In short and in plain language
Many customers ask if they can claim the work against tax. Often they can. This article looks at that.
Only the labour costs count. Materials do not. New buildings do not count either.
The customer needs an invoice. They must pay into your bank account. Cash payment takes the benefit away. The year of payment is what counts.
Put a short note on the right pages. Repeat what the law says. Do not promise an amount. Point people to a tax adviser or the tax office.
This way you answer the price question before the call. We build your website at a fixed price.
Every renovation ends with the same question, and as a rule it comes over the phone: can I claim this against tax? For renovation, maintenance and modernisation work in the household, income tax is reduced by 20 percent of the expenses, capped at 1,200 euros a year (Section 35a (3) of the German Income Tax Act, EStG). Whether that amount actually reaches the customer is decided by the business, not by the customer: with an invoice, with labour costs shown separately and with payment made into a bank account. 94 percent of trade businesses run their own website (Bitkom) - and very few of them carry a single sentence about this. Yet the tax relief is not a discount you give away. It is a calculation the customer is already doing before picking up the phone.
Key takeaways
- For renovation, maintenance and modernisation work in the household, income tax is reduced by 20 percent of the expenses, capped at 1,200 euros a year (Section 35a (3) EStG). Only the labour costs are deductible, not the material.
- The deduction requires that the customer has received an invoice and that payment has been made to the account of the provider of the service (Section 35a (5) EStG). A business taking cash removes the deduction - no matter how tidy the invoice looks.
- The payment date decides the tax year: expenses are deducted for the calendar year in which they were paid (Section 11 (2) EStG). The fourth quarter therefore determines whether a job still counts for the customer in the current year.
- Which works qualify is set out measure by measure in Annex 1 to the Federal Ministry of Finance letter of 9 November 2016 - from gutter cleaning to heating maintenance. New-build measures do not qualify, and neither do material costs.
- 87 percent of trade businesses see customers becoming markedly more price-sensitive (Bitkom). A note module on every relevant service page, an FAQ entry and one line in the quote cost nothing and answer the price question before the call.
A deduction almost every private customer can use
Section 35a of the German Income Tax Act has three separate pots, and in everyday practice they are regularly mixed up. Subsection 1 covers minor employment in the household, subsection 2 other household employment, household-related services and care services, subsection 3 the trade services. For your business the third pot is the one that counts: the relief amounts to 20 percent of the expenses, capped at 1,200 euros a year (Section 35a (3) EStG). What matters is how the customer files this mentally. It is not a business expense and not a reduction of the invoice total, but a deduction taken directly from the assessed income tax.
The person entitled is the taxpayer in whose household the work is carried out. That household has to be located in the European Union or the European Economic Area (Section 35a (4) EStG); for a business working within its own district this is usually not an issue. The more frequent question is who uses up the cap: where two single people share one household, they may claim the maximum amounts only once in total (Section 35a (5) EStG). The cap therefore attaches to the household, not to the person - a follow-up question that comes up regularly on the phone and belongs in the FAQ of a service page.
In figures the difference becomes tangible quickly. If an invoice shows 1,000 euros of labour, 20 percent of that is 200 euros by which the customer's income tax is reduced. The cap of 1,200 euros is reached arithmetically at 6,000 euros of labour in a calendar year - an order of magnitude a bathroom refurbishment or a heating replacement can easily reach. Section 35a EStG makes no provision for carrying an unused amount into another year. That is exactly why customers hear the advice from their tax adviser to spread larger measures across two calendar years. For your scheduling that is not a side note but an argument for a date in January.
| Subsection of Section 35a EStG | What it covers | Relief |
|---|---|---|
| Subsection 1 | Minor employment in the household | 20 percent, capped at 510 euros |
| Subsection 2 sentence 1 | Other household employment and household-related services | 20 percent, capped at 4,000 euros |
| Subsection 2 sentence 2 | Care and support services as well as costs of accommodation in a home | within the same cap as sentence 1 |
| Subsection 3 | Trade services for renovation, maintenance and modernisation work | 20 percent, capped at 1,200 euros |
| Subsection 5 sentence 2 | Applies to subsections 2 and 3 alike | The deduction applies only to labour costs |
This split explains why the phrase up to 1,200 euros can mislead on a website: a customer who also settles a household help in the same year is drawing on a different pot, not the same one. So describe the framework the statute sets out, not an amount the customer receives. In case of doubt, that is the difference between information and a promise.
Three conditions that carry everything
The deduction rarely fails because of the trade involved and often because of how the job is settled. Section 35a (5) EStG names two conditions in a single sentence, and both sit with the business: the invoice and the payment route. The third condition sits one sentence earlier and concerns the content of the invoice - what is deductible is the labour, not the material.
