German Company Car Tax Calculator 2026

How company-car tax works in Germany

A company car you are allowed to drive privately is a non-cash benefit, the geldwerter Vorteil. German tax law treats the free private use as if your employer had paid you extra salary, so a notional amount is added to your gross pay every month for both income tax (Lohnsteuer) and social security. No money actually reaches your account, which is why the benefit lowers your net pay rather than raising it. There are two ways to put a number on that private use: the percentage method (the 1 % rule and its reduced electric variants) and the logbook method (Fahrtenbuch). The percentage method is the common standard and is what this calculator models.

The rate is a percentage of the car's gross list price and it depends on the drivetrain. A combustion car, or a hybrid that does not meet the environmental limits, is taxed at 1 % of the full list price per month. A pure-electric or fuel-cell car is taxed at 0.25 %, a quarter of the list price, as long as that price is 100,000 EUR or less for a car the employer acquired from July 2025; above the cap it is 0.5 %. A qualifying plug-in hybrid is taxed at 0.5 %, half the list price. On top of the private-use figure comes a commute surcharge for the trip between home and work, and any monthly payment you make toward the car is subtracted. The result is the taxable benefit that this calculator adds to your salary before running it through the 2026 wage-tax engine.

The 1 % rule and the gross list price

The 1 % rule values your private use at one percent of the gross list price (Bruttolistenpreis) for every month the car is available to you. The gross list price is the manufacturer's recommended retail price in Germany at the time of first registration, including VAT and the price of any factory-fitted extras such as a larger battery, metallic paint, a tow bar or a navigation system. It is rounded down to a full 100 EUR. Two points catch people out. First, it is the list price when the car was new, even if you drive a used car, even if your employer negotiated a large fleet discount, and even for a leased car. Second, it is not the price anyone actually paid. A 55,000 EUR list price therefore adds 550 EUR a month to your taxable and social-security pay under the 1 % rule, plus the commute surcharge, regardless of what the car cost your employer.

Electric and plug-in hybrid: the reduced rates

Battery-electric and fuel-cell company cars get the biggest break. Instead of 1 %, only a quarter of the list price is used, so the effective monthly rate is 0.25 %. The condition is a gross list price at or below a cap that has risen over time: 100,000 EUR for cars the employer acquired after 30 June 2025 (the 2025 Investitionssofortprogramm), 70,000 EUR for 2024 up to that date, and 60,000 EUR for 2019 to 2023. Cars from before 2019 fall under an older battery-cost deduction and are outside this calculator. The cap that applies is the one in force on the acquisition date and it does not change later, so a 95,000 EUR electric car acquired in 2026 keeps the quarter rate for its whole time as a company car. The reduced electric rates cover cars the employer acquires before 2031. The quarter or half comes off the list price first, and only the result is then rounded down to a full 100 EUR: a 55,000 EUR electric car is taxed on 13,700 EUR (55,000 divided by 4 is 13,750, rounded down), a private-use benefit of 137 EUR a month. Above the cap, a pure-electric car is taxed at half the list price, an effective 0.5 %. Two dates matter: the gross list price is always the one from first registration, but the cap and the electric-range test below follow the date the employer bought or leased the car, or first made it available to you if it was already in the fleet.

A plug-in hybrid is taxed at 0.5 %, half the list price, only if it can be charged externally and meets one of two environmental tests: carbon dioxide emissions of no more than 50 g/km, or a purely electric range of at least 80 km under WLTP. The range requirement was 60 km for hybrids the employer acquired between 2022 and 2024, and 40 km before that. A plug-in hybrid that meets neither test is taxed like a combustion car, at the full 1 %. The commute surcharge uses the same reduced base as the private-use rate, so an electric car on the quarter rate also has its surcharge cut to a quarter.

The rates at a glance (2026)

Private use, the availability rule and your commute

Private use means any use that is not a business trip: evenings and weekends, holidays, the school run, a trip to the supermarket. The tax office works from an Anscheinsbeweis, a presumption that a company car provided without restriction is also used privately, so the 1 % benefit applies even in a month when you did not actually drive privately. The presumption falls away if the employer prohibits private use in writing and the ban is genuine rather than a paper formality, or if the car is plainly unsuitable for private use, such as a workshop van fitted out with racking. A purely verbal understanding is usually not enough, and the tax office can still look behind a written ban if nothing about how the car is used matches it.

The trip between your home and your first place of work (erste Tätigkeitsstätte) is treated separately. If the car is available for that trip, add 0.03 % of the applicable list price per kilometre of the one-way distance, every month, whether you commute 2 days or 20. When you drive to work on fewer than about 15 days a month, the alternative 0.002 % per kilometre per actual commuting day is cheaper (15 days at 0.002 % is the same as the 0.03 % monthly rate). That method is limited to 180 days a calendar year, with no monthly cap; for payroll your employer needs a written record of the actual dates you drove in, not just a count. Your employer fixes one method for the whole year (you can still switch to the day-count method in your own tax return). The surcharge does not replace the Entfernungspauschale: you still deduct the distance allowance as a work-related expense in your annual return, which gives part of the surcharge back. For a long commute the 1 % plus 0.03 % figure can climb above the car's actual yearly running cost; when it does, the taxable benefit is capped at that cost, the Kostendeckelung.

