Time off in lieu in Denmark: Rules and practice for employers

The agreement therefore decides how many hours of time off one overtime hour earns, who decides when it is taken and what happens to the balance when an employee leaves.

This guide provides general information, not legal advice. The examples from collective agreements apply only to businesses and employees covered by them. Always check your own agreement and seek professional advice if you are in doubt.

What is time off in lieu?

Time off in lieu is paid time off that the employee earns by working beyond their agreed working hours. Instead of receiving overtime pay on the payslip, the hours are added to a balance, which the employee later takes as time off.

Time off in lieu is closely linked to contracted hours and overtime. The difference between contracted, scheduled, recorded and approved hours is explained in the guide to contracted hours and overtime.

Where do the rules come from?

No Danish law sets overtime pay or time off in lieu for private-sector employees. DI (the Confederation of Danish Industry) explains that the rules follow from the collective agreement or from the contract and the staff handbook.

The rules can therefore come from:

• The collective agreement, if the business and the employee are covered by one.
• The employment contract, which can state whether additional hours are paid or taken as time off.
• A staff handbook or local agreement that applies to the employee.

The Danish Act on Employment Contracts (ansættelsesbevisloven) requires the employer to state in writing the normal working hours and any arrangements for overtime and payment for it, see Act no. 501 of 16 May 2023, section 3(2)(11). The information must be provided no later than 7 calendar days after employment starts. If the contract says nothing about overtime and the employee is not covered by a collective agreement, there is no statutory right to an overtime supplement or to time off in lieu.

How many hours of time off does one overtime hour earn?

It is a common misconception that time off in lieu is always given hour for hour. The ratio depends on the agreement.

In the retail agreement, the first 3 overtime hours carry a 50% supplement and the following hours 100%. Overtime on Sundays and public holidays and between 24:00 and 06:00 always carries 100%. In the café agreement (Caféoverenskomsten), the first 2 overtime hours carry a 50% supplement and the following hours 100%, and work after midnight or on days off always carries 100%.

Who decides when time off in lieu is taken?

In the collective agreements checked for this guide, the employer cannot order time off in lieu unilaterally:

• The retail agreement: Time off in lieu requires that the employee wants it and that the business accepts it. The timing is agreed, normally with 1 week's notice.
• The café agreement: It is agreed whether overtime is paid or taken as time off. The timing is agreed with regard to both the business and the employee.

Without a collective agreement, the contract or staff handbook decides who sets the timing. If it says nothing, the safest approach is to agree the timing with the employee and put the agreement in writing.

When must time off in lieu be taken?

The deadline for taking the time off also depends on the agreement:

• The retail agreement: Time off in lieu should, as far as possible, be given as whole or half days and be taken within 2 months of the overtime.
• The café agreement: The agreement sets no fixed deadline.

There is no general rule that untaken time off in lieu is automatically paid out after a particular deadline. If your agreement has no deadline, set an internal one, so the balance does not grow large and hard to plan around.

Sickness during planned time off in lieu

The retail agreement and the café agreement have almost the same rule: sickness prevents time off in lieu if the employee reports sick before normal working hours begin on the day of the time off. If several consecutive days of time off in lieu are planned, this also applies to the following days. The hours then remain on the balance.

There is no statutory rule on sickness during time off in lieu. Without a collective agreement, the contract decides what applies.

Time off in lieu on resignation and departure

Negative balance. In arbitration award FV2025-422 of 26.09.2025, an industrial arbitration tribunal (faglig voldgift) found that a negative time-off-in-lieu balance does not, as a starting point, lapse when the employee resigns or is dismissed on objectively justified grounds. The employee must then repay the hours, and this can, for example, be done by set-off against the final salary if the ordinary conditions for set-off are met. The case concerned a local agreement that expressly allowed negative time off in lieu, and drivers whose working hours had been reduced. The award did not address the situation after an unjustified dismissal.

Positive balance. The café agreement allows the employee to take accumulated time off before leaving. For other agreements, there is no general rule on payout or on set-off during a period of garden leave (fritstilling). Dansk Erhverv (the Danish Chamber of Commerce) writes about garden leave and extra holiday days that extra holiday days are not automatically treated as taken during garden leave, and the same caution is sensible for time off in lieu. If a balance is to be treated as taken during garden leave, agree it in writing.

Time off in lieu is not holiday

The Danish Holiday Act (ferieloven) does not mention time off in lieu, and as a main rule it cannot be departed from to the employee's detriment. Holiday has its own notice periods: 3 months for the main holiday and 1 month for other holiday, see the Holiday Act, section 9(2). Keep time off in lieu and holiday on separate balances, and do not use time-off-in-lieu hours as a substitute for holiday.

Limits that still apply

Time off in lieu does not change the rules that limit how much an employee may work:

• 48 hours on average: Weekly working time must not exceed 48 hours on average over 4 months, including overtime, see the Working Time Act, section 4. A collective agreement that gives at least the same protection can replace the rule.
• 11 hours of rest: As a main rule, the employee must have at least 11 consecutive hours of rest in every 24-hour period. Read more about the 11-hour rest rule.
• Weekly rest day: There must be a weekly rest day in every 7-day period.

A large time-off-in-lieu balance can be a sign that the schedule regularly comes close to the limits. The overview of Danish working-time rules brings the rules together.

Document the hours that earn time off in lieu

Since 1 July 2024, the employer must have an objective, reliable and accessible system that measures each employee's daily working time, see section 4 b of the Working Time Act. The requirement also applies where there is a collective agreement. The employee must have access to their own records, and they must be kept for 5 years. Read more about the Danish requirements for recording working time.

The purpose of the rule is to check rest and maximum working time. In practice, the same records are also your documentation of how much time off in lieu has been earned.

How to keep track of time off in lieu in practice

A time-off-in-lieu arrangement is easier to manage when everyone knows the rules in advance:

1. Write the rules down. Which hours earn time off in lieu, at what ratio, and who may add to or correct the balance?
2. Approve the hours first. Add time off in lieu only from approved hours, not from the scheduled shift.
3. Agree the timing. Let the employee request time off in lieu, and let the manager approve the timing with the notice the agreement requires.
4. Follow the balance. Both manager and employee should be able to see the current balance.
5. Settle the balance on departure. Review the balance when an employee resigns, and agree in writing how it will be taken.

In Monoplan, time off in lieu is a paid absence type that can be linked to a balance and also used for hours on part of a day. The manager adds to the balance with a reason based on the approved hours from the time clock, and the employee requests time off in lieu in the app, which the manager approves. See leave, absence and balances in Monoplan.

In short

• There is no law on time off in lieu for private-sector employees in Denmark. The collective agreement, contract or staff handbook decides the rules.
• Time off in lieu is not always 1:1. The retail agreement gives 1.5 or 2 hours per overtime hour.
• In the retail agreement and the café agreement, the timing is agreed. The employer cannot simply order it.
• A negative balance under an agreement that allows negative time off in lieu does not, as a starting point, lapse when the employee resigns or is dismissed on objectively justified grounds, and can, for example, be set off against the final salary.
• Keep time off in lieu and holiday separate, and document the hours with time recording.