The tax relief under subsections 2 and 3 may be claimed only if the taxpayer has received an invoice for the expenses and payment has been made to the account of the provider of the service.
Two words carry the whole sentence: invoice and account. A receipt for a cash payment is not a payment to the account of the provider of the service, and a neatly worded invoice does not change that. Anyone who takes cash at the kitchen table and writes out a receipt removes the deduction from the customer - regardless of how tidy the paperwork looks. For many businesses this is the real reason to name the payment route on the website before someone turns up at the door with banknotes in hand.
In practice the question about the card terminal follows immediately. The statute refers to payment to the account of the provider of the service; what follows from that for individual payment methods is for the customer's tax adviser to assess. For the business the robust route remains the simplest one: invoice with a payment deadline, bank transfer, bank statement on the customer's side. That chain can be presented to the tax office without intermediate steps, and it is the same chain you can explain on your website in a single sentence.
Cash costs the deduction
Only the labour costs count
The deduction from income tax under subsections 2 and 3 applies only to labour costs (Section 35a (5) EStG). This half-sentence decides whether your invoice is usable for the customer. If it shows a single total for a complete bathroom, the tax office cannot identify the qualifying share, and the customer is holding an invoice that does nothing for them at this point.
Which expenses qualify and which sit alongside them is set out measure by measure in Annex 1 to the Federal Ministry of Finance letter of 9 November 2016. It lists material costs in the column of non-qualifying expenses. In practice that means your invoice needs two lines, not one. Whether you show the labour per item or as a total at the end is secondary - it should be visibly separate.
The invoice that produces the fewest follow-up questions is the one that names the labour explicitly and supplies the payment route alongside it. A line such as: labour included in the invoice total, for example 840.00 euros gross. Below it a sentence on the payment method, below that the bank details. Those three lines cost you nothing and save the office the spring calls in which someone is hunting for last year's invoice and asking for a breakdown.
- A line showing the labour included in the invoice total, separate from the material - as a total or per item, but visibly.
- The address where the work was done, that is, the household. Without it the link to the taxpayer's household is missing (Section 35a (4) EStG).
- The period in which the work was performed, so that execution and payment can be told apart.
- The bank details of the business and a payment deadline. The reference to a bank transfer belongs on the invoice, not only in conversation.
- For maintenance contracts, a statement from which the labour share is apparent - a flat fee without a breakdown is of little help to the customer here.
- A footer line referring to Section 35a EStG that gives no ruling but points to the tax adviser.
These six points are paperwork, but they are the reason the note on the website carries any weight. A business that announces on its service page that labour will be shown separately should do so on every invoice. An announcement on the website that the accounts do not honour is more expensive than none at all - the same mechanism as with showing prices on a trade website.
Which works qualify - and which do not
Whether a particular measure falls under Section 35a (3) EStG is answered by a table rather than a rule of thumb. Annex 1 to the Federal Ministry of Finance letter of 9 November 2016 lists measures alphabetically and assigns to each whether it qualifies and whether it counts as a household-related service or as a trade service. For everyday work in the business this is the practical side of the whole subject, because it anticipates the typical disputes.
For trade businesses there is a lot of good news in it: work on the roof, on floor coverings, on the facade and on garages qualifies as a trade service, as do heating maintenance and repair, gutter cleaning, the leak test and the chimney sweep's work. On the other side stand items that like to travel along in a quote: new-build measures do not qualify, nor does the demolition of a dilapidated building followed by a new build, and meter-reading services, meter rental and the billing of consumption fall outside as well.
- Extensions, added storeys and the creation of floor space that did not exist before: under Annex 1 to the Federal Ministry of Finance letter of 9 November 2016, new-build measures do not qualify. The note therefore does not belong on a page about new builds.
- Refurbishment of existing property, replacement, repair, maintenance: this is where the note carries. Anyone running a page for plumbing and heating already has the right place for it.
- Publicly funded measures: the deduction does not apply to publicly funded measures for which low-interest loans or tax-free grants are used (Section 35a (3) EStG). Where your customers regularly apply for funding, that sentence belongs next to the note.
- Street cleaning: the share for the pavement qualifies as a household-related service, the share for the carriageway does not (Annex 1 to the Federal Ministry of Finance letter of 9 November 2016).
- Fault clearance on existing installations: heating maintenance and heating repair qualify as trade services. If you are presenting emergency service online, you can carry the note there too.
The table does not replace the ruling
The payment date decides the tax year
In the trades there are often weeks between the day the fitters leave the yard and the day the money lands in the account. For the tax relief the second day counts: expenses are deducted for the calendar year in which they were paid (Section 11 (2) EStG). A measure carried out in November and paid in January takes effect for the customer in the following year - regardless of when the invoice was written.
