Maximum Overtime in Germany: What the Working Hours Act Allows

The question of how much overtime is allowed in Germany sounds like a simple legal question. It is not. The Working Hours Act (Arbeitszeitgesetz, ArbZG) sets clear limits on maximum overtime. The real risk arises in everyday business: not because employers ignore the rules, but because a gap opens up quietly between the legal framework and how it is actually applied in project business.

When the deadline sprint becomes a legal problem

In project-driven SMEs in IT, management consulting and agencies, overtime does not result from strategic decisions but from deadline pressure, staff shortages and phases of intense utilization. It is perceived as a temporary phenomenon, rarely tracked systematically and often only becomes visible when someone resigns, a labor inspection is due or a works council is set up.

That is exactly when three patterns show up that recur again and again in practice:

• No ongoing tracking. Overtime accumulates on the basis of habit and trust, without the compensation status of each employee being tracked continuously. The compensation period quietly runs out.
• Outdated contract clauses. Wording such as "any overtime worked is covered by the salary" has been invalid since the landmark ruling of the Federal Labor Court (Bundesarbeitsgericht, BAG) of 1 September 2010 (case no. 5 AZR 517/09). Many SME contracts still contain it anyway, because there was never a pressing reason to review them.
• Missing approval documentation. Additional work is agreed via chat or verbally, without written proof. The rule is: overtime worked on the employee's own initiative does not automatically give rise to a pay claim. However, as soon as it is documented that the employer tolerated or approved the additional work, the obligation to pay for it or compensate it with time off arises.

The result is a liability risk that builds up over months and only becomes quantifiable when it is too late to resolve it at no cost. According to the IAB working time accounts 2025, employees in Germany worked an average of 15.6 hours of unpaid overtime per person over the year. Experience shows that this figure is noticeably higher in project-driven industries.

What follows is not an employment law compendium. It is an orientation on where the limits are, how to comply with them in practice and where the line between permitted additional work and a clear breach of German overtime law becomes blurred.

What the German Working Hours Act actually regulates

Statutory maximum working hours and the maximum overtime limit

Section 3 ArbZG sets the maximum working time per working day at eight hours. This limit can be extended to up to ten hours a day if the average of eight hours per working day is not exceeded within six calendar months or 24 weeks. The maximum amount of overtime per working day is therefore two hours.

The law assumes a six-day working week. The regular maximum weekly working time is 48 hours. In justified exceptional cases, up to 60 hours per week are temporarily possible, provided compensation is ensured over the entire reference period.

The law has no fixed monthly overtime limit. What counts is the average over the compensation period. An employee with a contractual 40-hour week may well work 50 or 55 hours in an intense month, provided that compensation down to the permitted average of eight hours a day actually takes place in the following months. If this compensation does not happen, the statutory maximum working time has been breached.

Documentation duty under the ArbZG

Under Section 16(2) ArbZG, employers must record any working time that exceeds eight hours a day and keep these records for at least two years. This obligation applies regardless of whether the company uses digital or paper-based time tracking.

In its landmark decision of 13 September 2022 (case no. 1 ABR 22/21), the Federal Labor Court also clarified that employers are obliged to systematically record all working time. The fact that this has not yet been codified in law does not change this obligation.

Exceptions: collective agreements, executive employees and 2025 reform plans

Section 7 ArbZG allows deviations through a collective agreement or a works agreement. In the IT industry and the consulting sector, there are corresponding arrangements that may permit different compensation periods or higher daily maximum working hours. These agreements must be actively documented and applied.

The Working Hours Act does not apply to executive employees (leitende Angestellte) within the meaning of Section 18 ArbZG. In practice, this category is narrowly defined and courts interpret it restrictively. Labelling someone as "executive" internally without the legal requirements being met does not create genuine protection from liability.

Relevant for planning: the 2025 coalition agreement provides for making the daily maximum working time more flexible in favor of a weekly limit of 48 hours, directly implementing the framework of the EU Working Time Directive 2003/88/EC. As of April 2026, no change to the law has been made yet. Until it is implemented, the existing law continues to apply unchanged.

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Staying within the overtime limit: putting it into practice

Why a lack of transparency costs more than the overtime itself

According to the IAB working time accounts 2025, employees in Germany worked an average of 15.6 hours of unpaid overtime per person over the year. Experience shows that this figure is significantly higher in project-driven industries such as IT services, management consulting and digital agencies.

The problem rarely lies in a lack of goodwill but in a lack of transparency: without ongoing tracking, neither managers nor HR know whether the compensation period is still running or has already expired. Spreadsheets show individual months but not rolling six-month windows. Trust-based working time without time tracking creates flexibility, but in the event of a dispute it places the burden of proof entirely on the employer.

Scenario 1: IT service provider, 40 employees

During a project kickoff, a development team works ten hours a day for four weeks. Under the Working Hours Act, this is initially permissible, provided the two extra hours per day are compensated within the following months.

Without systematic tracking: nobody documented when the additional work began. After three months, a mountain of hours has built up that can no longer be compensated within the statutory compensation period. Temporarily permitted additional work turns into a clear breach of overtime law.

With digital time tracking: the system shows per project how much overtime has accumulated and gives HR an early warning when the rolling six-month window is about to tip. Managers can schedule compensation days in a targeted way before a breach occurs.

