Difference between working 100% vs. 80% + overtime @25% bonus

1

Hi community

I am working 100% currently. I just got confronted with the possibility of on paper work 80%, and work the remaining 20% “overtime” which has a 25% payout rate.

The big question is: is it worth it, considering all circumstances? By how much?

The corerstones for my consideration are (all yearly numbers):

  • The 80% scenario raises my gross pay by 5k due to 25% overtime bonus.
  • It reduces Pension Fund contibutions of my employer by 1.8k
  • The added 5k salary will add 1.6k in taxes, and 300 CHF in AHV /IV
  • allowance reduced by CHF 240
  • so accounting for salary, income tax, AHV/IV and employer PF contributions, I gain 1k

Would you think of any other implications?

  • since the advantage decreases to just 1k, I might need to take into consideration more even smaller contributions
  • does it make a difference with AHV whether i work 100 or 80%? I just saw the number pops up on the yearly salary statement
  • I formally accumulate 25/12 ~= 2 days of vacation every month on 100%, while only 80% of that on the 80% scenario
  • …?

Thanks for any thoughts :slight_smile:

2

Depends a bit on how far away from retirement you are.

The 1.8k pension constribution probabaly only gets you the standard 1% interest.

You now have the ability to invest that yourself and get some decent return. But matters more, the more far out your retirement is.

Also I would question a bit on why your employer does this? What if the overpay is cut in the future?

On 80% you then have 5 less holidays?

That‘s worth quite a bit…

E: dumb question: is this monthly or yearly? I guess monthly

If monthly 1k more that‘s quite a bit, if yearly, dont bother.

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3

When I switched from 100% to 90% it was to have more effective vacation days than the standard 25.

I wouldn’t consider switching from 25 to 20 for a second, especially if they’re only corresponding to a bottom line difference of CHF 200 each.

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4

Do they expect you to work 100% or 80% and only if there is enough work 100%.
Honestly seems shady for me, except if:
-the actual workload is something between 80-110% with variations over time (big project to be finished = lot of work and the relax for a few weeks afterwards).
-and you actually want to reduce your workload.

I did something similar, but without 25% work bonus. Basically I was employed 90% but my workload was flexible as my projects - then it was a win-win for me and the company

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5

One consideration that I didn’t know about before I started working part time is the “Koordinationsabzug” in die 2. Pillar. Working 80% decreases your insured salary (unless your employer specifies that it all of your salary is insured = no Koordinationsabzug), which can potentially decrease any pension in case of invalidity or pension for you partner and children in case of death.

Not saying you shouldn’t do it, just keep it in mind. I have insisted on my insured salary to be my total salary when I started at 60%.

Was ist der Koordinationsabzug der Pensionskasse? | Pax

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6

thanks for the already good replies.

just in defence of my employer, there is nothing shady going on: I am in consulting, currently on a 80% work contract. however since half a year I kept myself chargeable 100%. This most likely continues like this.
For April 1st I can change my contract back to 100%. So I try to assess whether I should do it^^

Reflecting on the vacation days, this is actually a weak point of my calculation. I am not perfectly sure on how this calculates, which could mean an error in my estimates

If I naively discount the 5 additional vacation days, that is certainly more than the 1k in net gain. hmmm need to get my modeling straight…

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7

Also bonus/RSU if applicable might be higher at 100%.

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8

oh yes, certainly…
thanks for the hint. this is of course volatile but could easily negate the remaining 1k difference

9

(Some) Tax deductions reduce to 80% of the usual values (for example Lunch deduction only 4x a week).
If you become unemployed, the 80% salary becomes the basis for the calculation of your unemployment benefits.

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10

Typically it’s the same, but every day accounts for a 6.4h workday instead of 8h, as an example.

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11

I work 60%. I have 5 weeks, but since at 60% I work only 3 days a week I have 15 days instead of 25 days of holidays.

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12

I like to convert everything into hours in order to make comparisons. I’m mostly after the total number of hours I’m working in a year and the hourly rate of compensation for that. You can go further and deduct taxes to make it more fair on a take home basis.

For my own understanding, I then convert it back to days using the expected amount of hours I’m working in a day to let me better visualize how many days off I can expect during the year and if that fits my life plans.