French Labour Law

How to Calculate Paid Leave in Payroll for 2026: A Comprehensive Guide

DAIRIA Law · 2026-07-07 · 12 min

How to Calculate Paid Leave in Payroll for 2026: A Comprehensive Guide

Introduction: Paid Leave, an Indispensable Calculation in Payroll

The calculation of paid leave is one of the most recurring and technical operations in payroll management. Between the tenth rule (règle du dixième) and the salary maintenance (maintien de salaire), the mandatory comparison between both methods, the specifics of temporary workers (intérimaires) and construction companies (BTP), along with the major reform of the law of April 22, 2024 regarding paid leave acquisition during sickness, payroll managers must master a dense regulatory corpus.

The BOSS (Bulletin Officiel de la Sécurité Sociale) provides essential clarifications on the impact of paid leave in calculating general exemptions and on sector-specific particulars (BTP, temporary work). This comprehensive guide will assist you in mastering all aspects of calculating paid leave in 2025.

Acquisition of Paid Leave

The Principle: 2.5 Working Days Per Month of Effective Work

Every employee acquires 2.5 working days of paid leave per month of effective work with the same employer, totaling 30 working days (5 weeks) for a complete year of work. The reference period for acquisition runs from June 1 of the year N-1 to May 31 of the year N (unless a collective agreement specifies a different period, such as the calendar year).

When the number of days acquired is not a whole number, it is rounded up to the nearest whole number. For example, an employee who has worked for 7 months acquires: 7 x 2.5 = 17.5, rounded to 18 working days.

Counting in Working Days

Many companies count leave in working days (Monday to Friday, so 5 days a week) rather than in total working days (Monday to Saturday, so 6 days a week). In this case, the annual right is 25 working days instead of 30 working days.

The shift to working days must never be detrimental to the employee compared to the total working days count. A verification must be conducted, particularly for employees whose days off do not correspond to Saturday.

Periods Assumed as Effective Work

Certain periods of absence are considered equivalent to effective work for the acquisition of paid leave:

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

The Revolution of the Law of April 22, 2024: Acquisition of Paid Leave During Sickness

The law no. 2024-364 of April 22, 2024 has profoundly changed the rules for acquiring paid leave during sick leave, transposing the jurisprudence of the Court of Justice of the European Union (CJEU).

The New Principle

Since this law, employees on non-occupational sick leave acquire paid leave, at a rate of 2 working days per month of absence (instead of 2.5 days for effective work), within a limit of 24 working days per year (instead of 30). This acquisition applies retroactively from December 1, 2009.

Practical Impact for Payroll Managers

This reform entails several concrete changes:

  • Payroll software must be configured to generate the acquisition of paid leave during ordinary sick leave
  • A carry-over right is provided for leave not taken due to illness: the employee has 15 months after their return to take these days
  • The employer must inform the employee of their leave rights within one month of 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.

Calculation of Paid Leave Indemnity: Tenth Rule vs. Salary Maintenance

The paid leave indemnity is the amount paid to the employee during their leave. It is calculated according to two methods, and the employer must apply the most favorable one for the employee.

Salary Maintenance Rule

The employee receives the salary they would have earned had they worked. In practical terms, the payslip is established as if the employee were actively working: same basic salary, same recurring bonuses, same benefits.

This method is easy to implement for employees with stable remuneration (fixed monthly wages without variation). It is generally more favorable for employees with high fixed incomes.

Tenth Rule

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

  • Basic 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, vacation bonus) paid independently of taking leave, reimbursements of expenses, and exceptional bonuses not related to work.

The daily indemnity for a day of leave is calculated as follows:

Daily Indemnity = (Annual Gross Remuneration / 10) / Number of Paid Leave Days Acquired

Numerical Comparison Example

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

Salary Maintenance Method:

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

Tenth Rule Method:

  • 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 favorable to the employee in this case.

This comparison is mandatory for each period of leave taken. Payroll software performs this calculation automatically, but it is recommended to verify the parameters, especially the elements of remuneration included in the basis for the tenth rule.

The Principle of Paid Leave Funds

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

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

  • Full Payment (100%) (code 100): the fund pays the entire indemnity directly to the employee
  • Payment at 90% (code 90): the fund pays 90% of the indemnity, retaining the remaining 10% to cover social charges

Impact on Social Contributions

The indemnities paid by the paid leave funds are subject to social contributions. The employer must declare the amounts paid by the fund in the DSN and include them in the calculation base for contributions. The payroll configuration must be rigorous to avoid double counting.

Temporary Workers: 10% Increase

The BOSS reminds that temporary workers benefit from a compensatory indemnity for paid leave (ICCP) equal to 10% of the total gross remuneration received during the assignment. This indemnity is paid at the end of each assignment (or monthly in the case of a long assignment).

