How to Calculate the End-of-Fixed-Term-Contract Indemnity in French Payroll in 2026: A Complete Guide

Introduction: the end-of-CDD indemnity, a fundamental entitlement for fixed-term employees

The end-of-contract indemnity, commonly referred to as the prime de précarité (“precariousness premium”), is an essential component of the remuneration of an employee on a fixed-term contract (contrat à durée déterminée, or CDD). Provided for by Article L.1243-8 of the French Labour Code, it is intended to compensate for the job insecurity in which the employee finds themselves at the end of the contract. In 2026, the rules governing its calculation, the cases of exclusion, and the social security treatment of this indemnity remain framed by the Official Social Security Bulletin (Bulletin Officiel de la Sécurité Sociale, or BOSS, boss.gouv.fr) and the case law of the French Court of Cassation (Cour de cassation).

This complete guide is intended for payroll managers, HR directors, and HR administrators. It covers the entire subject: calculation of the indemnity (base, rate), cases of exclusion, social security and tax treatment, renewal and succession of CDDs, early termination, and the specific case of the fixed-term contract with a defined purpose.

What is the end-of-CDD indemnity?

Legal basis

The end-of-contract indemnity is provided for by 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 under an open-ended contract (contrat à durée indéterminée, or CDI). Its purpose is to compensate for the job instability inherent in the CDD.

Mandatory nature

Payment of this indemnity is mandatory. The employer cannot avoid it through a contractual clause or a collective agreement (except in the case of the reduced 6% rate provided for by an extended industry-wide agreement). Any contractual clause providing for the employee’s waiver of this indemnity is deemed unwritten.

Calculating the end-of-CDD indemnity

Standard rate: 10%

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

Reduced contractual rate: 6%

An extended industry-wide agreement may provide for a reduced rate of 6%, provided that the employee is offered consideration in the area of professional training (privileged access to training programmes, skills assessment, etc.). In the absence of effective consideration, the 10% rate applies as of right.

Calculation base

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

Base salary
Bonuses and premiums (seniority, performance, targets, prorated 13th month, etc.)
Benefits in kind (housing, vehicle, meals, etc.)
Overtime and additional hours
The compensatory paid-leave indemnity
Various premiums (night work, Sunday work, public holidays)

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

Full worked example

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

Base salary: €2,200 × 6 = €13,200
Performance bonus: €500
Overtime: €1,800
Vehicle benefit in kind: €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 industry-wide agreement applies): 18,370 × 6% = €1,102.20

Cases where the end-of-CDD indemnity is excluded

Offer of a CDI by the employer

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

Seasonal CDD

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

CDD d’usage (customary fixed-term contract)

CDDs d’usage (in sectors listed by decree: hotels and catering, entertainment, audiovisual, teaching, professional sport, etc.) are excluded from the precariousness indemnity if the applicable collective agreement expressly so provides.

Subsidised contracts

CDDs entered into under employment-policy schemes (subsidised contracts, skills-based employment pathways, etc.) do not give rise to the end-of-CDD indemnity.

Students during school holidays

CDDs entered into with young people during school or university holidays are excluded from the scheme, provided that the contract is performed entirely within the holiday period.

Early termination by the employee

Where the employee terminates the contract early (resignation), the end-of-CDD indemnity is not due. The same applies in the event of gross misconduct (faute grave) by the employee or force majeure.

Refusal of a CDI by the employee

Since the “Labour Market” Act (loi Marché du travail) of December 2022, the employee’s refusal of a CDI offered by the employer at the end of the CDD results in the loss of the right to the precariousness indemnity, provided that the CDI offer concerns the same or a similar position and that the remuneration conditions are at least equivalent.

The end-of-CDD indemnity is subject to the same social security treatment as salary. It falls within the base of all social security contributions and levies (BOSS, boss.gouv.fr):

Social security contributions (health, retirement, family allowances, occupational accidents)
Unemployment and AGS (wage guarantee) contributions
AGIRC-ARRCO supplementary pension contributions
CSG (9.20%) and CRDS (0.50%) calculated on 98.25% of the amount
Professional training contribution, apprenticeship tax

Since the end-of-CDD indemnity is subject to contributions, it falls within the capped base. For the calculation of capped contributions (basic retirement, FNAL in certain cases), it is added to the remuneration of the final month and may result in exceeding the monthly ceiling.

Example of payroll processing

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

Social security contribution base: monthly salary + €1,837
CSG/CRDS: 1,837 × 98.25% = €1,804.84 × 9.70% = €175.07
The entire indemnity is subject to income tax and is included in taxable net pay

Tax treatment 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 pay and is subject to withholding at source (prélèvement à la source, or PAS) at the rate applicable to the employee. There is no tax exemption for this indemnity.

