A time supplement (German: Zeitzuschlag) is a percentage surcharge on the base wage paid for work performed at unsociable hours – nights, Sundays and public holidays. For night work, §6 of the Working Hours Act (ArbZG) mandates an adequate form of compensation; for Sunday and public holiday work, collective agreements typically determine the rate. Up to certain ceilings, time supplements are tax-exempt under §3b of the Income Tax Act (EStG).
What Is a Time Supplement?
A time supplement (also referred to as a special-hours wage surcharge) is a percentage addition to the agreed gross hourly wage. Its purpose is to compensate employees for the particular strain caused by working at socially unfavourable times – such as at night, on Sundays or on statutory public holidays.
The term must be clearly distinguished from similar forms of remuneration:
- Overtime supplement: Applies to hours worked beyond the contractually agreed working time, regardless of the time of day.
- Shift allowance: A flat-rate payment for shift work in general – regardless of whether the shift falls during night hours or not.
A time supplement and a shift allowance can apply simultaneously within the same employment relationship.
Legal Framework
Night Work – §6 ArbZG and Federal Labour Court Case Law
For night work, employees have a statutory right to compensation. Under §6 (5) of the Working Hours Act, employers must grant night workers either an appropriate number of paid days off or an appropriate surcharge on their gross earnings. Night time is generally defined as the period between 11 p.m. and 6 a.m. (in bakeries: 10 p.m. to 5 a.m.).
The Federal Labour Court (Bundesarbeitsgericht, BAG) has clarified what "appropriate" means in practice: under its landmark ruling BAG 9 AZR 225/08, a surcharge of at least 25% of the gross hourly wage – or alternatively one hour of paid compensatory leave per hour of night work – is considered appropriate. Where particular hardship exists, for example due to regular night work without shift rotation, a higher surcharge may be required.
Sunday and Public Holiday Work – No General Statutory Obligation
There is no general statutory minimum time supplement for Sunday and public holiday work. The applicable rate is usually determined by a collective agreement or by individual employment contract terms. Without a collective agreement and without an express contractual provision, there is no automatic entitlement to a surcharge – the work performed is then remunerated at the standard base wage.
Important: The Working Hours Act permits Sunday and public holiday work only in specific industries and under defined conditions (§§ 9–13 ArbZG). However, permission to work on those days is a separate matter from the question of whether a surcharge is owed.
Tax Exemption under §3b EStG
Under certain conditions, time supplements are exempt from wage tax. §3b of the Income Tax Act specifies which surcharges may be paid tax-free – and up to which percentage ceiling, calculated on the basis of the relevant base wage. The conditions are that the surcharges are paid in addition to the base wage and are actually paid for Sunday, public holiday or night work. The tax-exempt base wage is capped at a maximum of €50 per hour (as of 2025).
How High Are Time Supplements? An Overview
The table below shows typical surcharge rates in practice, together with the tax-exempt upper limits under §3b EStG:
Note: The surcharges actually applicable in a given company may deviate from these indicative values depending on the applicable collective agreement or employment contract. The tax-exempt ceilings also only apply up to the base wage cap of €50 per hour.
Calculating a Time Supplement – Example
The calculation of a time supplement follows a straightforward formula:
Gross hourly wage × surcharge percentage = time supplement per hour
Night work example:
- Gross hourly wage: €15.00
- Night surcharge: 25%
- Time supplement per hour: €15.00 × 0.25 = €3.75
- Total earnings per night hour: €15.00 + €3.75 = €18.75 gross
Since the base wage (€15/hour) is below the €50/hour ceiling and the surcharge does not exceed the tax-exempt limit (25%), the €3.75 supplement is exempt from wage tax in this example – it remains, however, subject to social security contributions.
Sunday work example:
- Gross hourly wage: €15.00
- Sunday surcharge under collective agreement: 80%
- Time supplement per hour: €15.00 × 0.80 = €12.00
- Tax-exempt portion (max. 50%): €15.00 × 0.50 = €7.50
- Taxable portion: €12.00 − €7.50 = €4.50
Collective Agreement vs. No Collective Agreement
Which time supplement applies depends significantly on whether a collective agreement is in force.
