French Labour Law

How to Calculate Paid Leave in Payroll in 2025: A Complete Guide

DAIRIA Law · 2026-06-04 · 11 min

How to Calculate Paid Leave in Payroll in 2025: A Complete Guide

Introduction: Paid Leave, an Essential Calculation in Payroll

Calculating paid leave is one of the most recurring and technical operations in payroll management. Between the rule of one-tenth and salary maintenance, the mandatory comparison between the two methods, the specifics for temporary workers (intérimaires) and construction companies (BTP), and the major reform of the law of April 22, 2024 concerning the acquisition of leave during illness, payroll managers must master a dense regulatory framework.

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

Acquisition of Paid Leave

The Principle: 2.5 Working Days per Month of Actual Work

Every employee acquires 2.5 working days of paid leave per month of actual work with the same employer, equating to 30 working days (5 weeks) for a full 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 next whole number. For example, an employee working for 7 months acquires: 7 x 2.5 = 17.5, rounded up to 18 working days.

Counting in Working Days

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

The shift to working days must never be detrimental to the employee compared to the count in calendar days. Verification should be carried out, particularly for employees whose days off do not correspond to Saturday.

Periods Considered as Actual Work

Certain absence periods are considered equivalent to actual work for acquiring paid leave:

  • Paid leave itself
  • Maternity, paternity and adoption leave
  • Sick leave for work accidents and occupational diseases (up to one year)
  • Training leave
  • Days off (RTT)
  • Ordinary sick leave (since the law of April 22, 2024)

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

The law n° 2024-364 of April 22, 2024 has fundamentally modified 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-work-related sick leave acquire paid leave, at a rate of 2 working days per month of absence (instead of 2.5 days for actual work), up to 24 working days per year (instead of 30). This acquisition applies retroactively from December 1, 2009.

Practical Impact for Payroll Managers

This reform involves 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 returning to take this leave.
  • The employer must inform the employee of their leave rights within one 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 tracking of leave balances in payroll software.

Calculation of Paid Leave Compensation: Rule of One-Tenth vs Salary Maintenance

The paid leave compensation is the amount paid to the employee during their leave. It is calculated according to two methods, and the employer must apply the most favourable to the employee.

The Salary Maintenance Method

The employee receives the salary they would have earned if they had worked. Specifically, the payslip is prepared as if the employee were in normal activity: same base salary, same recurring bonuses, same benefits.

This method is straightforward to implement for employees whose compensation is stable (monthly salary without variation). It is generally more favourable for employees with a high fixed salary.

The Rule of One-Tenth (10th)

The compensation equals 1/10th of the total gross salary earned during the reference period. All components of remuneration are considered:

  • Base salary
  • Overtime
  • Job-related bonuses (seniority bonus, performance bonus, etc.)
  • In-kind benefits
  • Paid leave compensation from the previous period

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

The 10th compensation for one day of leave is calculated as follows:

Daily Compensation = (Gross Annual Salary / 10) / Number of Paid Leave Days Acquired

Example Comparison

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

Maintenance Method:

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

One-Tenth Method:

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

Comparison: €1,424 (10th) > €1,292.31 (maintenance). The employer must apply the one-tenth rule, which is more favourable to the employee in this case.

This comparison is mandatory for every leave taken. Payroll software performs this calculation automatically, but it is advisable to check the settings, particularly which remuneration elements are included in the base of the 10th.

The Principle of Paid Leave Funds

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

The BOSS specifies the applicable rules for contributions made by the funds:

  • 100% Payment (code 100): the fund pays out the entire paid leave compensation directly to the employee.
  • 90% Payment (code 90): the fund pays 90% of the compensation, with the remaining 10% kept to cover social charges.

Impact on Social Contributions

Compensation paid by paid leave funds is subject to social contributions. The employer must declare the amounts paid by the fund in the DSN (Déclaration Sociale Nominative) and include them in the base of contributions. Payroll settings must be meticulous to avoid double counting.

Temporary Workers: One-Tenth Increase (10%)

The BOSS reminds that temporary workers benefit from a compensatory paid leave indemnity (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 for long assignments).

Additionally, for the calculation of general exemption reductions (reduction générale des cotisations), the BOSS provides a 1.1 reference SMIC (minimum wage) multiplier for temporary employees. This increase considers the integrated ICCP of 10% within the remuneration.

