French Labour Law

How to Calculate Paid Leave in French Payroll in 2026: A Complete Employer's Guide

DAIRIA Law · 2026-08-04 · 12 min

How to Calculate Paid Leave in French Payroll in 2026: A Complete Employer’s Guide

Introduction: Paid Leave, an Unavoidable Payroll Calculation

Calculating paid leave (congés payés) is one of the most recurrent and technical operations in payroll management. Between the tenth rule (règle du dixième), the salary maintenance method (maintien de salaire), the mandatory comparison between the two methods, the specific rules for temporary workers (intérimaires) and construction-sector companies, and the major reform introduced by the Act of 22 April 2024 on the accrual of leave during sick leave, payroll managers must master a dense body of regulations.

The BOSS (Bulletin Officiel de la Sécurité Sociale, the official social security bulletin) provides essential guidance on the impact of paid leave in the calculation of general contribution reliefs and on sector-specific rules (construction, temporary work). This complete guide will help you master every aspect of paid leave calculation in 2025.

The Accrual of Paid Leave

The Principle: 2.5 Working Days per Month of Actual Work

Every employee accrues 2.5 working days (jours ouvrables) of paid leave per month of actual work with the same employer, i.e. 30 working days (5 weeks) for a full year of work. The reference period for accrual runs from 1 June of year N-1 to 31 May of year N (unless a collective agreement provides for another period, for example the calendar year).

Where the number of days accrued is not a whole number, it is rounded up to the next whole number. For example, an employee who has worked 7 months accrues: 7 x 2.5 = 17.5, rounded up to 18 working days.

Counting in Business Days

Many companies count leave in business days (jours ouvrés, Monday to Friday, i.e. 5 days per week) rather than in working days (jours ouvrables, Monday to Saturday, i.e. 6 days per week). In that case, the annual entitlement is 25 business days instead of 30 working days.

Switching to business days must never be less favourable to the employee than counting in working days. A verification must be carried out, in particular for employees whose rest days do not fall on Saturday.

Periods Treated as Actual Work

Certain periods of absence are treated as actual work for the accrual of paid leave:

  • Paid leave itself
  • Maternity, paternity and adoption leave
  • Absences due to work-related accidents and occupational illness (up to one year)
  • Training leave
  • RTT days (working-time-reduction days)
  • Ordinary sick leave (since the Act of 22 April 2024)

The Game-Changer of the Act of 22 April 2024: Paid Leave Accrual During Sick Leave

Act No. 2024-364 of 22 April 2024 substantially amended the rules for accruing paid leave during sick leave, transposing the case law of the Court of Justice of the European Union (CJEU).

The New Principle

Since this Act, employees on non-occupational sick leave accrue paid leave, at a rate of 2 working days per month of absence (instead of 2.5 days for actual work), up to a limit of 24 working days per year (instead of 30). This accrual applies retroactively from 1 December 2009.

Practical Impact for Payroll Managers

This reform entails several concrete changes:

  • Payroll software must be configured to generate paid leave accrual during ordinary sick leave
  • A carry-over right is provided for leave not taken due to illness: the employee has 15 months after returning to work to take this leave
  • The employer must inform the employee of their leave entitlements within the month following their return
  • Retroactive adjustments (since December 2009) are capped at 2 working days per month of sick leave

In practice, this reform increases the cost of absenteeism for employers and requires rigorous monitoring of leave balances in payroll software.

Calculating the Paid Leave Indemnity: The Tenth Rule vs. Salary Maintenance

The paid leave indemnity is the amount paid to the employee during their leave. It is calculated using two methods, and the employer must apply whichever is more favourable to the employee.

The Salary Maintenance Method

The employee receives the remuneration they would have received had they worked. In practice, the pay slip is drawn up as if the employee were in normal activity: same base salary, same recurring bonuses, same benefits.

This method is simple to implement for employees whose pay is stable (monthly-paid without variation). It is generally more favourable for employees with high fixed remuneration.

The Tenth Rule (10th)

The indemnity is equal to one-tenth of the total gross remuneration received during the reference period. All pay components are taken into account:

  • Base salary
  • Overtime
  • Work-related bonuses (seniority bonus, performance bonus, etc.)
  • Benefits in kind
  • Paid leave indemnity from the previous period

Excluded are: annual bonuses (13th month, holiday bonus) paid independently of leave being taken, expense reimbursements, and exceptional bonuses unrelated to work.

