Time off in lieu
Compensatory time off means that extra work performed is offset by paid release from work instead of payment. It requires an agreement; it does not follow from the law.
As of:September 2026
Who decides whether it is offset or paid out
Without a rule, an entitlement to pay arises, not an entitlement to time off. The employer has a unilateral right to decide only where the employment contract, a works agreement or a collective agreement provides for it.
Conversely, employees cannot force compensatory time off where nothing has been agreed. In practice most businesses set out a choice with time off taking precedence.
How it is converted
One day of compensatory time off corresponds to the average daily working time. At 40 weekly hours over five working days that is eight hours.
Any premium is usually not converted into time but paid separately, unless the agreement says otherwise. Anyone taking 10 hours of overtime with a 25 percent premium as time off therefore gets 10 hours off and 2.5 hours paid.
MetronHR works these figures out itself: time accounts, premiums, overtime and the limits of the German Working Hours Act, with every booking.
Not to be confused with leave
Compensatory time off is not leave. It does not satisfy the leave entitlement under the Federal Leave Act and cannot replace it. If somebody falls ill during a day of compensatory time off, the day is not automatically credited back; the rule in section 9 BUrlG applies only to leave.
Example: running down 20 hours of overtime
- Weekly working time 40 hours over five working days, so 8 hours a day.
- 20 hours of overtime ÷ 8 = 2.5 days of compensatory time off.
- Agreed premium of 25 percent: 5 hours are paid additionally.
- The balance in the time account falls by 20 hours.
Common mistake
A compensatory day off gets booked as a day of leave. That costs the business twice over, because the leave entitlement does not fall as a result, and it usually only surfaces on departure.
Further reading
- Section 3 ArbZG, section 9 BUrlG
- Section 87(1) nos. 2 and 3 BetrVG
This is not legal advice; for a specific case at your workplace you are better off asking someone qualified to give it.
Published by: AMNAU GmbH
Editorial responsibility: Ugur Aydogan, Product development.
Last reviewed: September 2026
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Related terms
Working time account
A working time account records how many hours somebody is above or below the agreed working time. The balance is settled over a defined period, through time off or through payment.
Time premium
A time premium is a supplement on the base wage for work at certain times or beyond regular working time. Apart from night work, there is no statutory entitlement to one.
Balancing period
The balancing period is the span over which the average of eight hours of daily working time has to be observed. It is six calendar months or 24 weeks.
Traffic light account
A traffic-light account is a working time account with graduated limits. As long as the balance is in the green range nothing happens; in the amber range duties to run it down apply, and in the red range no further extra work may arise.
Target hours
Target hours are the hours a person has to work contractually in a period. They are the comparison figure for the hours actually worked and therefore the basis of every time account.
Time credit
Time credit is the positive balance of a working time account: hours worked above the target time that have not yet been offset by time off or payment.
Additional hours
Extra work in the narrow sense is work beyond the statutory maximum working time. Overtime is work beyond the contractually agreed time. In everyday language the two terms get mixed up.