Overview

• The CDU/CSU-SPD coalition is drafting a law to exempt allowances for overtime beyond tariff-based full-time hours from income tax.
• A calculation by Vereinigte Lohnsteuerhilfe indicates a standard full-time employee with 15 overtime hours could net an extra €34.14 per month.
• Part-time workers, who make up 29 percent of the German workforce and include about half of employed women, may not benefit from the exemption.
• Legal experts warn companies will face significant reorganizations of time-tracking systems, contract revisions and payroll adjustments.
• Data from the Institute for Employment Research shows German employees logged an average of 28.2 overtime hours per person in 2024, with over half unremunerated.