For many employees overtime is part of the working day — particularly when working from home. According to a recent analysis by the German Trade Union Confederation (DGB), around 44% of employees work overtime regularly. About a quarter put in more than five extra hours a week. The trend is most pronounced among those working from home: there, 52% of respondents say they work overtime, compared with 31% of employees who do not work from home.
Overtime · Germany
Working from home means working longer
Employees working from home put in overtime far more often than employees who do not.
Share of employees working overtime
Analysis by the German Trade Union Confederation (DGB)
The causes usually lie in work intensification, time pressure and thin staffing. The greater those pressures, the more often people work beyond their contractual hours. It becomes critical above all where total working time exceeds the limit of 48 hours a week — occupational physicians warn of health risks there.
What the coalition agreement provides for
A glimmer of hope for employees could come out of political developments. The coalition agreement between the CDU, CSU and SPD of April 2025 states:
“Anyone who wants to work more voluntarily should keep more of it. We will immediately exempt from tax those overtime premiums that go beyond full-time work as agreed in, or oriented towards, collective agreements.”
In other words: if the planned rule is implemented, overtime premiums in Germany could be exempted from tax — provided they go beyond the regular working time set by collective agreement. For employers this would open up the possibility of granting tax-free premiums as an incentive for extra hours — a model that could be attractive at a time of skills shortages and rising work intensity.
The relief could also be an important step towards paying for unpaid extra hours more fairly and easing the burden on employees, without raising non-wage labour costs for German companies. That would be of interest to French subsidiaries in Germany as well.
The French model
France already has experience with exempting overtime from tax. Under President Nicolas Sarkozy, the principle of “Travailler plus pour gagner plus” (“work more to earn more”) was introduced in 2007, giving overtime favourable tax treatment. Although the measure was abolished in 2012, it was later reintroduced.
At present, overtime in France is free of tax up to EUR 7,500 a year. The rule applies to full-time and part-time employees alike and covers additional hours going beyond contractually agreed working time.
A worked example
An employee with a monthly salary of EUR 2,000 works 15 hours of overtime a month. At an hourly rate of EUR 13.18, with premiums of 25% for the first 8 hours and 50% for the remaining 7, the monthly premium comes to EUR 270.19, or EUR 3,242.28 a year. That is below the EUR 7,500 allowance, so no income tax falls due on this overtime for your French staff.
Relief on social security contributions
This overtime is also exempt from social security contributions in France, which benefits employees and employers alike. Employers receive a flat-rate reduction in their contributions:
| Company size | Relief per hour of overtime |
|---|---|
| Fewer than 20 employees | 1.50 € |
| 20 to 249 employees | 0.50 € |
These rules apply to overtime beyond the statutory working time.
Important: the exemption has to be shown on the payslip issued by your French employer under the heading « Réduction salariale sur heures supplémentaires » (“salary reduction on overtime”).
Conclusion
The planned exemption of overtime premiums in Germany takes its cue from working models such as the French one. If the rule is implemented, employees and employers alike could benefit financially. For employees it would mean keeping more of their gross pay, and companies could pay for overtime more attractively without carrying additional non-wage labour costs.