Overview

• The Finance Ministry’s scientific advisory board advised Vice Chancellor Lars Klingbeil to abandon the tax exemption for overtime premiums, according to a letter published on Oct. 2 by FAZ.
• The experts warn of take-up effects, revenue losses, and increased bureaucracy, and they judge the rule highly vulnerable to contract gaming.
• Board chair Jörg Rocholl calculates that a typical worker would keep about €3.50 more per overtime hour under the exemption, indicating a limited incentive.
• Citing international evidence, the letter notes that France’s more generous overtime tax break produced no significant rise in hours worked.
• An early coalition draft included the measure but later dropped it, the government has yet to decide on its fate, and positions diverge as Union lawmakers complain and employers’ and unions’ groups voice doubts.