What does §35a EStG cover?

Section 35a of the German Income Tax Act gives a direct tax reduction of 20% of the labour cost of household-related services and craftworker services performed in your home. It covers cleaning, gardening, care, and tradesperson labour for repairs and maintenance.

What are the annual caps?

There are three baskets: household services up to a €4,000 credit (on €20,000 of cost), a household minijob up to €510 (on €2,550), and craftworker labour (Handwerkerleistungen) up to €1,200 (on €6,000 of labour). Each basket is separate.

Why are material costs excluded?

The §35a credit only applies to labour, travel, and machine costs, not to materials. So on a tradesperson's invoice you can only claim the labour portion. Ask the contractor to itemise labour separately to maximise your claim.

Does the payment method matter?

Yes. The tax office requires that you receive an invoice and pay by bank transfer, not cash. Cash payments for craftworker and household services are not eligible for the §35a credit, so always pay electronically and keep the receipt.

Is this a deduction or a direct credit?

It is a direct reduction of your assessed income tax (Steuerermäßigung), not a deduction from taxable income. That makes it valuable because each eligible euro of labour reduces your tax bill by 20 cents, regardless of your marginal rate.

Germany Haushaltsnahe Dienstleistungen Tax Credit Calculator

German households can reduce their income tax under §35a EStG by claiming 20% of the labour cost of household services and tradesperson work performed in their home. This calculator applies the three separate baskets and their annual caps.

How it works

Each category earns a 20% credit up to its own cap. Only labour, travel, and machine costs count — never materials:

household_services = min(cost × 0.20, 4000)
minijob            = min(wages × 0.20, 510)
craftwork (labour) = min(labour × 0.20, 1200)
total_credit       = sum of the three baskets

The total directly reduces your assessed income tax.

Tips and notes

Split your invoices: only the labour, travel, and machine portion of a tradesperson bill qualifies, so ask for an itemised invoice and never pay craftworkers in cash — the tax office requires a bank transfer. The three baskets are independent, so a household using a cleaner, a minijob helper, and a plumber in the same year can stack all three credits up to a combined €5,710. Costs above each cap are simply ignored. This is an estimate; confirm the labour split and documentation requirements with a Steuerberater or the Finanzamt.