How are subpostmasters paid

Paid overtime - when and how much is paid?

Paid overtime - Some employees welcome the opportunity to work overtime in order to have a little more money in their pockets through extra work. Other workers prefer to enjoy their free time and are of the opinion that financial compensation cannot replace lost leisure time. How the legislator has regulated the payment of overtime, how high the overtime tariff is and when overtime is not paid, is worth a detailed investigation.

What exactly is overtime?

When employees exceed their normal working hours, overtime is incurred. Normal working hours are usually determined by an employment contract, a collective agreement or a works agreement.

The overtime is the exceeding of the maximum working time, which is prescribed by law. If the employment contract, the collective bargaining agreement or the works agreement obliges an employee to work overtime, then this form of overtime is usually remunerated with a special supplement.

In common parlance, overtime and overtime are mostly used in the same way.

When is an employee obliged to work overtime?

As a rule, the employee only has to be available to his employer for the agreed number of hours. Unless otherwise specified in the employment contract, employees do not have to work overtime. Most employment contracts, collective bargaining agreements and works agreements, however, contain the option that overtime may be incurred. In addition, there is an obligation to work overtime if the urgent case arises that damage to the company is averted through the overtime.

When can you refuse overtime?

Anyone who is supposed to work more than ten hours a day can also refuse to work overtime. Even if it is not evident that a reduction in overtime through free time or payment of overtime is guaranteed within the following six months, you as an employee can refuse to work overtime.

How is overtime paid?

There is no clear legal regulation for the payment of overtime. However, since the employee mostly works overtime at the instruction of the employer, the employer must also guarantee the payment of overtime in some form.

How must overtime be remunerated?

Many employment contracts, collective bargaining agreements and works agreements contain precise regulations on how the overtime is to be remunerated. In addition to the hourly rates that are used to calculate overtime pay, surcharges for overtime are also agreed in many contracts. If overtime is incurred, the employees are entitled to the remuneration specified in the contract.

Payment of overtime

Usually overtime is paid. The employment contract can stipulate that a certain number of overtime hours are paid for with normal wages. Overtime that goes beyond this number must then usually be compensated with the hourly wage, a separately agreed wage or an additional "overtime surcharge".

Pay for overtime through free time

Another way to compensate for unpaid overtime is to compensate with free time. For example, employees can forego paying overtime and in return either take the overtime as additional vacation or reduce overtime by leaving the workplace earlier on certain days.

Deadlines for overtime compensation through free time

If there is time compensation for overtime, then the additional vacation must be taken within 6 months.

For example, if you worked ten hours a day on five days in January instead of eight hours a day, then it must be guaranteed by July at the latest that you only work six hours a day on certain five days instead of the regular eight hours a day. Alternatively, the free hours can be spread over three instead of five days or you can get a whole day off. Compensation for overtime through leisure time must be coordinated by the employer and employee and agreed separately. In any case, the overtime must be compensated within six months so that the statutory entitlement is maintained.

How Much Overtime Pay?

The number of overtime hours that must be paid depends either on the contract or on the hours actually worked. If, for example, a certain number of "unpaid overtime" is specified in the contract, then this overtime will not be compensated. For example, the contract can contain a provision according to which two overtime hours per month are compensated for with wages. These first two hours of overtime are therefore considered unpaid overtime. All overtime that is worked beyond that must then be remunerated either in accordance with the statutory regulations or in accordance with the specifications of the contract. In addition, employers and employees can also agree that only a certain part of the overtime is paid out and a further part is to be paid as free time. In this way, the payout can be throttled while the vacation entitlement increases.

Overtime not paid - contract not allowed

The clause that overtime is compensated for with the regular monthly wage and therefore does not have to be paid out is only valid if the number of expected overtime is precisely defined. A clause stating that overtime is generally not remunerated is not permitted.

A contract that stipulates that overtime up to the maximum legal working time is compensated for with normal wages is also ineffective.

Calculate pay overtime - statutory regulation

If payment for overtime has not been agreed in the joint employment contract, then the German Civil Code provides that the usual remuneration for overtime is also to be regarded as agreed. This means that for overtime in this case the regular hourly rate, which is paid out with your salary, applies. In addition, when calculating overtime, it is important to determine whether there is a surcharge for overtime in addition to the normal hourly rate. For example, working at night or on Sundays and public holidays may incur a regular surcharge, which must also be taken into account as an “overtime surcharge” for overtime.

Overtime Surcharge - Who is Eligible?

The surcharge for overtime only applies if surcharges for normal work under certain conditions, such as night work or work on Sundays and public holidays, have been agreed in the employment contract or collective agreement. In most cases, the surcharge for overtime is between 15 and 40 percent of the normal hourly rate.

How many hours of overtime are allowed? - How are working hours regulated by law?

  • How long are the statutory working hours?
    Regardless of how many working hours are recorded in the employment contract, the legislator has limited the daily working time to eight hours on working days in the Working Hours Act § 3 ArbZG.
  • How many hours of overtime are allowed?
    The daily working time can also be extended to up to ten hours if at the same time the average working time of eight hours is not exceeded within six months.
  • How many working hours per week are specified?
    At the same time, the working time per week may not exceed 48 hours. The work assignment comprises a maximum of 48 weeks per year. A vacation entitlement exists for four weeks. The maximum working time per year is 2,304 hours.

Calculation of overtime pay

An employee works regularly 35 hours a week. His gross salary is 2,380 euros per month. The gross wage is therefore 17 euros per hour. In a particularly busy month, he worked a total of 10 hours of overtime. For the overtime he has worked, he receives a total of 170 euros gross.

High number of overtime hours - distribute overtime payouts

If in certain cases a lot of overtime has accrued, then it is worth considering whether the payout can be spread over a longer period of time. A distribution over several months, however, is irrelevant if the payment is made within a year. If the payout is very high, it can be tax-wise to spread the sum over two years. In this way, the respective annual wage can be kept within a more favorable tax rate even with a very high number of overtime hours worked.

Who is not entitled to overtime pay?

Those who earn above average are not entitled to compensation for overtime. In the case of high salaries, an above-average amount of work is generally required. Because executives or higher employees are paid according to their task and not according to the hours to be worked. An above-average salary is an income above the income threshold of 78,000 euros per year in western Germany and 69,600 euros per year in eastern Germany.

Do not fail to pay overtime - limitation period of three years

Employers and employees have three years to pay for overtime. After three years at the latest, all overtime expires and the entitlement expires.

It is not always up to the employer if the payment is delayed. In companies that give employees the freedom to choose whether they want to make use of payout or time off, many beneficiaries often take time to keep both options open. However, due to the limitation period, they must have chosen and used one of the two options within a maximum of three years.

Overtime and the tax return

Employees also have to pay taxes for overtime worked. Because overtime counts in terms of tax law as part of the wages paid. In addition to taxes, there are also social security contributions for overtime paid. As a result, there is often not much left of paying overtime after taxes and social security contributions.

You should therefore carefully weigh up whether it is worthwhile for you to request payment for overtime or to take up time off.

One way to save taxes when paying overtime is the so-called lifetime working time account. This is invested by the employer in order to pay in money for the employee's pension. This can also be used to pay overtime without taxes and duties being incurred on the payment. Taxation is only due upon payment. However, the payment can be made on a monthly basis and in an amount that is more favorable for tax purposes than the taxation of paid overtime.