How much is your working time worth

Calculating overtime made easy

When important deadlines are pending or a department is understaffed, overtime is common. If the employee does not make up for these hours with free time, they are usually paid out. Read here how to calculate overtime correctly.

Record working times with Personio and have overtime reported automatically.

Working Hours Act: How many overtime hours are allowed?

The Working Hours Act (ArbZG) gives theFramework conditions for the maximum permitted daily working hoursin front. Rest and break times, work on Sundays and public holidays as well as night shifts are clearly regulated. According to legal requirements, theworking day eight hoursdo not exceed. Working days are all calendar days that are not Sundays or public holidays, i.e. the days of the week from Monday to Saturday. A full-time employee is therefore allowed to work a maximum of 48 hours a week.

In the short term, the employer may significantly increase the volume of work if this is necessary due to the season or the job. Working hours that go beyond the working hours stipulated in the employment contract are referred to as overtime. But you shouldremain the exception. There is no legal obligation to work overtime, but there is also no fixed regulation for reducing it. Therefore, the agreement on the latter is always a matter between the employee and the employer.

Calculate overtime with a simple formula

Unless otherwise agreed between the employee and the employer, overtime payment is based on the monthly income. For employees who are paid on an hourly basis, every overtime is paid according to the usual gross hourly wage. If a fixed monthly remuneration has been agreed, the gross hourly wage must first be calculated.

The value can becalculate with a simple formula: The monthly gross salary is divided by the number of hours per month. The result is the exact hourly wage, which then only needs to be multiplied by the number of overtime worked. To calculate the exact number of hours per month, the number of hours per week is multiplied by 4.33.

An example:

Mr. Schmidt earns 3,000 euros gross per month. He actually works 40 hours under his contract, but has worked 10 hours overtime in the past month.

  • Monthly number of hours: 40 x 4.33 = 173.2
  • Hourly wages: 3000 / 173.2 = 17.32 euros
  • Overtime wages: 17.32 x 10 = 173.2 euros

You can still work at night, on Sunday or on public holidaysSurchargesto be added. The employee often receives around 25 percent more than his regular hourly wage. Overtime surcharges are usually regulated in the collective agreement or agreed individually.

Save time with arithmetic

Recording overtime in a program saves both the employer and the employee a lot of work. Using Personio's working time recording, all or selected employees can independently record their working times and, if necessary, collect them in the working time account. In addition, approval processes for working hours and overtime can be simplified and customized.

The time recording is linked to the payroll. Salaries can be calculated automatically on the basis of working hours, absences and hourly wages. It also makes it easier for you to calculate overtime. At the end, the amounts are transferred to the pay slip. Personio also offers the option of managing overtime if employees reduce it by taking time off. Calculating and managing overtime with software like Personio saves a lot of time in the company.