For the business this is both a selling point and a scheduling problem in the fourth quarter. Customers who have not yet used up their cap for the current year want to pay before the turn of the year. Customers who have used it up want to push the next measure into January. Both wishes can be planned around if they are on the table early - and they are on the table early if the website answers the question before anyone calls.
| Case | Work carried out | Payment | Counts in tax year |
|---|---|---|---|
| Invoice before Christmas, transferred at once | December | December | current year (Section 11 (2) EStG) |
| Invoice before Christmas, transfer on 5 January | December | January | following year |
| Work in November, invoice only in February | November | February | following year |
| Interim payment in December, final invoice in March | December to March | December and March | split across both years |
| Maintenance contract debited in January | all year | January | year of the debit |
This table answers the question that regularly comes up on the phone in December, and it answers it without giving tax advice: it reproduces what Section 11 (2) EStG says. In exactly this form it belongs on the website - as a paragraph on the service page, as an FAQ entry, as a line in the quote.
The fourth quarter is the occasion, not the discount
Where the note belongs on the website
A single sentence on the home page achieves little, because hardly anyone looks for it there. The note works in the places where the customer is already thinking about money: on the service page, in the process section, in the quote and in the FAQ. Four places, one text - and that text should be identical in all four so that it can be maintained.
For the implementation one module is enough, written once and inserted per service page. It has three parts: a reproduction of what the statute provides, a note on what your business does about it, and the disclaimer that this is not tax advice. If you keep the module as a data record, you can update it at the turn of the year in one place instead of twelve. On a website for tradespeople that we build, this module sits centrally from the outset.
{
"module": "tax-note-35a",
"title": "Tax relief for trade services",
"text": "For renovation, maintenance and modernisation work in the household, Section 35a (3) EStG provides for a reduction of income tax by 20 percent of the expenses, capped at 1,200 euros a year. The deduction applies only to labour costs. We show labour costs separately on every invoice and settle by bank transfer.",
"disclaimer": "This note reproduces the wording of the statute and does not replace tax advice. Whether and to what extent the relief applies is for your tax adviser or your tax office to decide.",
"placement": ["service-pages", "process-section", "quote-template", "faq"],
"faq": {
"question": "Can I claim your invoice against tax?",
"answer": "Labour costs are shown separately on every invoice, and we settle by bank transfer. The conditions set out in Section 35a (5) EStG are therefore met on our side."
},
"as_of": "2026-09",
"review": "annually in October"
}The structure is deliberately sober. It names the provision, it names the figure, it names your own contribution and it draws the line. What it does not do is calculate. As soon as a specific refund amount appears on a website, information turns into a promise, and that promise cannot be kept, because it depends on the customer's tax return.
On every relevant service page
The module sits in the lower third of the page, after the process section and before the contact block. That is where it is read by people already thinking about cost - and not by those merely looking for the phone number.
In the quote and the order confirmation
Two sentences under the total: labour is shown separately, payment is made by bank transfer. That puts the note where the decision is actually taken.
Reviewed once a year
Amounts and references belong on the bench once a year, preferably before the fourth quarter. A calendar entry is enough, and there is only one place to check if the module is maintained centrally.
With a disclaimer, without advice
A sentence marking the note as information and pointing to the tax adviser and the tax office belongs in every location. It costs one line and keeps the statement within the scope a trade business is allowed to fill.
Anyone who has bundled all services onto a single page notices the strain here: the note fits refurbishment but not new builds, and on a combined page it inevitably sits next to both. Separate service pages per trade solve that problem along the way.
Wording it without making a tax promise
Between the statement that the customer saves 1,200 euros and the statement that under Section 35a (3) EStG income tax is reduced by 20 percent of the labour costs, capped at 1,200 euros a year, lies the difference between an advertising claim and a reproduction. The first version asserts a result the business cannot produce. The second reproduces what the statute says and leaves the calculation to whoever files the tax return.
Tone matters here about as much as grammar. A note that sounds like a discount raises the expectation that the business will somehow make up the amount if the tax office sees things differently. A note that sounds like a factual instruction is read and ticked off. For businesses writing their own copy this is a delicate spot - more on that in our article on writing your own website copy.
- Name the provision, not just the figure: adding Section 35a (3) EStG turns an assertion into a citation.
- Describe the statute rather than the customer: income tax is reduced describes the provision, you save describes a result that is still outstanding.
- Show the cap as a limit, not as a prospect: capped at 1,200 euros a year rather than up to 1,200 euros back.
