Overtime occurs in almost every Swiss company. The question is simply: When is it paid out, how much surcharge are you entitled to, and what happens if the employer does not pay? This guide explains overtime payout in Switzerland for employees and freelancers — with concrete CHF examples, legal bases, and practical tips.

Swiss labour law clearly regulates how overtime must be compensated. Nevertheless, uncertainties arise again and again: What is the difference between overtime and Überzeit (statutory overtime beyond the legal maximum working hours)? When may the employer compensate the surcharge within the basic salary? And what to do upon termination? Here you find the answers.

Key Takeaways:

• Overtime surcharge: 25% on the basic salary — at CHF 40.00/h that is CHF 50.00 per overtime hour
• Überzeit (above 45/50h per week) must be compensated with a 25% surcharge or time off
• Compensation within the basic salary only for managerial/specialist roles — must be agreed in the contract
• On termination: non-taken overtime must be paid out immediately, written hour records required
• Freelancers: show overtime surcharge on the invoice, 8.1% MWST (Swiss VAT at 8.1%) on the total amount

Overtime vs. Überzeit — the most important distinction

Many confuse the two terms, but they describe different legal situations. The Swiss Labour Act (ArG, Arbeitsgesetz) clearly distinguishes between overtime and Überzeit (statutory overtime beyond the legal maximum working hours) — see the current version on admin.ch.

Overtime is the exceeding of the contractually agreed working time. If your contract provides for 40 hours per week and you work 42, you have 2 overtime hours. These must be compensated — by payout with a surcharge or time off in lieu.

Überzeit is the exceeding of the statutory maximum working time. The ArG stipulates in Article 9: 45 hours per week for industry, offices, technical staff, and sales personnel, 50 hours for all other establishments. Overtime hours beyond the statutory maximum working time are Überzeit — and these are more strictly regulated.

The legal bases can be found in ArG Art. 9 (maximum working hours), ArG Art. 10 (Überzeit), and ArG Art. 13 (compensation). The essential difference: overtime can be contractually compensated in advance, whereas for Überzeit this is only possible to a very limited extent. Further details can be found in the working time overview on ch.ch.

For a detailed explanation of working time rules in Switzerland, see our article on Working Time Rules.

A common misconception: Many employees believe overtime automatically equals Überzeit. That is not correct. If your contract provides for 38 hours per week and you work 44, you have 6 overtime hours — but no Überzeit, as long as you stay below the statutory maximum of 45 hours. Überzeit only arises when you work more than 45 (or 50) hours per week. This distinction affects the compensation obligation: Überzeit must be compensated with a 25% surcharge or time off, while for overtime a contractual compensation within the basic salary is possible.

A word on exceptions: Certain sectors have deviating rules. In the construction industry, hospitality, and healthcare, special working time ordinances sometimes apply that modify maximum working hours and overtime rules. Always check whether a special ordinance applies to your sector.

How overtime is calculated and paid out

The standard surcharge for overtime is 25% on the basic salary. This is regulated in ArG Art. 13 and basically applies to all employees, unless otherwise agreed.

The formula is:

Hourly rate × number of overtime hours × 1.25 = payout amount

Example: You earn CHF 40.00 per hour and have accumulated 10 overtime hours. The calculation:

10 × CHF 40.00 × 1.25 = CHF 500.00

That means: Each overtime hour is paid out at CHF 50.00 instead of CHF 40.00. The surcharge of CHF 10.00 per hour is the statutory minimum entitlement.

The alternative to payout is time compensation — i.e. time off in lieu. There are two variants:

• 1:1 compensation: 1 hour overtime = 1 hour time off
• 1:1.25 compensation: 1 hour overtime = 1.25 hours time off (i.e. 1 hour 15 minutes)

Which variant applies depends on the contractual arrangement. Without an explicit agreement, the 1:1 compensation usually applies, unless the employer ordered the overtime — in that case you are entitled to the 25% surcharge.

Important: The employer can require that overtime be compensated in time off rather than in money. This decision lies with the employer, provided the employment contract contains no other arrangement.

The SECO FAQ on overtime offers a good overview of the most common questions around calculation and payout.

In practical terms: If you earn CHF 6,800.00 per month and work 40 hours per week, your hourly rate is calculated as follows: CHF 6,800.00 ÷ (40 × 4.33) = approx. CHF 39.26 per hour. With 8 overtime hours in a month, that would be 8 × CHF 39.26 × 1.25 = CHF 392.60 additional on your payslip.

