A public holiday supplement is additional pay on top of the regular hourly wage for work performed on statutory public holidays. One important point: there is no statutory entitlement to such a supplement – German employment law only requires employers to grant compensatory time off. An entitlement to a public holiday supplement arises solely from a collective bargaining agreement, a works agreement, or an individual employment contract. From a tax perspective, public holiday supplements may be exempt from income tax up to certain limits under § 3b of the German Income Tax Act (EStG).
What Is a Public Holiday Supplement?
A public holiday supplement is an additional payment made to employees who actually work on a statutory public holiday. It is added on top of the regular hourly wage and is intended to compensate for the particular burden of working on public holidays.
Public Holiday Supplement vs. Public Holiday Pay – the Difference
These two terms are frequently confused, but they refer to distinct entitlements:
Public holiday pay refers to continued remuneration on public holidays when employees are not required to work. This is governed by law: under § 2 of the Continued Remuneration Act (Entgeltfortzahlungsgesetz, EFZG), employees are entitled to their regular pay even if a public holiday falls on a working day.
Public holiday supplement, by contrast, only applies when an employee actually works on the public holiday. This supplement is not a statutory right – it is an additional payment that must be agreed upon contractually.
Legal Framework: What Does the Working Hours Act (ArbZG) Say?
Prohibition of Work on Public Holidays and Exceptions (§ 9, § 11 ArbZG)
The Working Hours Act (Arbeitszeitgesetz, ArbZG) generally prohibits the employment of workers on Sundays and statutory public holidays under § 9. This prohibition applies from midnight to midnight (0:00 to 24:00).
§ 11 ArbZG provides for exceptions: in certain industries and for specific activities, work on public holidays is permitted – for example in healthcare, hospitality, transport, retail, and agriculture. The competent authorities may approve further exceptions.
Compensatory Rest Day Instead of a Supplement – What Applies Without a Collective Agreement?
Employees who work on a statutory public holiday are entitled to a compensatory rest day under § 11 para. 3 ArbZG. This must be granted within eight weeks. That is the only legally mandated form of compensation – not a financial supplement.
The law does not require any additional pay. Employers who wish or are obliged to pay public holiday supplements do so on the basis of contractual arrangements.
When Is There an Entitlement to a Public Holiday Supplement?
Entitlement Under a Collective Bargaining Agreement
The most common basis for a public holiday supplement entitlement is an applicable collective bargaining agreement (Tarifvertrag). Many industries – including retail, healthcare, the hotel and catering sector, and the metalworking industry – have set specific supplement rates for public holiday work in their collective agreements. These provisions are binding on all employers and employees covered by the agreement.
Contractual Entitlement
Even without a collective agreement, employers may include public holiday supplements in the employment contract. Once agreed in writing, this contractual commitment is binding.
Established Custom (Betriebliche Übung)
An entitlement can also arise through established custom: if a company pays public holiday supplements over several years without explicitly limiting this practice in time, employees may derive a permanent entitlement from this – even without a written agreement.
How High Is the Public Holiday Supplement? Calculation with Example
Typical Supplement Rates
Since there is no statutory rate, the amounts vary considerably depending on the collective agreement and the specific public holiday. Typical ranges are:
- Regular statutory public holidays: 25% to 100% of the basic wage
- Particularly protected public holidays (e.g. 1 May, 25 and 26 December, Good Friday, Easter Sunday): 100% to 150%
In industries with high collective bargaining coverage, such as retail or healthcare, supplements of 50% to 100% are common.
Step-by-Step Calculation Example
Starting point:
- Hourly wage (basic wage): €16 gross
- Hours worked on the public holiday: 8 hours
- Public holiday supplement per collective agreement: 100%
Calculation:
- Basic pay: €16 × 8 hours = €128
- Supplement amount: €16 × 100% × 8 hours = €128
- Total pay for the public holiday: €128 + €128 = €256
The supplement (€128) is treated as tax-exempt up to the statutory limits described below.
Tax Exemption for Public Holiday Supplements (§ 3b EStG)
Which Percentages Apply?
§ 3b of the Income Tax Act (Einkommensteuergesetz, EStG) provides that supplements for Sunday, public holiday, and night work are tax-exempt under certain conditions. For public holiday work, the following ceilings apply:
- Statutory public holidays: up to 125% of the basic wage is tax-exempt
- 25 December, 26 December, and 1 May: up to 150% of the basic wage is tax-exempt
The tax exemption applies only to the supplement itself, not to the basic wage.
What Is the Basic Wage? (Note the Cap)
Under § 3b EStG, the basic wage is the ongoing remuneration payable for normal working hours in the relevant pay period, expressed as an hourly rate. For the purposes of calculating the tax exemption, this basic wage is capped at a maximum of €50 per hour. If an employee earns more than €50 per hour, the tax exemption is calculated only on the basis of €50.
