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Electromobility continues to gain importance—and there are also significant new developments in tax law: Starting January 1, 2026, the electricity price allowance will come into effect. Its purpose is to enable both employers and employees to settle electricity costs much more easily when the charging of a company car is initially paid privately, for example via a home charging station. The basis for this is the average annual electricity price for private households published by the Federal Statistical Office. In the future, employers can choose between providing proof of actual costs and using the new electricity price allowance. This not only reduces administrative effort but also allows for optimal tax treatment when reimbursing electricity costs.

Recent legislative changes and upcoming administrative guidance have brought important updates to the (wage) tax treatment of employer-provided benefits, particularly regarding incentives for company cars with alternative engines and reimbursement of electricity costs. In this article, we provide an overview of the current (wage) tax regulations for company cars and outline the differences between lump-sum and itemized reimbursement models for charging electric vehicles. Employers will gain practical insights into how to implement these benefits in a tax-optimised and legally compliant manner.