Pay attention to the payslip: overtime surcharges must be shown separately. If you only see a flat rate without a breakdown, ask. A correct payslip shows basic salary, surcharges, and deductions separately. This also helps with your tax return — the ESTV (Swiss Federal Tax Administration) requires a clean separation of salary components.

If the employer does not pay out the overtime in the current month but credits it to an hour account, this must be documented transparently. You have the right to inspect the current status of your hour account. Have the status confirmed regularly — in writing or by email.

Time compensation or payout — which is better?

The decision between time off and money has not only practical but also tax consequences.

Advantages of payout:

• Immediate liquidity — you have the money in your account
• No risk of expiring overtime hours
• Well suited if you need more income in the short term

Disadvantages of payout:

• Taxable as regular salary — the ESTV taxes the full amount
• With many overtime hours the marginal tax rate may rise
• Social contributions (AHV, i.e. Swiss social insurance, etc.) apply to the full amount

Advantages of time compensation:

• Tax-neutral — no additional taxes
• More time off, better for work-life balance
• No social contributions on time

Disadvantages of time compensation:

• Overtime can expire (often after 12 months, contractually regulated)
• No immediate liquidity
• Risk that time off cannot be taken

Short story: Markus, electrician from Bern

Markus works as an electrician and earns CHF 45.00 per hour. In a busy week he works 10 overtime hours. His calculation:

10 × CHF 45.00 × 1.25 = CHF 562.50

Markus deliberates: payout or time off? Since he already faces a high tax burden at year-end, he opts for time compensation. He takes the 12.5 hours (10 × 1.25) as time off and saves himself the tax burden. For him the time off is worth more than the CHF 562.50 net he would have kept after taxes and contributions.

When the employer may compensate the surcharge within the basic salary

Not every employee automatically receives the 25% surcharge. The ArG allows exceptions — but only under strict conditions.

The employer may compensate overtime within the basic salary if:

• The person concerned holds a managerial position
• It concerns highly qualified specialists
• The person has essential decision-making authority
• The salary is clearly above average (often a rule of thumb: at least 20% above comparable positions)

The compensation must be agreed in writing in the employment contract. An oral arrangement is not sufficient. The clause must clearly state that overtime is included in the basic salary.

Short story: Claudia, marketing manager from Zurich

Claudia earns CHF 8,500.00 per month as a marketing manager. Her contract contains a clause: "Overtime is compensated within the salary." During the year she works around 200 overtime hours.

If she recalculates: With 200 hours and a theoretical hourly rate of approx. CHF 53.00 (CHF 8,500.00 ÷ 160 hours/month), that would be 200 × CHF 53.00 × 1.25 = CHF 13,250.00 — money she would have received additionally with full overtime surcharge.

Is the clause valid? Probably yes. Claudia is a manager, earns clearly above the Swiss median, and has decision-making authority. The clause in the contract is clearly formulated. Nevertheless, it is worth having such clauses reviewed by a specialist lawyer for employment law — sometimes the conditions are not cleanly met.

Important: OR Art. 321 (Swiss Code of Obligations) regulates the salary claim in case of absence. This provision is relevant when overtime is discussed in case of illness or other grounds of absence.

Overtime on termination — what are you entitled to?

When you leave the company, non-taken overtime must be paid out. This is clearly regulated, but in practice disputes often arise.

What you need to know:

• Non-compensated overtime is immediately payable on departure
• The 25% surcharge also applies to the final settlement
• The employer must pay out the hours if they are documented
• Forfeiture clauses may apply — but usually only for overtime older than 12 months

The critical point: the hour records.

Without written proof it becomes difficult. Anyone who has not documented their overtime must often assume that the employer will not recognise the hours. Therefore, always keep an hour record — ideally weekly, at least monthly.

Short story: Thomas, carpenter from Lucerne

Thomas leaves his company after 5 years. He has accumulated 48 unpaid overtime hours. His hourly rate is CHF 38.00.

Calculation: 48 × CHF 38.00 × 1.25 = CHF 2,280.00

Thomas documented his hours in a notebook — but only handwritten, without his supervisor's signature. The employer disputes the hours. Thomas must prove that he actually worked 48 hours more than contractually agreed.

