Overtime pay in Europe

Overtime pay is a crucial aspect of the employment landscape, serving as a means to compensate employees for their additional work hours. Throughout Europe, different countries have distinct trends and practices regarding overtime compensation. This article explores the general trends and various types of overtime pay prevalent in European countries, providing valuable insights for both employers and employees.

Overtime Pay Trends in Europe

Across Europe, there is a growing emphasis on work-life balance and fair compensation for employees’ extra efforts. Many countries have legislation or collective agreements in place to govern overtime pay, ensuring that employees are rewarded for their additional work hours. 

Moreover, the concept of flexible work arrangements, such as remote work or compressed workweeks, is gaining popularity and influencing overtime practices. In some countries, such as Romania, overtime hours are forbidden for workers under 18, part-time workers, and pregnant employees.

Each country has its common practices. The articles of the collection “Taxes and payrolls” of our blog explain the specific situation of each country regarding overtime hours, sick leaves, minimum wages, income taxes, etc.

Which country offers a higher overtime pay rate?

As we can see, the most common practice in overtime pay is to offer from 150% to 200% of the pay rate, depending on the situation.

The countries with the highest overtime pay rate are Belarus, Latvia, and Ukraine. These countries offer a 200% pay rate for any hour worked above the established working hours.

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Different practices

Fixed Overtime Pay: 

In some European countries, this is the prevailing practice. Under this system, employees receive a predetermined additional payment for each hour worked beyond their regular hours. This fixed amount, often expressed as a percentage of the normal hourly wage, is agreed upon through collective bargaining agreements or employment contracts. It usually ranges from 110% to 200%. Germany and Spain are examples of countries that adopt this approach.

This fixed rate can change depending on the day the overtime is happening. For example, in Bulgaria, the overtime pay rate is:

• 150% on regular days.
• 175% on the weekends.
• 200% on public holidays.

Usually, it also increases when overtime hours are performed at night. Some countries have very specific regulations on that. Such as Sweden, which follows these particular rules:

• For overtime worked on weekdays before 8 p.m., hours are compensated at the monthly salary divided by 94 for each additional hour of work. 
• For hours worked after 8 p.m. or on weekends, hours are compensated at the monthly salary rate divided by 72 for each additional hour worked.

Time Off in Lieu: 

Also known as compensatory time, it is an alternative form of overtime compensation. Instead of providing monetary compensation, employers grant employees additional time off, equivalent to the hours worked beyond their regular schedule. This allows employees to enjoy a better work-life balance by taking time off at a later date. The United Kingdom and the Netherlands often utilize time off in lieu as a method of compensating overtime.

In Austria, the time off in lieu can correspond to 1.5x the hours worked overtime.

Variable Overtime Pay: 

Certain European countries employ a variable system, where the rate of compensation increases progressively as the number of extra hours worked accumulates. For example, the first few hours may receive a lower percentage increase, while subsequent hours attract higher rates. This approach aims to incentivize employers to limit overtime. Greece and Moldova are countries that commonly employ variable overtime pay systems.

In France, overtime is compensated at 125% for the first 8 hours and at 150% from there. 

In Portugal, the limit is lower. The overtime pay rate increases from 125% to 137.5% after the first hour. Moreover, after the first 100 hours of overtime in a year, the rates increase to 150% in the first hour and 175% after that.

Conclusion

Overtime pay practices across European countries reflect the diverse cultural and legislative landscapes. As an employer or employee, understanding the prevailing practices in a specific country is crucial for compliance and ensuring fair compensation. By embracing transparent and equitable overtime pay systems, employers can foster a positive work environment, enhance employee satisfaction, and ultimately drive productivity.

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