French Labour Law

How to Calculate Paid Leave in French Payroll in 2026: A Complete Guide for Employers

DAIRIA Law · 2026-09-15 · 12 min

How to Calculate Paid Leave in French Payroll in 2026: A Complete Guide for Employers

Introduction: Paid Leave, an Unavoidable Payroll Calculation

Calculating paid leave (congés payés) is one of the most recurring and technical operations in payroll management. Between the one-tenth rule and salary maintenance, the mandatory comparison between the two methods, the specific rules for temporary workers and construction (BTP) companies, and the major reform introduced by the Law of 22 April 2024 on leave accrual during sickness, payroll managers must master a dense body of regulations.

The BOSS (Bulletin Officiel de la Sécurité Sociale — the official social security bulletin) provides essential clarifications on the impact of paid leave in calculating general contribution reductions and on sector-specific rules (construction, temporary work). This complete guide helps you master every aspect of paid leave calculation in 2026.

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 × 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 this 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 absence periods are treated as actual work for the purpose of accruing paid leave:

  • Paid leave itself
  • Maternity, paternity and adoption leave
  • Absences due to occupational accidents and occupational illness (up to a limit of one year)
  • Training leave
  • RTT days (réduction du temps de travail — working-time reduction days)
  • Ordinary sick leave (since the Law of 22 April 2024)

The Impact of the Law of 22 April 2024: Paid Leave Accrual During Sickness

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

The New Principle

Since this law, 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 right to carry over is provided for leave not taken due to sickness: the employee has 15 months after returning to work to take this leave
  • The employer must inform the employee of their leave entitlements within one month of their return
  • Retroactive corrections (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 Allowance: the 1/10th Rule vs. Salary Maintenance

The paid leave allowance (indemnité de congés payés) is the amount paid to the employee during their leave. It is calculated using two methods, and the employer must apply the one more favourable to the employee.

The Salary Maintenance Rule

The employee receives the remuneration they would have received had they worked. In practice, the payslip is prepared as if the employee were working normally: same base salary, same recurring bonuses, same benefits.

This method is simple to implement for employees with stable remuneration (monthly-paid with no variation). It is generally more favourable for employees with a high fixed salary.

The One-Tenth (1/10th) Rule

The allowance is equal to 1/10th of the total gross remuneration received during the reference period. All components of remuneration are taken into account:

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

Excluded are: annual bonuses (13th month, holiday bonus) paid independently of taking leave, expense reimbursements, and exceptional bonuses not related to work.

The 1/10th allowance for one day of leave is calculated as follows:

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

Worked Comparison Example

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 paid leave.

Salary maintenance method:

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

1/10th method:

  • 1/10th of annual remuneration: 35,600 / 10 = €3,560
  • Allowance for 12 days: 3,560 × (12/30) = €1,424

Comparison: €1,424 (1/10th) > €1,292.31 (maintenance). The employer must apply the 1/10th 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 remuneration components included in the 1/10th base.

The Principle of Paid Leave Funds

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

The BOSS sets out the applicable rules on payments by the funds:

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

Impact on Social Contributions

Allowances 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 monthly payroll 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 allowance (indemnité compensatrice de congés payés — ICCP) equal to 10% of the total gross remuneration received during the assignment. This allowance is paid at the end of each assignment (or each month for long assignments).

In addition, for the purpose of calculating general contribution reductions, the BOSS provides for a 1.1 uplift of the reference minimum wage (multiplier coefficient) for temporary workers. This uplift accounts for the 10% ICCP included in remuneration.

Example: For a temporary worker in 2026, the reference monthly minimum wage (SMIC) for calculating reductions is:

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

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

The Impact of Paid Leave on General Contribution Reductions

The BOSS specifies how paid leave is integrated into the formulas for calculating general reductions of employer contributions (single degressive general reduction (réduction générale dégressive unique) since 1 January 2026, Article L.241-13 of the French Social Security Code).

The General Case

The paid leave allowance 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 the hours paid, 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’s contribution rates into the calculation. The employer does not pay the paid leave allowance directly, but the fund contribution affects the reduction calculation.

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

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 statutory counting method. The first day of leave counted is the first working day on which the employee would have worked. The last day counted is the last working day before returning, including Saturday.

Example: An employee working Monday to Friday takes one week of leave from Monday to Friday. In working days, this counts as 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 disadvantage the employee. The verification is carried out on the full annual entitlement: 30 working days = 25 business days = 5 weeks of leave.

The Compensatory Paid Leave Allowance (ICCP) on Departure

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

The calculation of the ICCP follows the same rules as the paid leave allowance: comparison between the 1/10th and salary maintenance, applying the more favourable method.

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.

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

This allowance is subject to social contributions and to withholding tax at source under ordinary conditions.

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

  • An employee who falls ill during their leave may now carry over the leave days not taken due to sickness, provided they can justify a medical leave certificate
  • The right to carry over 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 of their return

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 sickness)
  • Annual entitlement: 30 working days (25 business days) = 5 weeks
  • Paid leave allowance: max(salary maintenance, 1/10th of annual gross remuneration)
  • Temporary workers: 10% ICCP + 1.1 SMIC uplift for contribution reductions
  • Paid leave funds (construction): 100% or 90% payment depending on the fund code
  • Sickness: accrual of 2 working days/month since the Law of 22 April 2024
  • Carry-over: 15 months after return for leave accrued during sickness

FAQ: Your Questions on Paid Leave in Payroll in 2026

Is the employer always required to compare the 1/10th 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 allowance using both methods and apply the one more favourable to the employee. This comparison may be carried out globally over all leave in the period or each time leave is taken. In practice, payroll software performs this comparison automatically, but it is essential to verify that the 1/10th base correctly includes all the required remuneration components.

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

No. Since the Law 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. However, an employee on leave due to an occupational accident or occupational illness continues to accrue 2.5 working days per month, as if at work, up to a limit of one year of absence.

How does the 1.1 uplift for temporary workers work in the contribution reduction calculation?

The 1.1 uplift of the reference minimum wage for temporary workers is intended to neutralise the effect of the 10% ICCP in the general contribution reduction calculation. Without this uplift, the ICCP would artificially increase the temporary worker’s gross remuneration relative to the SMIC, thereby reducing the amount of the reduction. 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 sickness?

If the employer fails to comply with the 15-month carry-over right established by the Law of 22 April 2024, it faces a risk of an employment tribunal (conseil de prud’hommes) award of damages. The employee could claim compensation corresponding to the lost leave, calculated using the more favourable method (1/10th or maintenance). In addition, the employer has an obligation to inform the employee of their rights within one month of their return. A failure to inform could be regarded as a fault engaging the employer’s liability.

Is the compensatory paid leave allowance subject to social contributions?

Yes, the ICCP is fully subject to social contributions and to withholding tax at source 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 (montant net social — MNS) and the taxable net. It must appear on the final settlement statement (solde de tout compte) and on the employee’s final payslip.

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