How to Calculate End-of-CDD Indemnity in Payroll for 2025: A Comprehensive Guide

Introduction: End-of-CDD Indemnity, a Fundamental Right of Temporary Employees

The end-of-contract indemnity, commonly referred to as “prime de précarité” (precarity bonus), is an essential component of the remuneration for employees on a fixed-term contract (CDD). As provided by Article L.1243-8 of the French Labour Code, it aims to compensate for the precarious situation of the employee at the end of their contract. In 2025, the rules for calculating this indemnity, cases of exclusion, and its social regime remain governed by the Official Social Security Bulletin (BOSS, boss.gouv.fr) and the jurisprudence of the Cour de cassation.

This comprehensive guide is intended for payroll managers, HR directors, and HR managers. It covers the entire topic: calculation of the indemnity (base, rate), cases of exclusion, social and fiscal regime, renewal and succession of CDDs, early termination, and the specific case of the CDD with a defined purpose.

What is the End-of-CDD Indemnity?

Legal Basis

The end-of-contract indemnity is provided for in Articles L.1243-8 to L.1243-10 of the French Labour Code. It is due to the employee at the end of a CDD when the contractual relationship does not continue with a permanent contract (CDI). Its objective is to compensate for the job instability inherent in a CDD.

Mandatory Nature

Payment of this indemnity is mandatory. The employer cannot exempt itself from this obligation through a clause in the contract or a collective agreement (except in the case of a reduced rate of 6% provided by an extended branch agreement). Any contractual clause providing for the employee’s waiver of this indemnity is deemed invalid.

Calculation of the End-of-CDD Indemnity

Common Rate: 10%

The rate of the end-of-CDD indemnity is set at 10% of the total gross remuneration received by the employee during the contract duration, including renewals. This 10% rate constitutes the legal minimum.

Reduced Conventional Rate: 6%

An extended branch agreement may provide for a reduced rate of 6%, provided that the employee is offered counter-parties in terms of professional training (preferential access to training activities, skills assessment, etc.). In the absence of effective counter-parties, the rate of 10% applies as a matter of law.

Calculation Base

The calculation base for the end-of-CDD indemnity includes all gross remuneration received during the contract, namely:

• Base salary
• Bonuses (seniority, performance, targets, pro-rated 13th month, etc.)
• Benefits in kind (housing, vehicle, food, etc.)
• Overtime and additional hours
• Compensatory paid leave indemnity
• Various surcharges (night work, Sunday work, public holidays)

Note: The end-of-CDD indemnity itself is not included in its own calculation base. Similarly, reimbursements for professional expenses are excluded.

Example of Complete Calculation

An employee on a 6-month CDD has received the following gross remuneration:

• Base salary: 2,200 € × 6 = 13,200 €
• Performance bonus: 500 €
• Overtime: 1,800 €
• Benefit in kind for vehicle: 200 € × 6 = 1,200 €
• Compensatory paid leave indemnity: 1,670 €

Total gross remuneration: 13,200 + 500 + 1,800 + 1,200 + 1,670 = 18,370 €

End-of-CDD indemnity (10%): 18,370 × 10% = 1,837 €

End-of-CDD indemnity (6% if branch agreement): 18,370 × 6% = 1,102.20 €

Cases Excluding the End-of-CDD Indemnity

Offer of CDI by the Employer

The indemnity is not due when the employer offers the employee a CDI to occupy the same or a similar position, with remuneration at least equivalent, and the employee refuses this offer. It is essential for the employer to formalize this proposal in writing and keep proof of the employee’s refusal.

Seasonal CDD

Seasonal contracts (grape harvests, tourism, ski resorts, etc.) are excluded from the end-of-CDD indemnity, in accordance with Article L.1243-10 of the French Labour Code. However, a convention or collective agreement may provide for the payment of an indemnity in this case.

CDD of Use

CDDs of use (sectors listed by decree: hospitality-restoration, performing arts, audiovisual, education, professional sports, etc.) are excluded from the precarity indemnity if the applicable collective agreement explicitly stipulates it.

Aid-based Contracts

CDDs concluded under employment policy (aid contracts, job skills pathways, etc.) do not grant entitlement to the end-of-CDD indemnity.

Students During School Holidays

CDDs concluded with young individuals during school or university holidays are excluded from the system, provided that the contract is fully executed during the holiday period.

Early Termination by the Employee

When the employee terminates the contract early (resignation), the end-of-CDD indemnity is not due. This also applies in the event of serious misconduct by the employee or force majeure.

Refusal of CDI by the Employee

Since the “Labour Market” law of December 2022, the employee’s refusal of a CDI proposed by the employer at the end of the CDD results in the loss of the right to the precarity indemnity, provided the CDI offer pertains to the same job or a similar job, and the remuneration conditions are at least equivalent.

Social Regime of the End-of-CDD Indemnity

Subject to Social Contributions

The end-of-CDD indemnity is subject to the same social regime as salary. It enters into the base for all social contributions and levies (BOSS, boss.gouv.fr):

• Social security contributions (health, old age, family allowances, work accidents)
• Unemployment contributions and AGS
• Complementary retirement contributions AGIRC-ARRCO
• CSG (9.20%) and CRDS (0.50%) calculated on 98.25% of the amount
• Professional training contribution, apprenticeship tax

Impact on the Social Security Ceiling

Since the end-of-CDD indemnity is subject to contributions, it falls under the capped base. For calculating contributions subject to a ceiling (basic old-age, FNAL in certain cases), it is added to the remuneration of the last month and may lead to exceeding the monthly ceiling.

