The legal position: are holiday premiums mandatory?
The short answer is: no, there is no legal entitlement to extra pay for work on public holidays. The German Working Hours Act (Arbeitszeitgesetz, ArbZG) (Section 11 ArbZG) only requires that employees who work on a public holiday falling on a working day receive a replacement day of rest. It must be granted within eight weeks.
Holiday premiums cannot be combined with Sunday or Saturday premiums! In that case the holiday premium is the one that gets paid.
A financial entitlement to holiday premiums only arises through:
- Collective agreements: Many industries (e.g. construction, metalworking) have agreed fixed premiums.
- Employment contracts: Individual arrangements between you and your employees that are written into the employment contract.
- Works agreements: Works councils can also require holiday premiums.
- Established company practice (betriebliche Übung): If premiums have been paid for years without reservation, that can create a legal entitlement for the future.
A closer look: continued pay on public holidays
Under Section 2 of the German Continued Remuneration Act (Entgeltfortzahlungsgesetz, EFZG), employees are entitled to continued pay when work is cancelled because of a statutory public holiday. That means the employer must pay the wage the employee would have received had the work not been cancelled.
Conditions for the entitlement to continued pay on public holidays:
- Working hours fall on a public holiday: the employee would normally have worked that day and the work is cancelled only because of the holiday.
- Statutory public holiday: it must be a holiday recognised by federal or state law. Church holidays that are not recognised by law do not count.
Special cases:
- The holiday falls on a day off: if the holiday falls on a day the employee would not have worked anyway, there is no entitlement to continued pay.
- Work on a public holiday. If the employee has to work on a holiday, special rules apply to premiums and compensatory days off.
Who is allowed to work on public holidays at all?
Before you get to pay, you have to settle whether the work is permitted. As a rule, Section 9 ArbZG imposes a ban on employment from 00:00 to 24:00. There are, however, numerous exceptions for industries that perform an essential function for society:
- Emergency and rescue services
- Care staff in hospitals and care facilities
- Fire services
- Hospitality
- Water and energy supply
- Public transport operators
- News agencies and the press
- Agricultural businesses
- Site and plant security
What rules must be observed?
Within the occupational groups where work on public holidays is allowed, a few requirements still apply:
- If employees work on a public holiday that falls on a working day, a replacement day of rest must be granted within eight weeks. By (written) agreement this period can also be extended or replaced by other compensation.
- The applicable rules on rest periods and break times also apply on public holidays. That means: after at least 6 hours of working time, employees are entitled to a break of 30 minutes (after 9 hours it is 45 minutes). There must also be a rest period of at least 11 hours between the end of one shift and the start of the next.
The supervisory authorities are responsible for enforcing these rules.
In businesses with changing crews in particular, keeping track of these rest periods by hand is hard. With digital shift planning, public holidays and the rest periods that go with them are taken into account right at the planning stage – before anyone is accidentally scheduled wrongly.
How high are holiday premiums, and what is tax-free?
Even though there is no obligation to pay them, almost all employers use premiums as a motivator. The legislator supports this by making premiums free of tax and social security contributions up to certain limits.
Here is an overview of the tax-free maximum rates (based on the base wage):
| Occasion / day | Tax-free premium (up to) | Notes |
|---|---|---|
| Statutory public holidays | 125 % | Applies to most public holidays during the year. |
| Christmas Eve (24 December from 14:00) | 150 % | Particularly strong protection for Christmas Eve. |
| Christmas holidays (25 & 26 December) | 150 % | Applies to the whole day. |
| 1 May (Labour Day) | 150 % | The only non-religious public holiday at 150 %. |
| New Year's Eve (31 December from 14:00) | 125 % | Treated like an ordinary public holiday. |
| Easter & Whitsun | 50 % (Sunday) | Careful: Easter Sunday and Whit Sunday count as Sundays almost everywhere, not as public holidays! |
In 2025 the new government of CDU/CSU and SPD promised to pass a law on tax-free overtime premiums. It is possible that premiums could then become mandatory. That could also apply to premiums on public holidays.
The “€25 trap” in social security
A common payroll mistake: tax law and social security law do not agree here:
- Tax exemption: Applies up to a base wage of €50 per hour.
- Exemption from social security contributions: Applies only up to a base wage of €25 per hour.
That means: If an employee earns more than €25 per hour (base wage), the part of the premium relating to the amount above €25 is tax-free, but social security contributions have to be paid on it.
How is the holiday premium calculated?
Holiday premiums are usually calculated as a percentage added to the base wage. The basic formula is:
Holiday premium = hourly wage x premium percentage x hours worked
If you want to calculate the holiday premium from a fixed monthly salary, this is how you go about it:
Holiday premium = (monthly salary / monthly working hours)xpremium percentage x hours worked
Special case: mini-jobbers and part-time staff
The principle of equal treatment applies to mini-jobbers. If full-time staff receive premiums, marginally employed staff are usually entitled to them too. The big advantage: Tax-free premiums do not count towards the €603 limit (as of 2026). A mini-jobber can therefore legally earn considerably more than €603 through work on public holidays without losing that status.
What exceptions apply to work on public holidays?
As a rule, the requirements set out above always have to be observed. In a few exceptional cases, though, employers may order a departure from them: in emergencies and unusual cases that arise independently of the will of those affected and whose consequences cannot be dealt with in any other way. In particular, where raw materials or food would spoil or work results are at risk of being ruined, work may be done outside these requirements.
In addition, senior executives and chief physicians are allowed not to follow the statutory requirements of the ArbZG.
Practical tips: tracking and documentation
To keep the tax office from raising problems at the next audit, gapless documentation is mandatory. So you have to prove exactly:
- When was the work done (date/time)?
- Which public holiday was it?
- What was the base wage and how high was the premium calculated?
Even before you get to payroll, the clockin shift schedule helps you take public holidays into account automatically when planning assignments. After that, the clockin app takes over the tracking. The solution with clockin: Instead of laborious Excel sheets, you can store your own premium rules in the clockin app . The system recognises public holidays automatically, calculates the correct rates and produces a finished timesheet for accounting. That keeps you legally compliant with no extra effort.
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