Scenario 2: management consultancy, 25 consultants

In a consultancy with a strong project business, consultants work very different weekly hours depending on the client situation. In presentation weeks, many work well beyond the permitted overtime limits. For this group, courts examine very closely whether the exception for executive employees under Section 18 ArbZG actually applies.

Without clear documentation and without a provable compensation process, the liability risk is considerable. At the same time, many consultancies have collective agreements or works agreements that define different compensation periods. These must be actively applied and documented; otherwise the statutory standard limits apply in the event of a dispute.

Scenario 3: digital agency, 20 employees

For agencies with mixed teams of designers, developers and project managers, the biggest challenge is uneven distribution: some employees regularly accumulate overtime every month, others hardly any. Without project-based time tracking, it is impossible to prove or manage these differences reliably.

This creates two problems at once: towards the employee, there is no basis for fair pay or compensation. And towards the supervisory authority, the records of additional work required under Section 16 ArbZG are missing.

Step by step: how to set up the process

Step 1: Assess the current state.
Check for every employee whether the start, end and breaks of their daily working time are documented without gaps. If this foundation is missing, it is the first point of attack in any labor inspection.

Step 2: Actively manage the compensation period.
Set up the rolling six-month window for each person and track the overtime balance continuously. As soon as the average threatens to exceed the eight-hour limit, you need an automated escalation to HR. Keep in mind: compensation must actually take place, i.e. in the form of approved time off or documented shorter working days. A balance on paper that is never reduced does not protect you from an administrative offense.

Step 3: Review contractual provisions.
Make sure overtime clauses in employment contracts are worded specifically: either as an absolute number of hours per calendar month or as a percentage of weekly working time. Blanket wording without a cap on hours is invalid and creates the liability risk many employers underestimate.

Step 4: Involve managers.
Team leads and project managers need to know from what point additional work requires approval and how compensation is organized. This responsibility must be explicitly delegated, put in writing and documented in a traceable way.

Step 5: Analyze overtime by project.
In IT services and consulting in particular, overtime almost always arises at project level and is rarely distributed evenly across all employees. If you analyze additional work by project, you can identify early on which projects systematically lead to extra workload. This is not an HR question but a question of project management and pricing: if a project regularly causes more hours than calculated, it directly affects the margin.

Common mistakes that increase the risk unnecessarily

The same avoidable mistakes appear again and again in practice:

• Overtime is recorded, but compensation is not actively planned or monitored.
• Additional work is approved verbally or via chat, without written documentation.
• HR receives hour reports once a month instead of having real-time access to the current balance.
• When new employees are onboarded, the overtime provisions in their contracts are not updated.
• Different teams or pay groups have different compensation periods, but these are managed in the same process.

Each of these points is manageable on its own. Combined with a growing team and increasing project pressure, however, they can build up into a real compliance risk.

The point at which manual processes systematically fail

If you want to stay within the permitted overtime limits over the long term, you need more than a spreadsheet and an occasional look at the time account. Under Section 22 ArbZG, breaches of the Working Hours Act can be punished with fines of up to €30,000. If the health of the workforce is endangered intentionally, Section 23 ArbZG even provides for imprisonment of up to one year.

The actual risk in SMEs is less a deliberate breach of the rules than unnoticed accumulation. Overtime arises from project work, is perceived as a temporary phenomenon and is not managed systematically. By the time a resignation, a labor inspection or a works council makes the situation visible, a considerable liability may have built up over months.

Compliance and project controlling from one source

ZEP was developed for exactly this environment: project-driven SMEs in management consulting, IT consulting and engineering, where additional work is part of the business model and at the same time must be managed in a legally compliant way. Employees book their start, end and break times every day; the software calculates the rolling average for each employee and shows HR and managers in real time how much room is left within the statutory compensation period. Approval processes for additional work can be mapped directly in the system, so the employer's instruction is documented, which is a prerequisite for a pay claim.

In addition, overtime in ZEP can be analyzed directly at project level. This gives project managers and controllers a figures-based data foundation that goes beyond simply documenting working time: they see which projects systematically generate additional work and can adjust the costing basis for future proposals accordingly. Compliance and project controlling are thus managed from one shared data set, without duplicate maintenance or media breaks between recording hours and a project controlling tool.

If you want to structure the calculation and payment of overtime while managing the reduction of overtime in a legally compliant way, ZEP offers all the relevant functions on one GDPR-compliant platform operated in German data centers. If you also want to word overtime-included clauses correctly and make them contractually sound, you will find further guidance in the ZEP guide on overtime covered by salary.

Conclusion: what you should do now

The German Working Hours Act sets clear limits. What is missing in practice is operational implementation:

• Review all employment contracts for invalid overtime clauses and reword them with specific numbers of hours or percentages.
• Make sure that additional work beyond eight hours a day is documented without gaps and that the records are kept for at least two years.
• Introduce active monitoring of the compensation period: per person, not just at team level.
• Define bindingly from how many hours additional work requires approval, and assign managers operational responsibility for compensation.
• Check whether an existing collective agreement or works agreement provides for different rules on the overtime limit, and apply them actively and with documentation.