Example: For a temporary worker in 2025, the reference monthly SMIC for calculating exemptions is:

1,801.80 x 1.1 = €1,981.98.

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

The Impact of Paid Leave on General Exemptions

The BOSS clarifies the integration of paid leave in calculating general labor costs reductions (formerly known as reduction Fillon).

General Case

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

When leave is managed by a fund (BTP), the BOSS provides specific formulas integrating the contribution rates of the paid leave fund in the calculation. The employer does not directly pay the paid leave compensation, but the fund contribution impacts the calculation of the exemption.

The calculation formula for coefficient T (maximum reduction rate) includes the paid leave contributions paid to the fund, changing the degressivity threshold of the exemption.

Counting Paid Leave Taken

Counting in Calendar Days

The legal counting in calendar days (from Monday to Saturday, so 6 days a week) is the statutory counting method. The first day counted is the first calendar day on which the employee was due to work. The last counted day is the last calendar day before the resumption, including Saturday.

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

Counting in Working Days

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

Switching from one counting mode to the other should not disadvantage the employee. Verification is done over the entire annual entitlement: 30 calendar days = 25 working days = 5 weeks of leave.

Compensatory Paid Leave Indemnity (ICCP) at Termination

Upon the termination of the employment contract (whatever the cause: resignation, dismissal, mutual termination agreement, end of fixed-term contract), the employee receives a compensatory indemnity for accrued and unused leave.

The calculation of the ICCP follows the same rules as paid leave compensation: comparison between the one-tenth and maintenance methods, applying the most favourable.

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

  • One-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 tax withholding under common law conditions.

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

  • An employee who falls ill during their leave can now carry over leave days not taken due to illness, provided they justify their sick leave.
  • The carry-over right is limited to 15 months after 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 bolster employee protection and require HR services to manage leave balances more precisely.

Summary Table of Key Rules in 2025

  • Acquisition: 2.5 working days/month (actual work) or 2 working days/month (non-work-related illness)
  • Annual Rights: 30 working days (25 working days) = 5 weeks
  • Paid Leave Compensation: max(salary maintenance, 1/10th of gross annual remuneration)
  • Temporary Workers: ICCP of 10% + SMIC increase x 1.1 for exemptions
  • Paid Leave Funds (BTP): 100% or 90% payment according to fund code
  • Illness: acquisition of 2 working days/month since the law of April 22, 2024
  • Carry-Over: 15 months after return for leave accrued during illness

FAQ: Your Questions on Paid Leave in Payroll in 2025

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

Yes, the comparison between the two methods is a legal obligation for every leave taken. The employer must calculate the compensation according to both methods and apply the most favourable to the employee. This comparison can be done globally for all leave within the period or for each leave taken. In practice, payroll software automatically performs this comparison, but it is essential to check that the one-tenth base correctly incorporates all required remuneration elements.

Does an employee on sick leave acquire as much leave as an employee working?

No, since the law of April 22, 2024, an employee on non-work-related sick leave acquires 2 working days per month (instead of 2.5 for actual work), capped at 24 working days per year. In contrast, an employee on leave due to a work accident or occupational illness continues to acquire 2.5 working days per month as if they were working, for up to one year of absence.

How does the 1.1 increase for temporary workers function in the calculation of exemptions?

The 1.1 increase of the reference SMIC for temporary workers aims to neutralize the effect of the 10% ICCP in calculating general exemptions. Without this increase, the ICCP would artificially raise the gross remuneration of the temporary worker compared to the SMIC, thus reducing the amount of exemption. 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 failing to respect the right to carry over leave after illness?

If the employer does not comply with the 15-month carry-over right established by the law of April 22, 2024, they expose themselves to the risk of employment tribunal condemnation for damages. The employee might claim an indemnity corresponding to the lost leave, calculated using the most favourable method (one-tenth or maintenance). Additionally, the employer is obliged to inform the employee of their rights within one month after they return. Failure to inform could be considered 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 tax withholding under common law conditions. It is included in the base of all contributions (social security, unemployment, supplementary retirement, CSG/CRDS). It also counts towards the calculation of the net social amount (MNS) and taxable income. It must appear on the final statement and the last payslip of the employee.

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