Fortunately, Thomas had witnesses from the team who could confirm his statements. After a written reminder and the threat of involving the cantonal labour office, the employer agreed to pay out the CHF 2,280.00.

The lesson: Document your overtime with date, time, and signature. Best digitally, with a tool or app. This saves a lot of dispute on termination.

Another tip on deadlines: When you leave, demand the payout of overtime in writing in the final settlement. Do not wait — the longer you hesitate, the harder enforcement becomes. Set a clear deadline of 14 days. If the employer does not respond, involve the cantonal labour office. Often the mere threat is enough to reach an agreement.

For freelancers who are in dispute with clients over unpaid invoices, a look at our guide to debt collection in Switzerland is worthwhile.

For freelancers: showing overtime on the invoice

Freelancers and self-employed persons have no overtime in legal terms — you are your own employer. But you can certainly calculate surcharges if an assignment takes more time than agreed.

How to show overtime surcharges on the invoice:

1. Show the position separately: "Overtime surcharge 25%" as its own invoice line
2. Transparent hourly rate: list basic rate and surcharge clearly
3. MWST on the full amount: 8.1% MWST (Swiss VAT) on basic salary and surcharge

Example invoice for a freelancer:

The surcharge of CHF 30.00 corresponds to 25% of the basic rate (CHF 120.00 × 0.25). The MWST of 8.1% applies to the total amount — including the surcharge.

QR-bill obligation: Since 2020 the QR-Rechnung (QR-bill) is mandatory in Switzerland. This also applies to invoices with an overtime surcharge. Make sure the payment part contains all mandatory fields: IBAN (QR-IBAN), amount, currency (CHF), recipient address, and reference number.

If you create your invoices with Magic Heidi, the QR-bill is generated automatically — including all surcharges and correct MWST calculation. This saves time and errors.

Further information on MWST accounting for freelancers can be found in our article on MWST accounting. And if you are thinking about founding an Einzelfirma (sole proprietorship), we have a separate guide for that.

A tip: Clarify in advance with the client whether and how overtime is compensated. Best recorded in a work contract. This prevents later discussions.

What is legally important: If you calculate overtime surcharges as a freelancer, you must announce this clearly in the quote or contract. A retrospective surcharge calculation without prior agreement can be rejected by the client — and you are left with the effort. Formulate in the quote: "Additional hours beyond the agreed scope are calculated with a 25% surcharge on the hourly rate."

Another practical point: If you found your own business (Einzelfirma, sole proprietorship) and plan overtime surcharges as a source of income, you must record them cleanly as revenue in your accounting. MWST liability applies from a revenue of CHF 100,000.00 per year — including surcharges. Calculate in advance whether you reach the threshold.

What to do if the employer does not pay?

It happens more often than you think: overtime has been worked and documented, but the employer does not pay. Here is the best way to proceed, step by step.

Step 1: Written reminder with hour records

Write a written reminder to your employer. List all overtime hours — with date, number of hours, and calculated amount incl. 25% surcharge. Set a deadline (usually 14 days).

Step 2: Conversation with your supervisor

Sometimes it is a misunderstanding. Speak with your direct supervisor or the HR department. Present your hour records and ask for clarification.

Step 3: Involve the cantonal labour office

If the reminder remains unsuccessful, contact the cantonal labour office. The labour office can mediate and in many cases bring about an agreement. The services are usually free of charge.

Step 4: Debt collection

As a last resort, debt collection remains. You file a collection request with the debt collection office. The employer can raise a legal objection — then it becomes a legal matter. In this case, a lawyer is advisable.

A detailed guide to debt collection in Switzerland can be found in our article on debt collection Switzerland.

Important: Keep all documents — hour records, reminders, employer responses. The better documented, the easier the enforcement.

A final note on limitation periods: overtime claims expire after five years (Art. 128 OR, Swiss Code of Obligations). This means you have five years to claim outstanding overtime. After that the claim is time-barred — unless you can prove an interruption of the limitation period (e.g. by a reminder). So do not wait too long.

If the employer has become insolvent, in some cases the insolvency salary claim applies. This is a special rule that protects employees in case of employer insolvency. The deadline for this is 60 days from the opening of bankruptcy proceedings. Do not hesitate to seek legal help if you are unsure.

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