Air carriers that grant free or discounted flights to employees provide a monetary benefit that is subject to wage tax.

The tax basis for these staff flights is the usual final price reduced by the regular discount granted at the place of issue (Section 8(2) of the Income Tax Act) and applies when:

  • the reservation status is limited and the air carrier does not offer the flight with said limitations to non-staff passengers;
  • income tax is charged on a flat rate by the employer according to Section 40 of the Income Tax Act;
  • a free or discounted flight is granted to employees of another employer; and
  • a staff flight is granted by an employer that is not an air carrier, but that has received the flight from an air carrier.

On September 11 2015 the supreme tax authorities of the federal states issued new averages for air mileage for 2016 to 2018.

Mileage€ average per flight kilometre (FKM)
1 kilometres (km) – 4,000km€0.04
4,001km – 12,000km€0.04 – (€0.01 x (FKM – €4,000) / €8,000)
more than 12,000km€0.03

The issued averages apply if no restrictions exist in the reservation status. In case of restrictions in the reservation status indicated on the ticket by the term 'space available (SA)', the value per FKM is 60% of the average value or 80% of the average value without the SA indication. The determined value of the flight will be increased by 15% to determine the taxable benefit for the employee.

For example, if an employee receives a free return flight from Frankfurt to Palma de Mallorca, the flight distance of which is 2,507km, and the ticket is labelled SA, the free flight is valued at €69.20 for tax purposes. This value is calculated as follows: 60% of (€0.04/km x 2,507 km) = €60.17; €60.17 +15% = €69.20.

Money paid by the employee can be deducted from the calculated taxable benefit.

For further information on this topic please contact Johannes Stehr at Arnecke Sibeth Rechtsanwaelte by telephone (+49 69 97 98 85 0) or email ([email protected]). The Arnecke Sibeth website can be accessed at