The tenth-rule indemnity for one day of leave is calculated as follows:

Daily indemnity = (Annual gross remuneration / 10) / Number of paid leave days accrued

A Worked Comparison

An employee takes 12 working days of leave (2 weeks). Their monthly salary is €2,800. During the reference period, they received total gross remuneration of €35,600 (including bonuses and overtime). They accrued 30 days of leave.

Salary maintenance method:

  • The employee receives their usual salary of €2,800 for the full month
  • Indemnity for 12 days = 2,800 x (12/26 working days worked) = €1,292.31

Tenth method:

  • One-tenth of annual remuneration: 35,600 / 10 = €3,560
  • Indemnity for 12 days: 3,560 x (12/30) = €1,424

Comparison: €1,424 (tenth) > €1,292.31 (maintenance). The employer must apply the tenth rule, which is more favourable to the employee in this case.

This comparison is mandatory each time leave is taken. Payroll software performs this calculation automatically, but it is advisable to check the settings, in particular the pay components included in the tenth-rule base.

The Principle of Paid Leave Funds

In certain sectors of activity, notably the construction sector (BTP – building and public works), the management of paid leave is pooled through paid leave funds (caisses de congés payés). The employer pays contributions to the fund, which then pays the paid leave indemnities directly to the employees.

The BOSS specifies the rules applicable to payments by the funds:

  • 100% payment (code 100): the fund pays the full paid leave indemnity directly to the employee
  • 90% payment (code 90): the fund pays 90% of the indemnity, the remaining 10% being retained to cover social contributions

Impact on Social Contributions

Indemnities paid by paid leave funds are subject to social contributions. The employer must declare the amounts paid by the fund in the DSN (Déclaration Sociale Nominative, the nominative social declaration) and include them in the contribution base. Payroll configuration must be rigorous to avoid double-counting.

Temporary Workers: The 1/10th (10%) Uplift

The BOSS recalls that temporary workers benefit from a compensatory paid leave indemnity (ICCP – indemnité compensatrice de congés payés) equal to 10% of the total gross remuneration received during the assignment. This indemnity is paid at the end of each assignment (or each month for long assignments).

In addition, for the calculation of general contribution reliefs, the BOSS provides for an uplift of the reference SMIC by 1.1 (multiplier coefficient) for temporary workers. This uplift takes into account the 10% ICCP built into the remuneration.

Example: For a temporary worker in 2026, the monthly reference SMIC for calculating reliefs is:

1,867.02 x 1.1 = €2,053.72 (SMIC as of 1 June 2026)

This uplift ensures that the temporary worker is not penalised in the calculation of the general reduction because of the ICCP.

The Impact of Paid Leave on General Contribution Reliefs

The BOSS specifies how paid leave is incorporated into the formulas for calculating general employer contribution reliefs (single degressive general reduction since 1 January 2026, Article L.241-13 of the French Social Security Code).

The General Case

The paid leave indemnity forms an integral part of the gross remuneration taken into account in the numerator of the reduction coefficient formula. The SMIC in the denominator is calculated on the basis of remunerated hours, including the hours corresponding to paid leave.

Where leave is managed by a fund (construction sector), the BOSS provides for specific formulas incorporating the fund contribution rates into the calculation. The employer does not pay the paid leave indemnity directly, but the fund contribution affects the calculation of the relief.

The formula for the T coefficient (maximum reduction rate) incorporates the paid leave contributions paid to the fund, which modifies the degressivity threshold of the relief.

Counting Paid Leave Taken

Counting in Working Days

Counting in working days (jours ouvrables, Monday to Saturday, i.e. 6 days per week) is the legal counting method. The first day of leave counted is the first working day on which the employee should have worked. The last day counted is the last working day before returning to work, including Saturday.

Example: An employee working Monday to Friday takes one week of leave from Monday to Friday. In working days, the count is 6 days (Monday, Tuesday, Wednesday, Thursday, Friday, Saturday).

