Circula Mobility is an employee benefit in the form of a mobility budget. Companies can allocate a monthly budget to their employees that they can use for their mobility needs. Employees can use any type of transportation they need, both for private use and for travelling to the first place of work (erste Tätigkeitsstätte). However, different tax rules apply depending on their choice of transportation.

Pursuant to Section 3 No. 15 of the German Income Tax Act (EStG), an allowance granted by a company to its employees as a salary increase for local public transport (ÖPNV) between home and the first place of work and for private journeys is tax-free.

This includes:

Note on annual tickets:

For a public transport annual ticket, the total amount is paid in equal monthly instalments until the end of the term.

💡 Note: The BVG-Annual Pass is not a classic ticket, but a chip card on which only the card number is stored, but no name or time periods. Every holder of an annual pass can request a sales tax invoice from the BVG customer center. This will be sent by mail. This invoice contains all essential information about the holder of the Annual Pass.

Trips in individual and long-distance transport are taxed at the usual rates.

This includes:

Note: If the mobility budget is used outside Germany, all mobility offers will be automatically taxed.

The tax-exempt benefits pursuant to Section 3 No. 15 EStG reduce the distance allowance. The Entfernungspauschale can be reduced to zero. This reduction is based on the corresponding tax-free allowance granted by the employer to the employee for the use of tax-free means of transport. The reduction can be reduced or prevented by the payment of lump-sum tax on the benefits that are actually tax-free (pursuant to Section 40 (2) Sentence 2 Nos. 1 and 2 EStG) in the amount of 15% or 25%. For more information and examples please visit paragraph 6 of the BMF letter.