What is left of overtime pay after tax? Compare payout with time off in lieu.
Draft bill (Labour Market Strengthening Act) – not yet in force as of July 2026
8-9% church tax on income tax
Planned: tax-free surcharges for extra work
A draft bill (Labour Market Strengthening Act) proposes making surcharges for extra work beyond the full-time threshold (40 hrs/week, 34 hrs under a collective agreement) tax-free up to 25% of the base wage – social security contributions would remain. As of July 2026, this is not yet in force. Use the toggle above to simulate the planned rule.
Tax-free surcharges (§3b EStG):
Simplified calculation, as of July 2026.
Net payout
€139.18
for 10 overtime hours
Payout
€139.18
net
Time off in lieu
12.5 hrs
Value: €188.04
Recommendation
Choose time off in lieu
Difference: €48.86 for time off
Payout calculation
Deductions:
Notes
Tax notes:
Important note
These calculations are for non-binding information only and do not replace professional tax advice. All information without guarantee. Learn more
Our calculations are based on the following official sources (as of: July 2026):
Legal basis for income tax calculation
Basis for social insurance contributions
If you have built up overtime, the question arises: get it paid out or take it as time off in lieu? The answer depends on your personal marginal tax rate – and on how valuable free time is to you.
For this decision it is important to understand the tax treatment and to know the actual net value of your overtime. Our calculator shows you both options transparently.
Overtime is taxed as regular income – at your personal marginal tax rate. That means: the higher your salary, the more tax you pay on the overtime pay.
| Item | Amount |
|---|---|
| Overtime pay (gross) | €100.00 |
| Income tax (approx. 31%) | − €30.64 |
| Solidarity surcharge | − €0.00 |
| Social security (approx. 21%) | − €21.15 |
| Net payout | €48.21 |
With time off in lieu: You receive the full value of your net hourly wage as extra free time – with no deductions, since no additional income flows.
The tax on overtime depends directly on your tax class. Contrary to a common misconception, tax class 1 (single) and tax class 4 (married, both partners with similar income) use exactly the same income tax schedule. The monthly income tax deduction – and therefore the overtime net payout – is identical in both tax classes for the same gross amount.
| Item | Amount |
|---|---|
| Overtime pay (gross) | €200.00 |
| Income tax approx. 29% (class 1) | − €57.96 |
| Social security approx. 21% | − €42.30 |
| Net payout (class 1) | €99.74 |
| Item | Amount |
|---|---|
| Overtime pay (gross) | €200.00 |
| Income tax approx. 29% (class 4 = class 1) | − €57.96 |
| Social security approx. 21% | − €42.30 |
| Net payout (class 4) | €99.74 |
| Item | Amount |
|---|---|
| Overtime pay (gross) | €200.00 |
| Income tax approx. 21% (class 3) | − €41.85 |
| Social security approx. 21% | − €42.30 |
| Net payout (class 3) | €115.85 |
Note on class 3: The lower income tax deduction in tax class 3 is not a permanent tax advantage – it only shifts the deductions to the spouse in tax class 5. Under the joint income tax return, the actual tax burden is calculated for both partners together via spousal income splitting.
Important: The base wage for the overtime hour is taxed as regular employment income under the progressive tax principle. Current law provides for §3b surcharges for night, Sunday and public holiday work, which remain tax-free. A draft bill additionally proposes making surcharges for extra work beyond the full-time threshold (40 hrs/week, 34 hrs under a collective agreement) tax-free up to 25% of the base wage – but as of July 2026 this rule is not yet in force. In both cases, social security contributions continue to apply.
There is an exception for surcharges on special working hours. These are tax-free up to certain limits and can make the payout significantly more attractive.
Important: The tax exemption only applies to a base wage of up to €50/hour. The surcharges themselves remain subject to social security contributions.
Rule of thumb: Financially, a payout is almost always worth less than time off in lieu once tax and social security deductions are accounted for. The difference can be 35-45% depending on your marginal tax rate.
The Working Hours Act (ArbZG) regulates maximum working time: on average, a maximum of 48 hours per week over 6 months. The maximum daily working time is 10 hours, the standard working time 8 hours.
Overtime must generally be compensated – through time off or pay. However, an entitlement to pay only exists if this is contractually agreed.
Everything you need to know about overtime, payout and time off in lieu
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