Counting in Business Days

In business days (jours ouvrés, days usually worked, generally Monday to Friday), the same week of leave corresponds to 5 business days.

Switching from one counting method to the other must not prejudice the employee. Verification is carried out on the total annual entitlement: 30 working days = 25 business days = 5 weeks of leave.

The Compensatory Paid Leave Indemnity (ICCP) Upon Departure

Upon termination of the employment contract (whatever the cause: resignation, dismissal, rupture conventionnelle — a mutually agreed termination —, end of a fixed-term contract), the employee receives a compensatory indemnity for accrued but untaken leave.

The calculation of the ICCP follows the same rules as the paid leave indemnity: comparison between the tenth and the maintenance method, applying whichever is more favourable.

Example: An employee leaves the company with a balance of 15 working days of untaken leave. Their gross remuneration over the reference period is €34,000.

  • Tenth: 34,000 / 10 = €3,400
  • ICCP for 15 days: 3,400 x (15/30) = €1,700

This indemnity is subject to social contributions and to withholding tax under ordinary conditions.

The Act of 22 April 2024 also introduced important rules on the interaction between paid leave and illness:

  • An employee who falls ill during their leave may now carry over the leave days not taken due to illness, provided they can justify a sick-leave certificate
  • The carry-over right is limited to 15 months after the end of the leave-taking period
  • The employer must inform the employee of their carry-over rights within one month after returning to work

These new provisions strengthen employee protection and require HR departments to manage leave balances more precisely.

Summary Table of Key Rules in 2026

  • Accrual: 2.5 working days/month (actual work) or 2 working days/month (non-occupational illness)
  • Annual entitlement: 30 working days (25 business days) = 5 weeks
  • Paid leave indemnity: max(salary maintenance, 1/10th of annual gross remuneration)
  • Temporary workers: 10% ICCP + SMIC uplift x 1.1 for reliefs
  • Paid leave funds (construction): 100 or 90 payment depending on the fund code
  • Illness: accrual of 2 working days/month since the Act of 22 April 2024
  • Carry-over: 15 months after return for leave accrued during illness

FAQ: Your Questions on Paid Leave in Payroll in 2026

Is the employer always required to compare the tenth rule and salary maintenance?

Yes, the comparison between the two methods is a legal obligation each time leave is taken. The employer must calculate the indemnity using both methods and apply whichever is more favourable to the employee. This comparison may be carried out globally across all the leave for the period or each time leave is taken. In practice, payroll software performs this comparison automatically, but it is essential to verify that the tenth-rule base indeed includes all the required pay components.

Does an employee on sick leave accrue as much leave as an employee at work?

No. Since the Act of 22 April 2024, an employee on non-occupational sick leave accrues 2 working days per month (instead of 2.5 for actual work), up to a limit of 24 working days per year. On the other hand, an employee on leave due to a work-related accident or occupational illness continues to accrue 2.5 working days per month, as if they were at work, up to one year of absence.

How does the 1.1 uplift for temporary workers work in the calculation of reliefs?

The 1.1 uplift of the reference SMIC for temporary workers aims to neutralise the effect of the 10% ICCP in the calculation of general reliefs. Without this uplift, the ICCP would artificially increase the temporary worker’s gross remuneration relative to the SMIC, thereby reducing the amount of the relief. With the uplift, the reference SMIC rises from €1,867.02 to €2,053.72 as of 1 June 2026, which maintains the balance of the calculation.

What are the consequences of failing to comply with the leave carry-over right after illness?

If the employer does not comply with the 15-month carry-over right established by the Act of 22 April 2024, they run the risk of a labour-court order to pay damages. The employee could claim an indemnity corresponding to the lost leave, calculated using the more favourable method (tenth or maintenance). In addition, the employer is obliged to inform the employee of their rights within the month following their return. A failure to inform could be regarded as a fault engaging the employer’s liability.

Is the compensatory paid leave indemnity subject to social contributions?

Yes, the ICCP is fully subject to social contributions and to withholding tax under ordinary conditions. It is included in the base of all contributions (social security, unemployment, supplementary pension, CSG/CRDS). It is also included in the calculation of the net social amount (MNS) and the taxable net. It must appear on the final settlement (solde de tout compte) and on the employee’s final pay slip.

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