Time Tracking Is Coming: Here’s What You Can Do Today as an SME to Prepare
October 2026 - Starting in 2027, there may be a general requirement in our country to objectively track working hours. The exact rules haven’t been finalized yet, but as an SME business owner, you can already start reviewing existing agreements, time tracking systems, and administrative procedures.
No need to buy a time clock just yet
The introduction of a general working time tracking system is currently expected to take effect no earlier than January 1, 2027. By then, your company will need to have a system in place that allows you to track actual working hours in an objective and reliable manner. The specific details and any potential exceptions are still being worked out.
This does not necessarily mean that every employee will soon have to use a traditional time clock at the beginning and end of the workday. The method of recording hours may vary depending on the organization. For example, a system with clock-in and clock-out functions may be suitable for employees on fixed shifts, while a different method may be more appropriate for remote workers, office staff, or mobile employees.
The key question, therefore, is not which time clock you should install, but how you will be able to demonstrate when and how much work was performed.
First, look at the agreements behind the hours
For many SMEs, time tracking is currently organized in a relatively informal way. Employees sometimes start a little earlier, stay later during a busy period, or take some time off during a quieter time. Overtime and under-time hours are tracked in Excel, a software package, or even based on mutual agreements.
An upcoming regulatory requirement makes it even more important to formalize these practices. Consider questions such as:
When does working time begin?
How are breaks recorded?
When do we consider it overtime?
Who decides whether extra hours are worked?
How and when are those hours compensated?
What agreements apply to working from home?
How are plus and minus hours tracked?
These are primarily personnel issues, not software issues. A digital system can only function correctly once it is clear which rules it must apply.
Payroll administration is also becoming more detailed
A second development makes accurate record-keeping even more important. According to current plans, the new payroll data transfer within e-Gov 3.0 will become mandatory as of January 1, 2028. This will require payroll, working hours, and performance data to be available more quickly and in greater detail.
For employers, this means a shift from general hour counters to greater detail. It will become increasingly insufficient to simply know, for example, that an employee has a 12-hour surplus at the end of the month. The underlying information will also become important: on which days were those hours worked, and when were they taken as time off or made up?
This requires a record-keeping system in which work hours, absences, and time off are linked with sufficient precision.
A Good Time for an Internal Review
As an SME, you don’t need to make any final decisions about software or time-tracking equipment just yet. However, you can take a critical look at how your current systems are working. A useful first step involves asking questions such as these:
How do employees currently track the hours they’ve worked?
How are overtime, compensatory time off, and positive or negative hours tracked?
Do the work schedules align with the provisions in the employment regulations?
Are the rules regarding starting earlier and working longer clearly defined?
How is remote work tracked administratively?
In the event of an audit, can you demonstrate that the records match actual practice?
For companies with part-time employees, flexi-job workers, students, variable work schedules, or varying overtime arrangements, such an exercise is particularly relevant. Furthermore, there are already specific situations today in which recording requirements apply, for example, with certain types of flexible work schedules.
Define your policy first, then digitize
It can be very tempting to start looking for a time-tracking system right away. However, that isn’t necessarily the best first step. After all, as long as it isn’t clear how your company intends to handle working hours, flexibility, overtime, and time off, you won’t know what features a system needs to offer.
The coming months are therefore the ideal time to assess your company’s current work processes, identify bottlenecks, and clarify internal agreements. Major investments can then be aligned with the final regulations.
