How does § 35a relief work?
For qualifying tradespeople’s services carried out for a household, § 35a(3) of the German Income Tax Act may reduce annual income tax by 20% of eligible labour-related costs, up to €1,200 per household per year. This is not a guaranteed refund. It belongs to the annual income-tax return and is not added to any monthly payslip.
Which invoice items may qualify?
- Labour costs: may qualify if the statutory conditions are met and the eligible share is documented.
- Machinery and travel costs: may count as labour-related costs where they are properly attributable under the official BMF guidance.
- Materials and supplied goods: generally do not count as qualifying labour-related costs.
- VAT: must be handled according to the invoice’s documented taxable cost components.
Do not invent an estimated labour percentage. If the invoice does not disclose a sufficient labour split, request an appropriate breakdown from the supplier. The calculator must not estimate an eligible share on its own.
Worked example: separately itemised labour
This is an illustration of a statutory formula, not an individual tax refund prediction. Other qualifying expenses, public funding and prior use of the annual limit can affect the amount ultimately available.
What conditions need checking?
- Qualifying household: the services must meet § 35a’s household and EU/EEA conditions.
- Invoice evidence: the qualifying labour component must be identifiable.
- Cashless payment: the payment must be made to the service provider’s account. Paying cash is not sufficient.
- No impermissible double benefit: the same costs may not already be used in an excluded way, and certain publicly subsidised measures may not qualify.
- Annual household cap: the €1,200 limit does not reset for each invoice or each member of the same household.
What if the invoice has no labour breakdown?
Ask the provider for a corrected or supplementary cost breakdown. Until there is adequate evidence of the qualifying component, the § 35a calculator should display no modelled credit for a missing labour split. The annual tracker contains only entries you supply during the current session and is not a complete tax record.
Frequently asked questions
Can I claim the materials?
Generally no. Materials and supplied goods are excluded from the eligible labour-related costs.
Is a receipt enough if I paid cash?
No. The law requires an invoice and payment into the service provider’s account.
Is €1,200 available for every invoice?
No. It is an annual household cap, not an invoice-by-invoice cap.
Does the relief raise monthly net salary?
No. It concerns annual income tax, never an automatic monthly wage increase.