel duration and destination (see table below).
Note: You can’t claim these rates twice.
Two fee rates for all business trips
At the end of each year, the Federal Ministry of Finance publishes the applicable meal allowances for the following year. For the first time in many years, the flat rate allowances for business travel were updated in 2020.
Although the lump sums have changed for some countries, the basic principle remains the same. Since January 1, 2014, only two meal per diems apply, both within Germany and abroad. These are based on the travel duration:
Small meal allowance: for business trips lasting more than eight hours and less than 24 hours. This rate also applies to arrival and departure days of multi-day business trips.
Large meal allowance: For business trips that last longer than 24 hours. This rate is applied to every single day.
Important note: The expense calculation is based on full calendar days. In fact, to claim a full day, the traveller actually has to be away from home (or the office) from 0:00 to 24:00.
Anyone who went on a business trip before 2014 will find that a few things have changed with the reform of travel expenses. The most important change: business trips with a duration of less than eight hours can no longer be billed.
Current per diem rates in Germany
The rates for business travel in Germany changed slightly in 2020, for the first time in years.
Even with the 2014 reform, only the categories were changed, but not the amount of the lump sums. So this 2020 update is worth noting.
Today, these are the lump sum amounts for German per diems:
For business trips with a duration of less than 24 but more than eight hours, €14 can be noted in the travel expense report.
With a minimum duration of 24 hours, €28 euros can be claimed for each full day, and €14 euros for arrival and departure days (which will obviously be less than 24 hours).
The overnight flat rate is €20 - to be used for accommodation. In reality, accommodation will usually be covered fully by the employer, so travelling employees won’t claim this cost. But in cases where accommodation is not covered - for freelancers, for instance - this cost can usually be claimed through an individual’s income taxes.
Why is the overnight lump sum so low? One theory is that this should prevent fraudulent charges if business travellers choose to stay with friends or relatives.
You can find an example calculation in our free travel expense report template.
Exceptions to these rules
No good rules or regulations would be complete without exceptions. Thankfully, in this case they’re simple and quite brief.
First, the food allowance will only be paid in full if the business traveller actually pays for their own food. If the employer pays for meals on the trip, the rate will be reduced accordingly:
If breakfast is included (in the hotel fee, for example), 20 percent of the flat rate will be deducted for the day.
If lunch or dinner is provided by the employer, 40 percent of the fee will be removed.
For shorter business trips, it should be noted that meals provided by the employer are subject to income tax. Here are the so-called non-monetary benefits which must be taken into account in at tax time:
For breakfast, the value is currently €1.77.
For a lunch or dinner, €3.30 will be charged.
Foreign packages for business travel
As already mentioned, the categories for food allowances for business trips in Germany and abroad apply equally. But the rates of reimbursement may differ significantly depending on the country.
While an overnight stay in London, for example, costs €224, in Rome the value is only €135. For a day in Tokyo, the package is €66, but in Athens it's only €46.
The list also includes prices in different regions in the same country. For example, in the table at the end of this article, you'll see that a stay in Miami is more expensive than in Los Angeles.
Unlike the lump sums for business travel within Germany, the rates for foreign destinations are frequently adjusted.
To help, we put together a list with the most frequented destinations and their respective meal allowances (below).
German per diems: clear as mud
Hopefully this article has helped to clear up some of the confusion around the German per diem system. In some ways it all seems unnecessarily complex, but once you have the basic concepts it should be fairly simple to repeat regularly.
The key parts to remember are the specific rates you can claim for each day, and that you can’t claim costs that have already been covered by your employer.
To help you manage your next business trip and keep on top of all spending (per diem or not), download our free expense claim template: Expense Report Template.
Fees for business trips abroad
Note: This list contains the most common travel destinations. An overview with all countries can be found here (German link).