What a company car costs you in net pay

Because the benefit is added to your gross pay but never paid out, its whole effect on you is the extra deductions it triggers. It is taxed at your marginal rate, so the same car costs a trainee far less than a senior manager. On a 5,000 EUR monthly salary in tax class 1, a 220 EUR electric-car benefit costs around 110 EUR a month in extra wage tax, solidarity surcharge and social security; the identical car under the 1 % rule would add roughly 880 EUR to taxable pay and cost about 435 EUR a month. That gap, several thousand euros a year, is the main reason electric company cars took off in Germany.

Social security matters here too. The benefit is part of your Arbeitsentgelt, so it also raises the base for pension, unemployment, health and long-term-care contributions, up to each branch's contribution ceiling. If your cash salary is already above a ceiling, the car adds nothing to contributions in that branch and only the tax effect remains, which makes a company car proportionally cheaper for high earners. This calculator runs your salary through the wage-tax engine twice, once with the benefit and once without, so the monthly cost it shows already includes both the tax and the social-security effect for your inputs.

Employee payments, fuel and charging

A payment you make to your employer for the private use, from your net pay, reduces the taxable benefit euro for euro, down to a floor of zero: a fixed monthly Nutzungsentgelt, an agreed share of the leasing rate, or a per-kilometre charge. A payment larger than the benefit does not create a deduction. A one-off contribution to the purchase price can be offset in the year you pay it and carried forward until used up. A gross salary reduction in exchange for the car (Gehaltsumwandlung) is a different arrangement: it lowers your gross pay but the full benefit is still added, so it does not belong in the calculator's monthly-payment field. Enter only a net-pay contribution there; it is applied before the tax effect is worked out.

Fuel and electricity paid by the employer are already covered by the 1 %, 0.5 % or 0.25 % figure, so there is nothing extra to tax for a full fuel card. Charging an electric or hybrid company car at the employer's premises is tax-free and is not added to the benefit. Charging it at home is where 2026 changes things: the old fixed monthly charging allowances no longer apply. The charged kilowatt-hours now have to be documented, for example from a separate meter or a wallbox that records consumption; the employer can then reimburse either the actual electricity cost or a permitted flat rate per kWh (the BMF example for 2026 uses about 0.34 EUR, based on the Destatis household electricity price).

The logbook alternative (Fahrtenbuch)

Instead of the percentage method you can tax the actual private share of the car's real running costs. You divide private kilometres by total kilometres and apply that percentage to the year's full costs: depreciation or the leasing rate, electricity or fuel, insurance, road tax, maintenance and repairs. For an electric or qualifying hybrid car, the depreciation or leasing part of that cost is reduced to a quarter or a half, mirroring the percentage method. Trips between home and work are valued separately from other private trips, at their own share of the running costs. The logbook wins when you drive little privately or the car has a high list price, but the record has to be complete and kept as you go: every trip with date, start and end odometer reading, destination, purpose and, for business trips, the contact visited. A paper book must be bound and not overwritten; an electronic one must log every later change with its date and reason. Undocumented gaps or edits make the whole logbook invalid and the tax office falls back to the 1 % rule. You can only switch method at the turn of the year or when the car changes.

Pool cars, several cars and part months

If a car is shared by several employees as a pool car, the 1 % private-use value and the commute surcharge are split between the users for each month. If you have more than one company car available for private use, the private-use benefit is charged for each of them, though the commute surcharge is counted once, for the car you actually use most for the trip to work. The monthly value is a full month and is not split by days: a car handed over on the 20th still carries that month's full benefit, and each employer in a month you change jobs applies its own full monthly value. A car you may use only for the commute, not for other private trips, carries the 0.03 % surcharge but no 1 % private-use benefit.

Key changes for 2025 and 2026

Three changes matter for a 2026 calculation. For electric cars the employer acquired after 30 June 2025 the gross list price cap for the 0.25 % rate rose from 70,000 EUR to 100,000 EUR (the Investitionssofortprogramm), and it continues in 2026. For plug-in hybrids acquired from 2025 the minimum electric range for the 0.5 % rate is 80 km, up from 60 km. From 1 January 2026 the flat monthly amounts an employer could reimburse tax-free for home charging of a company car have been withdrawn, so home-charging reimbursement now has to be based on documented consumption. The 1 % rate for combustion cars and the 0.03 % and 0.002 % commute methods are unchanged.

Company car questions

Sources

• § 6 EStG
• § 8 EStG
• § 52 EStG
• BMF-Lohnsteuer-Handbuch, Anhang 24 IV

Based on Section 6 (1) no. 4, Section 8 (2) and Section 52 EStG and the 2025 Investitionssofortprogramm (BGBl. 2025 I no. 161). The net-pay effect uses this site's own withholding engine, checked against the official BMF Programmablaufplan test tables (our own comparison, not an official endorsement). Reviewed September 2026. An estimate, not tax advice.

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