Example of Payroll Treatment

For an end-of-CDD indemnity of 1,837 € paid on the last payslip:

• Base for social contributions: salary for the month + 1,837 €
• CSG/CRDS: 1,837 × 98.25% = 1,804.84 € × 9.70% = 175.07 €
• The entire indemnity is subject to income tax and included in the taxable net income

Fiscal Regime of the End-of-CDD Indemnity

The end-of-CDD indemnity is fully subject to income tax. It is included in the employee’s taxable net income and is subject to withholding tax (PAS) at the rate applicable to the employee. There is no tax exemption for this indemnity.

Renewal and Succession of CDDs

Renewal of CDD

A CDD may be renewed twice, within the limit of the total maximum duration (18 months generally). The end-of-CDD indemnity is calculated on the entire duration of the contract, including renewals. It is only paid at the end of the last renewal.

Succession of Distinct CDDs

In the case of succession of distinct CDDs (with respect for the cooling-off period), each contract entitles the employee to its own end-of-CDD indemnity, calculated on the gross remuneration of the relevant contract. If the contracts are requalified as a CDI by the judge, the end-of-CDD indemnity is no longer due, but the employee may claim severance pay from the CDI.

Cooling-off Period Between Two CDDs

The cooling-off period between two CDDs for the same position is equal to one-third of the duration of the previous contract (including renewals) if the contract lasted 14 days or more, or half of the duration if the contract lasted less than 14 days. Failure to respect the cooling-off period may result in requalification as a CDI.

Early Termination of the CDD

Termination Initiated by the Employer

Except for serious misconduct, force majeure, or unfitness, early termination of a CDD by the employer entitles the employee to damages at least equal to the remuneration remaining due until the end of the contract, in addition to the end-of-CDD indemnity calculated on all remuneration received (including damages).

Termination Initiated by the Employee

The employee can only terminate the CDD early in the following cases:

• Hiring into a CDI (proof required)
• Serious misconduct of the employer
• Force majeure
• Unfitness established by the occupational physician

In the case of early termination for hiring into a CDI, the employee must respect a notice period calculated at one day per week of contract duration (including renewals), limited to 2 weeks. The end-of-CDD indemnity remains due in this case.

Termination by Mutual Agreement

The parties may agree to terminate the CDD by mutual consent. In this case, the end-of-CDD indemnity remains due, unless the parties agree otherwise in the termination agreement (which is, however, legally risky).

CDD with a Defined Purpose

Specificities

The CDD with a defined purpose (or mission CDD), reserved for engineers and executives, has a duration of between 18 and 36 months. It ends with the achievement of the purpose for which it was concluded, after a notice period of at least 2 months.

Specific Indemnity

At the end of the CDD with a defined purpose, the employee receives an indemnity equal to 10% of the total gross remuneration. This indemnity has the same nature and social regime as the classic end-of-CDD indemnity. It is not due if the contract continues into a CDI.

Treatment in DSN

Declaration of the Indemnity

The end-of-CDD indemnity is declared in DSN in the remuneration block (S21.G00.51) with the remuneration type code “002 – Non-capped gross remuneration”. It must appear in the gross remuneration for the last month of the contract.

Reporting End of Contract

The end of the CDD triggers an event reporting (block S21.G00.62) with the appropriate end-of-contract reason. The amount of the end-of-CDD indemnity must appear in the remuneration elements of the last month.

Points of Vigilance for Payroll Managers

Systematic Verification of the Right to Indemnity

Before each end of CDD, the payroll manager must verify whether the employee is entitled to the precarity indemnity by checking:

• The type of CDD (classic, seasonal, of use, aid, student)
• The existence or lack of a CDI proposal
• The circumstances of the end of the contract (normal term, early termination, reason)
• The applicable conventional provisions (6% or 10% rate)

Preservation of Justifications

The employer must keep the justifications for at least 3 years (duration of salary claims prescription): employment contract, renewal amendments, letter of CDI proposal if applicable, acknowledgment of receipt of the employee’s refusal.

Risks in the Event of URSSAF Control

Failure to pay the end-of-CDD indemnity or its incorrect calculation may result in a URSSAF recovery concerning unpaid contributions, increased by penalties. Moreover, the employee may file a claim with the labour court to demand payment of the indemnity, along with damages.

FAQ: End-of-CDD Indemnity in Payroll

Is the end-of-CDD indemnity due in the case of conversion of CDD to CDI?

No. If the CDD is immediately followed by a CDI, the end-of-CDD indemnity is not due. The continuation of the employment relationship in a CDI eliminates the precarious situation that the indemnity aims to compensate. Note: there must be continuity in the employment relationship, without interruption.

Is the precarity indemnity cumulative with the compensatory paid leave indemnity?

Yes, the two indemnities are cumulative. The compensatory paid leave indemnity is even included in the calculation base for the end-of-CDD indemnity. The employee thus receives both at the time of the final account settlement.

What is the prescription period for claiming the end-of-CDD indemnity?

The employee has a period of 3 years from the end of the contract to claim payment of the end-of-CDD indemnity before the labour court (Article L.3245-1 of the Labour Code, prescription of wage claims).

Does the end-of-CDD indemnity count towards unemployment rights?

Yes. The end-of-CDD indemnity being subject to unemployment contributions, it is included in the reference salary used to calculate the unemployment benefit (ARE). It is taken into account in determining the daily reference salary (SJR).

Does a CDD terminated for serious misconduct entitle the employee to the precarity indemnity?

No. Early termination of the CDD for the employee’s serious misconduct deprives the employee of the benefit of the end-of-CDD indemnity, in accordance with Article L.1243-10 of the Labour Code. However, the employer must prove the actual occurrence of the serious misconduct (an act attributable to the employee making it impossible to maintain the contract).