- Name your own contribution concretely: labour shown separately, settlement by bank transfer. That is the promise you can keep.
- Point to the tax adviser and the tax office without brushing the customer off - one sentence is enough.
- No invented sample calculation with names or a customer story. A neutral example with round figures is enough and promises nothing.
The same restraint applies to the contact form. A field labelled tax advice requested promises something a trade business is not allowed to deliver. A selection field asking whether the job should still be invoiced this year, by contrast, supplies exactly the information that steers scheduling in the fourth quarter - and that is a field that pays for itself. How many fields a trade enquiry form can carry we have described separately.
What the note does for the business
The note is not an end in itself. It answers a price question before it turns into an objection. 87 percent of trade businesses see customers becoming markedly more price-sensitive, 89 percent see customers expecting individual quotes (Bitkom). In that setting a single sentence about the tax relief shifts how the price is perceived without the price changing.
The second effect concerns settlement. A business that announces on its website that labour will be shown separately and that it settles by bank transfer has fewer discussions about cash and fewer queries in spring. The digital route is gaining ground anyway: digital quote dispatch (68 percent) and digital invoice dispatch (62 percent) are the most widely used applications (Bitkom). Put the two together and you place the note in the template once and have it on every invoice afterwards.
- Fewer price discussions in the first conversation, because part of the invoice is already filed in the customer's mind.
- Fewer cash transactions, because the payment route is named in advance rather than negotiated at the kitchen table.
- Better appointments in the fourth quarter, because customers know the payment date as a criterion (Section 11 (2) EStG).
- Fewer queries in spring, because the invoice already shows the labour separately.
- A reason to make contact outside a breakdown: the note is a reason to write to existing customers in October.
- A text module that belongs on every relevant service page and adds substance where otherwise only the service itself is described.
What should not happen next is that the enquiry disappears into nothing. A business that writes about the tax relief in October while its form emails sit in the spam folder has done the work for nothing. Why that happens more often than you would think is covered in our article on why trade enquiry emails end up in spam.
Write the module
Three parts: reproduction of the statute, your own contribution, disclaimer. Written once, maintained in one place. Allow an hour if the wording is agreed within the business.
Fit out the service pages
On every page describing refurbishment, repair or maintenance of existing property. The module does not belong on new-build pages, because under Annex 1 to the Federal Ministry of Finance letter of 9 November 2016 new-build measures do not qualify.
Extend the FAQ
One question, one answer, one pointer to the tax adviser. The answer answers the customer's question; it does not explain income tax law.
Align quote and invoice
Labour is shown separately, the bank details appear on every document, a payment deadline is set. Only then does the website honour what it announces.
Review in October
One date in the calendar, one look at amounts and references, one test of the form emails. After that the business is set for the fourth quarter.
Three parts: reproduction of the statute, your own contribution, disclaimer. Written once, maintained in one place. Allow an hour if the wording is agreed within the business.
On every page describing refurbishment, repair or maintenance of existing property. The module does not belong on new-build pages, because under Annex 1 to the Federal Ministry of Finance letter of 9 November 2016 new-build measures do not qualify.
One question, one answer, one pointer to the tax adviser. The answer answers the customer's question; it does not explain income tax law.
Labour is shown separately, the bank details appear on every document, a payment deadline is set. Only then does the website honour what it announces.
One date in the calendar, one look at amounts and references, one test of the form emails. After that the business is set for the fourth quarter.
Before the year ends: the checklist
The fourth quarter decides whether a measure still takes effect for the customer in the current year. For the business that means the website should answer the question from October and invoicing should be geared to it from November. The following list is built so that it can be worked through in an hour.
It does not replace a review by the tax adviser and it does not replace agreement with the office. It only makes sure the three things the customer eventually sees fit together: the website, the quote and the invoice. If one of those three says something different from the other two, you get exactly the calls you wanted to avoid.
- Every service page on refurbishment, repair and maintenance carries the note module with provision, own contribution and disclaimer.
- Pages about new builds do not carry it.
- The FAQ contains a question about deductibility and an answer that points to the tax adviser.
- The quote template and the invoice template show labour separately.
- Every invoice carries bank details, a payment deadline, the address where the work was done and the period of performance.
- The question of cash payment is settled within the business: either ruled out or named on the website in advance.
- A calendar entry in October checks amounts, references and the delivery of form emails.
- A test enquiry to a mailbox outside the business shows that the form emails arrive.
Working through these points does not sell the tax relief, it files it - and that is precisely the job of a website for tradespeople. It answers the questions that would otherwise be asked on the phone, in the order in which they come up. Which points are regularly missing on trade websites besides this one we have collected in the common mistakes on trade websites.
Sources for this article
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