With a collective agreement: Surcharge rates are binding under the agreement and apply directly to all employees covered by it. Many sectors – retail, healthcare, the metal and electrical industry, transport – have detailed provisions that go beyond the statutory minimums.
Without a collective agreement: Only the statutory minimum requirements apply:
- For night work: The entitlement to adequate compensation under §6 ArbZG continues to apply. The BAG case law serves as a reference point (at least 25% or one hour of compensatory leave per night hour).
- For Sunday and public holiday work: No statutory minimum surcharge – but a clear contractual provision is strongly recommended to avoid legal disputes.
HR practice tip: Written agreements on time supplements in the employment contract protect both parties. Where such provisions are absent, there is room for interpretation that, in the event of a dispute, may be decided against the employer.
Frequently Asked Questions About Time Supplements
What is a time supplement?
A time supplement is a percentage surcharge on the base wage for work performed at unsociable hours (nights, Sundays and public holidays). It differs from an overtime supplement, which applies to hours worked beyond the agreed working time, and from a shift allowance, which is a flat-rate payment for shift work in general.
Is a time supplement required by law?
For night work: yes. §6 ArbZG obligates employers to provide adequate compensation. The Federal Labour Court has recognised at least a 25% wage surcharge or one hour of compensatory leave per night hour as the minimum standard (BAG 9 AZR 225/08). For Sundays and public holidays, there is no general statutory minimum time supplement – this is governed by the collective agreement or employment contract.
How high are the statutory time supplements for night work?
The law itself does not specify a percentage. However, BAG case law sets 25% or one hour of compensatory leave per hour of night work as the lower threshold for adequate compensation. Collective agreement rates are commonly between 25% and 50%.
Are time supplements tax-exempt?
Yes, up to the limits of §3b EStG. Night work: up to 25% tax-exempt (midnight to 4 a.m.: up to 40%). Sunday work: up to 50%. Public holiday work: up to 125%, or up to 150% on certain public holidays. Condition: the base wage must not exceed €50 per hour. Time supplements generally remain subject to social security contributions regardless.
What applies if there is no collective agreement?
For night work, the statutory entitlement under §6 ArbZG continues to apply; BAG case law serves as the minimum benchmark. For Sunday and public holiday work, there is no automatic entitlement without a collective agreement or employment contract provision. HR professionals should address such cases explicitly in the employment contract.
How do I calculate a time supplement?
Formula: gross hourly wage × surcharge percentage = time supplement per hour. Example: €15 × 25% = €3.75 night surcharge per hour. The tax-exempt portion must be shown separately in the payroll records.
What is the difference between a time supplement and a shift allowance?
A time supplement applies to work actually performed at unsociable hours (e.g. every hour actually worked at night). A shift allowance is a flat-rate payment for shift work in general, regardless of the time of day at which the shift takes place. Both can coexist within the same employment relationship.
Conclusion
Time supplements are an important instrument in remuneration practice – and legally mandatory for night work. HR professionals should be familiar with the provisions of §6 ArbZG and the BAG minimum standards, establish clear contractual foundations and correctly reflect the tax-exempt limits under §3b EStG in payroll. In particular in sectors with regular shift and night work, a systematic review of existing arrangements is worthwhile – not least to avoid back-payment risks.
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Sources
- §3b Einkommensteuergesetz (EStG) – Tax exemption for Sunday, public holiday and night-work supplements. Federal Ministry of Justice, 2024. https://www.gesetze-im-internet.de/estg/__3b.html
- §6 Arbeitszeitgesetz (ArbZG) – Night work. Federal Ministry of Justice, 2024. https://www.gesetze-im-internet.de/arbzg/__6.html
- Federal Labour Court, judgment of 9 December 2010, ref. 9 AZR 225/08 – Adequacy of night-work supplements. Bundesarbeitsgericht, 2010. https://www.bundesarbeitsgericht.de
- Haufe Employment Law – Time supplements: principles and practice. Haufe editorial team, 2023. https://www.haufe.de/personal/haufe-personal-office-platin/zeitzuschlag
- Federal Ministry of Labour and Social Affairs – Night work and health protection. BMAS, 2023. https://www.bmas.de
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