If the salary of an employee does not exceed the income threshold of the statutory pension insurance (2024: EUR 90,600.00 (west) und EUR 89,400.00 (east), in each case annual gross income), employees are regularly entitled to overtime pay or time off in lieu. If the startup wants to avoid the financial burden of overtime, the employment agreement can include a provision on partial compensation for overtime through the fixed salary, beyond that provide for time off in lieu and an effective cut-off period. Such a clause needs to set out the number of overtime hours to be compensated by the fixed salary and must be in proportion to the regular working time; otherwise, it is ineffective. The exact number of hours of overtime that can be compensated by fixed salary has not yet been clarified. We do not recommend exceeding 20 % of the regular weekly or monthly working hours. Also, it's important that the statutory minimum wage must not be undercut if overtime is included.
But again, when drafting the relevant clauses of the employment agreement the startup should always keep in mind that the employment agreement suggests the startup's corporate culture! That's also why in practice many startups do not include such clauses in their agreements.