Example: For an employee earning €70 gross per hour, only the capped basic wage of €50 is used for the tax exemption calculation. The maximum tax-exempt supplement in this case is €50 × 125% = €62.50 per hour.
Combining with Night or Sunday Supplements
If employees work at night on a public holiday, both types of supplement may apply simultaneously. However, under tax law, § 3b para. 2 EStG provides that only the higher of the combined supplements is tax-exempt. The lower supplement is subject to normal taxation.
Under employment law, there is no statutory prohibition on combining supplements – but the combination must be contractually agreed.
Special Cases: Mini-Jobs, Part-Time, Night Work
Mini-jobs: § 3b EStG applies regardless of the type of employment. Marginally employed workers (geringfügig Beschäftigte) can also receive public holiday supplements and benefit from the tax exemption – provided the entitlement is established by collective agreement or employment contract.
Part-time employees: Part-time employees are equally entitled to a public holiday supplement when they actually work on a public holiday, subject to the same conditions. The calculation is based on their pro-rated hourly wage.
Night work on public holidays: Employees who work at night on a public holiday may simultaneously be entitled to both a night supplement and a public holiday supplement. As noted above: for tax purposes, only the higher supplement is exempt (§ 3b para. 2 EStG); under employment law, both supplements may be combined if the contract provides for this.
Frequently Asked Questions about Public Holiday Supplements
Is a public holiday supplement required by law in Germany?
No. The Working Hours Act does not require any supplement – only a compensatory rest day (§ 11 para. 3 ArbZG). An entitlement to a public holiday supplement arises only from a collective agreement, works agreement, or employment contract. Without such an arrangement, employees have no entitlement to additional pay.
How high is the public holiday supplement typically?
There is no statutory figure. Rates of 25% to 150% of the basic wage are common, depending on the collective agreement and the specific public holiday. Supplements are generally higher for particularly protected holidays such as 1 May or 25 December.
When is a public holiday supplement tax-exempt?
Under § 3b EStG, public holiday supplements are tax-exempt up to 125% of the basic wage (for regular statutory public holidays) or up to 150% (on 25 December, 26 December, and 1 May). The basic wage is capped at a maximum of €50 per hour for this calculation.
What is the difference between public holiday pay and a public holiday supplement?
Public holiday pay is the statutory continued remuneration for public holidays on which employees are not required to work (§ 2 EFZG). A public holiday supplement is an additional payment for work actually performed on a public holiday. The two are separate entitlements.
Does the public holiday supplement also apply to mini-job workers?
Yes, provided that an entitlement exists under a collective agreement or employment contract. The tax exemption under § 3b EStG also applies to marginally employed workers.
Can I receive both a night supplement and a public holiday supplement at the same time?
Under employment law, yes – if both are contractually agreed. Under tax law, only the higher of the two supplements is tax-exempt (§ 3b para. 2 EStG). The lower supplement is subject to normal taxation.
How do I calculate the public holiday supplement correctly?
Formula: Basic wage (€/hour) × supplement rate (%) = supplement amount per hour. Example: €16 × 100% = €16 supplement per hour. Total pay equals basic wage plus supplement. For tax exemption purposes, the basic wage is capped at €50 per hour.
Conclusion
A public holiday supplement is not a statutory entitlement – it arises from a collective bargaining agreement, a works agreement, or an employment contract. Employers operating in sectors where public holiday work is common should be familiar with the applicable collective agreements and ensure their payroll calculations are correct. The tax benefit under § 3b EStG represents a genuine financial advantage for both employers and employees.
For HR professionals, clear documentation of all public holiday shifts and regular checks on whether supplement rates comply with applicable collective agreements are strongly recommended. If there is any uncertainty about specific rules, consulting a specialist employment lawyer is advisable.
You can find more HR knowledge for people responsible for HR in the Aivy HR Lexicon.
Sources
- § 9 Working Hours Act (ArbZG) – Rest on Sundays and public holidays. Federal Ministry of Justice. https://www.gesetze-im-internet.de/arbzg/__9.html
- § 11 Working Hours Act (ArbZG) – Exceptions to Sunday and public holiday rest. Federal Ministry of Justice. https://www.gesetze-im-internet.de/arbzg/__11.html
- § 3b Income Tax Act (EStG) – Tax exemption for certain supplements. Federal Ministry of Justice. https://www.gesetze-im-internet.de/estg/__3b.html
- § 2 Continued Remuneration Act (EFZG) – Remuneration on public holidays. Federal Ministry of Justice. https://www.gesetze-im-internet.de/efzg/__2.html
- Federal Ministry of Labour and Social Affairs (BMAS): Statutory public holidays. https://www.bmas.de
- Federal Employment Agency: Information on special payments and supplements. https://www.arbeitsagentur.de
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