2.5 Million Public Sector Workers Face a September Deadline: Cash or Extra Days Off
Published on 07/26/2026 at 21:51 | Redaktion boerse-global.de
Roughly 2.5 million employees across Germany’s federal and municipal governments must decide by September 1, 2026 whether to keep their full annual bonus or trade part of it for extra vacation days. The new option, introduced under the collective wage agreement for the public service (TVöD), lets workers swap a slice of their traditional Christmas bonus for more time off.
The trade-off follows a fixed formula: each additional free day costs 5.4 percent of an employee’s annual special payment. Taking the maximum of three extra days means forfeiting 16.2 percent of the bonus. The goal is to give staff more flexibility in shaping their own schedules.
Different rates for federal and municipal employees
The size of the bonus itself varies by employer. For federal workers in pay grades 1 through 8, the special payment will rise to 95 percent of the base rate, up from 90 percent. Municipal employees, by contrast, receive a flat rate of 85 percent.
Exceptions exist for certain institutions. Staff in municipal care homes, classified in pay groups S2 to S9, get 90 percent of the bonus. Hospitals also have their own carve-outs written into the tariff framework.
No formal application needed
Exercising the choice is straightforward. Workers simply send an informal email to their employer’s designated contact to lock in their decision for the coming year. No complex paperwork is required.
If an employee fails to use the extra days earned through the swap within the calendar year, the rules provide a safety net. Unused days are paid out by March 31 of the following year.
A permanent extra holiday from 2027
Beyond this one-off choice between cash and time, the TVöD agreement includes a longer-term change. Starting in 2027, all public sector employees will receive an additional vacation day automatically, regardless of how they decide on the bonus. That means the total leave entitlement will rise permanently, separate from any individual trade-off decisions made this year.
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