The lack of interest in working overtime is prevalent in Germany nowadays.
In Germany, the landscape for overtime work has been shaped by various factors, with the key elements being the working time regulations, tax exemption of overtime surcharges, minimum wage law context, collective agreements, and social partner involvement.
The current law limits maximum daily working time but is moving towards a weekly maximum of 48 hours, in line with the EU Working Time Directive. This shift provides more flexibility in distributing working hours, which can impact overtime willingness and feasibility. Minimum rest and break times will largely remain unchanged. Electronic recording of working time will be generally required, with some exemptions for trust-based working arrangements.
Proposals are in place to make all overtime surcharges fully tax exempt going forward. This financial incentive aims to make overtime work more attractive to employees and increase their willingness to work extra hours.
A rising minimum wage, potentially reaching €15 per hour in 2026, sets a wage floor that interacts with overtime pay and related incentives. The minimum wage commission bases proposals on the median wage level, affecting employee earnings including overtime compensation.
Details about managing working time and overtime regulations are expected to be negotiated with social partners such as trade unions and employer associations, which traditionally influence overtime conditions in Germany.
Special cases for cross-border workers may also come into play, with frontier workers living in France but working in Germany benefiting from specific overtime tax exemptions under bilateral tax treaties.
From the general labor law principles, overtime pay is typically set at a premium rate (often 1.5 times normal pay), regulated under labor standards. There is an emphasis on protecting rest periods and controlling maximum working hours to avoid employee exhaustion, affecting how much overtime is legally and physically feasible.
Electronic working time recording adds transparency but also regulatory oversight, which could influence employer and employee behavior toward overtime.
In summary, the framework promoting overtime in Germany combines flexible weekly work limits, financial incentives through tax exemptions on overtime pay, rising minimum wage floors, and social dialogue mechanisms. These elements shape both the willingness (through financial and regulatory incentives) and the ability (through flexible work hour caps and recording) of employees to work overtime.
While family demands and unpaid leave constraints specific to Germany's overtime context are not explicitly mentioned in the current proposals, these factors are recognized internationally as relevant factors affecting employee work-time decisions. The new government proposals from 2025 appear focused on balancing flexibility with protective conditions to foster overtime work while maintaining worker rights.
[1] Source: Bundesministerium für Arbeit und Soziales (Federal Ministry of Labour and Social Affairs) [2] Source: International Labour Organization (ILO) [3] Source: Bundesfinanzministerium (Federal Ministry of Finance)
- In light of the proposals to make all overtime surcharges fully tax-exempt, the finance sector will closely watch the impact this financial incentive has on the business landscape, potentially influencing employee willingness and feasibility to work overtime.
- The political arena might face pressure to address the intersection of overtime work, minimum wage laws, and general-news concerns, especially as the minimum wage in Germany rises towards €15 per hour in 2026, setting a wage floor that interacts with overtime pay and related incentives.
