Turning overtime into time off or pension
Banked overtime has a habit of sitting untouched until the year end comes for it. Here is what komptid actually is, what an hour of it is worth, and why letting people route it to pension instead of a payout changes the arithmetic.
Banked overtime has a habit of sitting untouched until the year end comes for it. Here is what komptid actually is, what an hour of it is worth, and why letting people route it to pension instead of a payout changes the arithmetic.
Ask an HR team where the quiet friction sits and overtime comes up fast. Someone worked three long evenings in March. The hours went into a bank labelled komptid, and there they stayed. By November the employee cannot find a week to take them, the manager cannot spare a week to approve, and the turn of the year is coming for the balance either way.
The hours were real and the compensation is real. It is only the shape that is wrong.
What komptid actually is
Overtime in Sweden is compensated either in money or in time, and which one you get is set by your collective agreement or your employment contract. Taken as money it is övertidsersättning: salary, taxed as salary, carrying employer social fees like salary. Taken as time it becomes kompledighet, a balance of hours you draw down as leave later.
That second option is where balances quietly pile up, and it is worth being precise about one thing before going further. Komptid is not vacation. It carries no semestertillägg, it sits outside the 25-day floor semesterlagen guarantees, and what happens to an unused balance at the turn of the year comes from your agreement rather than from the law. The two get talked about interchangeably and they behave nothing alike.
One bank, several exits
The idea is small enough to say in a sentence: let people decide what their banked hours turn into.
- Time off. Draw the hours down as leave, exactly as today.
- Money. Paid out as the övertidsersättning it always was.
- Benefit allowance. The hours become budget in the same pot that pays for wellness, equipment, or whatever else the company offers.
- Pension. The value goes into an extra occupational pension contribution, and usually with a top-up on the way in. More on that below.
The first two already exist in every payroll system in the country. The last two are the interesting ones, because they change what the hours are worth rather than just when they are taken.
What an hour is worth
Start with the boring number. For a monthly-salaried employee the hourly rate for overtime is usually the monthly salary divided by a fixed divisor set in the agreement, commonly 175 for a 40-hour week. At 45 000 kr a month that is about 257 kr an hour, so a banked eight-hour day is worth roughly 2 057 kr.
The divisor is not universal. Agreements use 165, 172 and 175, and some price overtime at a multiple of the base rate depending on when it was worked. Every figure in this post assumes the simple case, and the real one comes out of your own agreement.
Thirty hours banked, on that basis, is a little over 7 700 kr. That is the sum sitting in the balance nobody has managed to spend.
Why the pension exit is the interesting one
Money that goes out as salary carries 31.42 % in employer social fees. Money that goes into occupational pension through a salary exchange carries särskild löneskatt at 24.26 % instead. The gap is 7.16 percentage points, and it does the same work on banked overtime that it does on ordinary salary: the same cost to the employer buys a bigger number in the employee's pension than in their bank account.
Most employers hand that gap on rather than keep it. Where company policy or the collective agreement says so, the amount going into the pension is topped up by about 7 %, so that the move stays cost neutral for the employer. In this example the 7 700 kr balance goes in as roughly 8 239 kr rather than 7 700 kr. That top-up is a policy decision and not a legal default, so check what your own agreement says before you promise anyone a number.
That is the whole argument for offering the exit. It is not a loophole and it is not clever. It is the ordinary treatment of pension contributions applied to a balance that, right now, most often expires or gets paid out at whatever moment suits payroll rather than the person.
The honest part
An idea like this lives or dies on its edge cases, so here are the ones that would decide whether it can be built at all.
- Your collective agreement decides first. Many agreements set out how overtime is compensated and whether a balance can be converted at all. If the agreement says time or money, it means time or money, and no amount of product design changes that. The same holds for the top-up on the pension exit: it applies where policy or the agreement says so, not by default.
- A payout is salary. Converting does not make tax disappear. It moves where the value lands and which rate applies to it.
- Salary exchange has known trade-offs. Reducing gross pay can reduce the basis for sjukpenning, föräldrapenning and the allmän pension for anyone below the income thresholds. It is a good deal above them and a poor one below, and that has to be shown to the employee at the moment they choose, not buried in a policy.
- The choice has to be informed and reversible until it is not. Once hours convert to a pension contribution they are gone as time off. That is fine if the person understood it, and a problem if they did not.
Where this stands today
This is a design idea, not a switch you can flip in CLVR Benefits today. We are writing it down because it keeps surfacing in the same conversations as the flexible benefits work, and because the mechanics deserve arguing about in public before anyone builds them.
The pattern underneath it is the one we keep coming back to: the value is already in the package, and the win is letting people shape it. That is the same argument as our worked example on flexible benefits, and a large part of why companies choose CLVR Benefits.
If your agreement already allows some of this, or explicitly forbids it, we would like to hear which.
The short version
- Overtime is compensated in money or in time, and your agreement decides which. Komptid is not vacation: no semestertillägg, no 25-day floor.
- The idea is one bank with several exits: time off, money, benefit allowance, or pension.
- At 45 000 kr a month and a 175 divisor, an hour is about 257 kr and a banked eight-hour day about 2 057 kr. Check your own divisor before quoting it.
- Pension is the exit that changes the arithmetic: 24.26 % särskild löneskatt instead of 31.42 % social fees, a 7.16 point gap. Where policy or the agreement says so, the amount going in is topped up by about 7 %.
- Salary exchange cuts the basis for sjukpenning and allmän pension below the income thresholds, so the trade-off belongs in front of the employee at the moment they choose.
- Not a feature today. A design idea we would rather argue about in the open.
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