The Tough Choice: Money or Time?
Anyone who regularly works overtime sooner or later faces the question: get it paid out or rather take time off? Both paths have advantages and disadvantages — financially, in terms of tax, and with a view to one's own recovery. This article helps you make the right decision for your situation.
The financial part of the decision can be quantified precisely. With the <a href="/en/overtime-calculator">overtime calculator</a> you immediately see how much a payout including surcharge brings net — under current law and in the scenario of the planned tax reform.
Payout: Immediate Money, but with Deductions
With payout you receive your overtime as additional wages — usually including the surcharge. The big advantage: you get real money in your account, often with a top-up of 25 percent or more. The disadvantage: income tax and social contributions apply to the payout. Of an overtime gross of 250 euros, only around 110 to 130 euros remain net, depending on the tax rate.
This is exactly where the planned reform comes in: if surcharges became tax-free, the net amount of the payout would rise noticeably. The advantage equals the tax-free surcharge multiplied by your marginal tax rate.
Time Off in Lieu: Tax-Free, but Without Surcharge
With time off in lieu you convert overtime into free time. Since no money flows, neither taxes nor social contributions apply — one hour worked equals one hour off. However, with pure time compensation the surcharge is often not counted: ten overtime hours then become ten hours off, not twelve and a half. Whether the surcharge is converted into time depends on your agreement.
The real value of time off lies beyond money: recovery, work-life balance, lower burnout risk. Those already working at their limit often benefit more from free time than from a payout.
The Financial Comparison
Purely in numbers, payout with surcharge is attractive, especially if the planned tax exemption applies. But the comparison is incomplete if time off is measured only against the net amount: an hour of free time has, for many, a value beyond the bare hourly wage. To assess the financial side soundly, you should know the concrete net amount — the <a href="/en/overtime-calculator">overtime calculator</a> provides it for your personal case.
When Each Option Pays
In favour of payout: you need the money, your surcharge is high, and the planned tax exemption would additionally raise the net amount. In favour of time off: you are exhausted, want more time for family or hobbies, and your employer counts the surcharge into time compensation as well.
Conclusion
There is no universally correct answer. Payout brings money, time off brings recovery. Those who have the financial dimension clearly in view decide more deliberately. First calculate the net value of your overtime and weigh it against the personal value of free time.