How to Calculate Fixed-Term Contract (CDD) End-of-Contract Pay in France in 2026: A Complete Payroll Guide
Introduction: The End-of-CDD Indemnity, a Key Entitlement for Fixed-Term Employees
The end-of-contract indemnity, commonly known as the “prime de précarité” (precariousness bonus), is an essential component of the remuneration of employees 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 insecure situation in which the employee finds themselves at the end of their contract. In 2026, the rules for calculation, the exclusion cases and the social security treatment of this indemnity remain governed by the Official Social Security Bulletin (Bulletin Officiel de la Sécurité Sociale, or BOSS, boss.gouv.fr) and by the case law of the French Supreme Court (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), exclusion cases, social security and tax treatment, renewal and succession of CDDs, early termination, and the specific case of the fixed-purpose CDD.
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 owed to the employee at the end of a CDD where the contractual relationship does not continue under an indefinite-term contract (contrat à durée indéterminée, or CDI). Its purpose is to compensate for the job instability inherent in a 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 null and void.
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 term 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 terms of vocational training (privileged access to training programmes, a skills assessment, etc.). In the absence of effective consideration, the 10% rate applies as of right.
Calculation Base
The base of the end-of-CDD indemnity comprises all gross remuneration received during the contract, namely:
- Base salary
- Bonuses (seniority, performance, targets, pro-rated 13th month, etc.)
- Benefits in kind (housing, vehicle, meals, etc.)
- Overtime and additional hours
- Compensatory indemnity for paid leave
- Various premiums (night work, Sunday work, public holidays)
Please note: the end-of-CDD indemnity itself is not included in its own calculation base. Likewise, reimbursements of professional expenses are excluded.
Full Calculation 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 indemnity for paid leave: €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% under an industry-wide agreement): 18,370 × 6% = €1,102.20
Cases Excluding the End-of-CDD Indemnity
Offer of a CDI by the Employer
The indemnity is not owed where the employer offers the employee a CDI to hold the same job or a similar job, 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 harvests, 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-Use CDD)
Customary-use CDDs (“CDD d’usage”, used in sectors listed by decree: hospitality and catering, live entertainment, audiovisual, teaching, professional sport, etc.) are excluded from the precariousness indemnity if the applicable collective agreement expressly so provides.
Subsidised Contracts
CDDs concluded within the framework of employment policy (subsidised contracts, skills-employment pathways, etc.) do not give rise to entitlement to the end-of-CDD indemnity.
Students During School Holidays
CDDs concluded with young people during school or university holidays are excluded from the scheme, provided that the contract is performed entirely during the holiday period.
Early Termination by the Employee
Where the employee terminates the contract early (resignation), the end-of-CDD indemnity is not owed. The same applies in the event of the employee’s gross misconduct or force majeure.
Refusal of a CDI by the Employee
Since the “Labour Market” Act 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 job or a similar job and that the remuneration terms are at least equivalent.
Social Security Treatment of the End-of-CDD Indemnity
Liability to Social Security Contributions
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, old-age, family allowances, workplace accidents)
- Unemployment and AGS contributions
- AGIRC-ARRCO supplementary pension contributions
- CSG (9.20%) and CRDS (0.50%) calculated on 98.25% of the amount
- Vocational training contribution, apprenticeship tax
Impact on the Social Security Ceiling
As the end-of-CDD indemnity is subject to contributions, it falls within the capped base. For the calculation of capped contributions (basic old-age pension, FNAL in certain cases), it is added to the remuneration of the final month and may result in the monthly ceiling being exceeded.
Payroll Processing Example
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 falls within taxable net pay
Tax Treatment of the End-of-CDD Indemnity
The end-of-CDD indemnity is fully subject to income tax. It falls within 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 maximum total duration (18 months as a general rule). The end-of-CDD indemnity is calculated on the entire term of the contract, including renewals. It is only paid at the end of the final renewal.
Succession of Separate CDDs
Where separate CDDs succeed one another (subject to compliance with 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 owed, but the employee may claim the termination indemnities of the CDI.
Waiting Period Between Two CDDs
The waiting 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 one half of the duration if the contract lasted less than 14 days. Failure to comply with the waiting period may result in reclassification as a CDI.
Early Termination of the CDD
Termination at the Employer’s Initiative
Except in cases of gross misconduct, force majeure or unfitness, 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 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 the contract’s duration (including renewals), up to a maximum of 2 weeks. The end-of-CDD indemnity remains owed 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 owed, unless the parties agree otherwise in the termination agreement (which is, however, legally risky).
Fixed-Purpose CDD
Specific Features
The fixed-purpose CDD (“CDD à objet défini”, or mission CDD), reserved for engineers and managerial staff (cadres), has a duration of between 18 and 36 months. It ends upon completion of the purpose for which it was concluded, following a minimum notice period of 2 months.
Specific Indemnity
At the end of the fixed-purpose CDD, the employee receives an indemnity equal to 10% of the 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 owed if the contract continues under a CDI.
DSN Processing
Declaring the Indemnity
The end-of-CDD indemnity is declared in the DSN (nominative social declaration) in 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 Reporting
The end of the CDD gives rise to an event report (block S21.G00.62) with the appropriate end-of-contract reason. The amount of the end-of-CDD indemnity must appear in the remuneration items of the final month.
Key Points of Attention for the Payroll Manager
Systematic Verification of Entitlement to the Indemnity
Before each CDD ends, the payroll manager must verify whether the employee is entitled to the precariousness indemnity by checking:
- The type of CDD (standard, seasonal, customary-use, subsidised, student)
- Whether or not a CDI offer has been made
- The circumstances of the end of the contract (normal expiry, early termination, reason)
- The applicable collective bargaining provisions (6% or 10% rate)
Retention of Supporting Documents
The employer must retain supporting documents for at least 3 years (the limitation period for wages): the employment contract, renewal amendments, the CDI offer letter where applicable, and acknowledgement of receipt of the employee’s refusal.
Risks in the Event of a URSSAF Inspection
Failure to pay the end-of-CDD indemnity or an incorrect calculation may result in a URSSAF reassessment covering the unpaid contributions, increased by penalties. In addition, the employee may bring a claim before the labour court (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 owed where the CDD is converted into a CDI?
No. If the CDD continues immediately under a CDI, the end-of-CDD indemnity is not owed. The continuation of the employment relationship under a CDI removes the precarious situation that the indemnity is intended to compensate. Please note: there must be continuity in the employment relationship, without interruption.
Can the precariousness indemnity be combined with the compensatory indemnity for paid leave?
Yes, the two indemnities can be combined. The compensatory indemnity for paid leave 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 court (Article L.3245-1 of the French Labour Code, limitation period for wage claims).
Does the end-of-CDD indemnity count towards the calculation of unemployment entitlements?
Yes. As the end-of-CDD indemnity is subject to unemployment contributions, it falls within the reference salary used to calculate the return-to-work assistance allowance (ARE). It is taken into account in determining the reference daily wage (SJR).
Does a CDD terminated for gross misconduct give rise to entitlement to the precariousness indemnity?
No. Early termination of the CDD for the employee’s gross misconduct deprives the employee 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 that makes continuation of the contract impossible).