Renewal and succession of CDDs

Renewal of the CDD

A CDD may be renewed twice, within the limit of the total maximum duration (18 months as a general rule). 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 final renewal.

Succession of separate CDDs

In the event of a succession of separate CDDs (with observance of the waiting period), each contract gives rise to its own end-of-CDD indemnity, calculated on the gross remuneration of the contract concerned. If the contracts are reclassified as a CDI by the court, the end-of-CDD indemnity is no longer due, but the employee may claim the CDI termination indemnities.

Waiting period between two CDDs

The waiting period (délai de carence) between two CDDs for the same position equals 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 observe the waiting period may result in reclassification as a CDI.

Early termination of the CDD

Termination at the employer’s initiative

Save for gross misconduct, force majeure, or unfitness for work, early termination of a CDD by the employer entitles the employee to damages of an amount at least equal to the remuneration remaining due until the end of the contract, to which is added the end-of-CDD indemnity calculated on all remuneration received (including the damages).

Termination at the employee’s initiative

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

Hiring under a CDI (supporting evidence required)
Gross misconduct by the employer
Force majeure
Unfitness for work established by the occupational physician

In the event of early termination for hiring under a CDI, the employee must observe a notice period calculated at the rate of one day per week of contract duration (including renewals), up to a maximum of 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 agreement. In this case, the end-of-CDD indemnity remains due, unless the parties agree otherwise in the termination agreement (which is nonetheless legally risky).

Fixed-term contract with a defined purpose (CDD à objet défini)

Specific features

The fixed-term contract with a defined purpose (CDD à objet défini, or project-based CDD), reserved for engineers and executives, has a duration of between 18 and 36 months. It ends upon completion of the purpose for which it was entered into, following an advance notice period of at least 2 months.

Specific indemnity

At the end of the CDD à objet défini, the employee receives an indemnity equal to 10% of total gross remuneration. This indemnity has the same nature and the same social security treatment as the standard end-of-CDD indemnity. It is not due if the contract continues as a CDI.

Processing in the DSN (French payroll declaration)

Declaration of the indemnity

The end-of-CDD indemnity is declared in the DSN (Déclaration Sociale Nominative) within the remuneration block (S21.G00.51) with remuneration type code “002 – Uncapped gross remuneration”. It must appear in the gross remuneration of the final month of the contract.

End-of-contract notification

The end of the CDD gives rise to an event notification (block S21.G00.62) with the appropriate end-of-contract reason code. The amount of the end-of-CDD indemnity must appear in the remuneration items of the final month.

Points of vigilance for the payroll manager

Systematic verification of entitlement to the indemnity

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

The type of CDD (standard, seasonal, d’usage, subsidised, student)
Whether or not a CDI offer exists
The circumstances of the end of the contract (normal end of term, early termination, reason)
The applicable collective bargaining provisions (6% or 10% rate)

Retention of supporting documents

The employer must keep supporting documents for at least 3 years (limitation period for wages): employment contract, renewal amendments, CDI offer letter where applicable, acknowledgement of receipt of the employee’s refusal.

Risks in the event of a URSSAF audit

Failure to pay the end-of-CDD indemnity or its erroneous calculation may result in a URSSAF reassessment covering the unpaid contributions, increased by penalties. In addition, the employee may bring proceedings before the labour tribunal (conseil de prud’hommes) to claim payment of the indemnity, together with damages.

FAQ: the end-of-CDD indemnity in payroll

Is the end-of-CDD indemnity due where the CDD is converted into a CDI?

No. If the CDD immediately continues as a CDI, the end-of-CDD indemnity is not due. The continuation of the employment relationship under a CDI removes the job insecurity that the indemnity is intended to compensate. Note: there must be continuity in the employment relationship, without interruption.

Can the precariousness indemnity be combined with the compensatory paid-leave indemnity?

Yes, the two indemnities may be combined. The compensatory paid-leave indemnity is in fact included in the calculation base of the end-of-CDD indemnity. The employee therefore receives both at the time of the final settlement (solde de tout compte).

What is the limitation 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 tribunal (Article L.3245-1 of the French Labour Code, limitation period for wage claims).

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

Yes. As the end-of-CDD indemnity is subject to unemployment contributions, it is included in the reference salary used to calculate the return-to-work allowance (allocation d’aide au retour à l’emploi, or ARE). It is taken into account in determining the reference daily wage (salaire journalier de référence, or SJR).

Does a CDD terminated for gross misconduct give rise to the precariousness indemnity?

No. Early termination of the CDD for the employee’s gross misconduct deprives them of the benefit of the end-of-CDD indemnity, in accordance with Article L.1243-10 of the French Labour Code. The employer must, however, prove the reality of the gross misconduct (an act attributable to the employee making the continuation of the contract impossible).

How to Calculate End-of-Fixed-Term-Contract Indemnity in French Payroll in 2026: A Complete Guide