Furthermore, for the calculation of general contribution reductions, the BOSS provides for an increase of the reference minimum wage (SMIC) by 1.1 (multiplicative coefficient) for temporary employees. This increase takes into account the 10% ICCP included in the remuneration.

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

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

This increase ensures that the temporary worker is not penalized in the general reduction calculation due to the ICCP.

The Impact of Paid Leave on General Reductions

The BOSS specifies the modalities for integrating paid leave into the calculation formulas for general reductions of employer contributions (**unique progressive general reduction since January 1, 2026, Article L.241-13 CSS).

General Case

The indemnity for paid leave is an integral part of the gross remuneration included in the numerator of the reduction coefficient calculation formula. The SMIC in the denominator is calculated based on paid hours, including those corresponding to paid leave.

Funds in Reductions

When leave is managed by a fund (BTP), the BOSS provides specific formulas integrating the contribution rates of paid leave within the calculation. The employer does not directly pay the paid leave indemnity, but the contribution fund affects the reduction calculation.

The calculation formula for the T coefficient (maximum reduction rate) integrates the contributions of paid leave paid to the fund, which modifies the reduction tapering threshold.

Counting Accrued Paid Leave Taken

Counting in Working Days

Counting in working days (from Monday to Saturday, i.e., 6 days a week) is the legal counting method. The first day of leave counted is the first working day that the employee would have worked. The last counted day is the last working day before return, including Saturday.

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

Counting in Working Days

In working days (usually Monday to Friday), the same week of leave corresponds to 5 working days.

The transition from one counting mode to another must not disadvantage the employee. Verification must be conducted on the total annual rights: 30 working days = 25 working days = 5 weeks of leave.

Compensatory Indemnity for Paid Leave (ICCP) Upon Departure

Upon termination of the employment contract (regardless of the reason: resignation, dismissal, rupture conventionnelle, end of CDD), the employee receives a compensatory indemnity for accrued and untaken leave.

The calculation of the ICCP follows the same rules as for paid leave indemnities: comparison between the tenth and maintenance, applying the most favorable method.

Example: An employee leaves the company with a balance of 15 working days of untaken leave. Their gross remuneration for the reference period amounts to €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 withholding tax under common law conditions.

The law of April 22, 2024 has also introduced important rules regarding the interplay between paid leave and illness:

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

These new provisions strengthen employee protection and impose more precise leave tracking on HR departments.

Summary Table of Key Rules in 2026

  • Acquisition: 2.5 working days/month (effective work) or 2 working days/month (non-occupational illness)
  • Annual Rights: 30 working days (25 working days) = 5 weeks
  • Paid Leave Indemnity: max(salary maintenance, 1/10th of annual gross remuneration)
  • Temporary Workers: ICCP of 10% + SMIC increase x 1.1 for reductions
  • Paid Leave Funds (BTP): 100 or 90 payment depending on fund code
  • Sickness: acquisition of 2 working days/month since the law of April 22, 2024
  • Carry-over: 15 months after return for leave acquired during illness

FAQ: Your Questions About Paid Leave in Payroll for 2026

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

Yes, the comparison between the two methods is a legal obligation for each taking of leave. The employer must calculate the indemnity according to both methods and apply the more favorable one for the employee. This comparison can be done globally over all the leave taken during the period or with each leave taken. In practice, payroll software performs this comparison automatically, but it is essential to verify that the basis for the tenth rule includes all required remuneration elements.

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

No, since the law of April 22, 2024, an employee on non-occupational sick leave acquires 2 working days per month (instead of 2.5 for effective work), up to a maximum of 24 working days per year. However, an employee on leave due to work-related accidents or occupational diseases continues to acquire 2.5 working days per month as if they were actively working, limited to one year of absence.

How does the 1.1 increase for temporary workers work in calculating reductions?

The 1.1 increase of the reference SMIC for temporary workers aims to neutralize the effect of the 10% ICCP in calculating general reductions. Without this increase, the ICCP would artificially inflate the temporary worker’s gross remuneration compared to the SMIC, therefore reducing the amount of the reduction. With the increase, the reference SMIC rises from €1,801.80 to €1,981.98 in 2025, maintaining the balance of the calculation.

What are the consequences of non-compliance with the carry-over rights for leave after illness?

If the employer does not respect the 15-month carry-over right established by the law of April 22, 2024, they expose themselves to a risk of court judgment for damages. The employee could claim an indemnity corresponding to the lost leave, calculated according to the most favorable method (tenth or maintenance). Additionally, the employer is obliged to inform the employee of their rights within a month of their return. Failure to inform may be regarded as a fault engaging the employer’s liability.

Is the compensatory indemnity for paid leave subject to social contributions?

Yes, the ICCP is fully subject to social contributions and withholding tax under common law conditions. It is included in the base for all contributions (social security, unemployment, supplementary retirement, CSG/CRDS). It also enters into the calculation of the net social amount (MNS) and taxable net income. It must appear on the final settlement of account and on the employee’s last payslip.

← All insights