Overtime Payout Calculator 2026

No. Regular overtime surcharges are subject to income tax and social security in 2026. The coalition agreement announces a tax exemption for surcharges on extra work beyond full-time (34 hours under a collective agreement, otherwise 40 hours). No law has been passed yet (as of September 2026). Separately, surcharges for night, Sunday and public-holiday work are tax-free under § 3b EStG. The government draft of the Income Tax Reform Act 2027 (cabinet, 2 September 2026) would raise the hourly-wage cap from €50 to €75 from 2027. It has not been enacted yet.

The simulation in the calculator is based on an assumption about the announced plan (not the text of a law or draft bill): it would only exempt overtime surcharges from income tax, not from social security contributions. That would be the key difference from the already applicable §3b rule for night, Sunday and public holiday work. The calculation therefore still applies contributions to health, long-term care, pension and unemployment insurance (employee share around 20%) on the simulated tax-free surcharge, as long as the contribution ceiling is not exceeded. The calculator shows the simulated tax-free portion separately.

Overtime is taxed like regular income – at your personal marginal tax rate. The higher your salary, the more tax you pay on the overtime pay. With a gross salary of €4,000/month, the marginal tax rate is around 31%, so after tax and social security only about €48 net remains from €100 of overtime pay.

Tax-free surcharges exist for special working hours: night work (8pm-6am) up to 25% of the base wage, Sunday work up to 50%, public holiday work up to 125%. Important: the tax exemption only applies to a base wage of up to €50/hour. For social security, the surcharges are contribution-free up to a base wage of €25/hour (§ 1 SvEV) and subject to contributions beyond that.

Financially, time off in lieu is usually more valuable, since no tax or social security deductions apply. Its value corresponds to your net hourly wage. With a payout, 35-45% is typically lost to tax and social security, depending on your marginal tax rate. However, tax-free surcharges can make a payout more attractive.

The Working Hours Act (ArbZG) regulates maximum working time: on average, a maximum of 48 hours per week over 6 months. Overtime must generally be compensated – through time off or pay. The maximum daily working time is 10 hours.

Only if this is regulated in the employment contract, collective agreement or a works agreement. Without a contractual rule, there is no automatic entitlement to pay or time off in lieu. Overtime generally must have been ordered or approved by the employer.

In tax class 4 (married, similar income), the income tax deduction is identical to tax class 1 – both use the same income tax schedule. With €3,500 gross/month, the marginal tax rate on overtime is around 30%. From a €100 gross payout, about €50 net remains after income tax and social security (~20%). With a larger amount of overtime, the next-higher tax rate can kick in, so splitting across two tax years is often worthwhile if possible.

Tax class 5 has the least favourable income tax deduction, since the spouse in tax class 3 uses the allowances. From €100 gross overtime, often only €50-55 net remains. Tip: a lot of this is recovered the following year via the income tax return – the tax liability is based on the combined income of both partners, not the provisional income tax deduction.

In tax class 1 (single, no children), the marginal tax rate at a medium income of around €3,500/month is roughly 30%. From €100 gross overtime, around €50 net typically remains after income tax (~30%) and social security (~20%). At higher income, the marginal tax rate rises further, reducing the net payout. Our calculator shows you the exact overtime net payout for your salary.

The base wage for the overtime hour is taxed as regular employment income at your personal income tax rate (progressive principle). For surcharges, a distinction applies: surcharges under §3b EStG for night, Sunday and public holiday work are tax-free up to the statutory limits – that is current law. In addition, the coalition agreement announces making surcharges for extra work beyond full-time tax-free; no law has been passed yet (as of September 2026). In the simulation in the calculator (an assumption, not the text of a law), overtime surcharges would remain subject to social security contributions; §3b surcharges are contribution-free up to a base wage of €25/hour (§ 1 SvEV).