How to Calculate the End-of-CDD Indemnity in French Payroll in 2026: A Complete Guide

Introduction: The End-of-CDD Indemnity, a Core Entitlement of 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 an employee on a fixed-term contract (contrat à durée déterminée, or CDD). Provided for under Article L.1243-8 of the French Labour Code, it is intended to compensate for the precarious situation in which the employee finds themselves at the end of their contract. In 2026, the calculation rules, exclusion cases, and 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 the case law of the French Supreme Court (Cour de cassation).

This complete guide is aimed at payroll managers, HR directors, and HR administrators. It covers the topic in full: calculation of the indemnity (basis, rate), exclusion cases, social security and tax treatment, renewal and succession of CDDs, early termination, and the specific case of the fixed-term contract for a defined purpose (CDD à objet défini).

What Is the End-of-CDD Indemnity?

Legal Basis

The end-of-contract indemnity is provided for under Articles L.1243-8 to L.1243-10 of the French Labour Code. It is payable to the employee at the end of a CDD where the contractual relationship does not continue under an open-ended contract (contrat à durée indéterminée, or CDI). Its purpose is to compensate for the employment instability inherent in the CDD.

Mandatory Nature

Payment of this indemnity is mandatory. The employer cannot avoid it by way of 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 unwritten.

Calculation of 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 duration of the contract, including renewals. This 10% rate is the statutory floor.

Reduced Contractual Rate: 6%

An extended industry-wide agreement may provide for a reduced rate of 6%, provided the employee is offered counterparts in terms of vocational training (priority access to training programmes, skills assessments, etc.). In the absence of effective counterparts, the 10% rate applies automatically.

Calculation Basis

The basis for the end-of-CDD indemnity comprises all gross remuneration received during the contract, namely:

• Base salary
• Bonuses (seniority, performance, targets, prorated 13th-month bonus, etc.)
• Benefits in kind (housing, vehicle, meals, etc.)
• Overtime and additional hours
• Compensatory paid-leave indemnity
• Various premiums (night work, Sunday, public holidays)

Please note: the end-of-CDD indemnity itself is not included in its own calculation basis. 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 paid-leave indemnity: €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 payable where the employer offers the employee a CDI for the same or a similar position, 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 proof of the employee’s refusal.

Seasonal CDD

Seasonal contracts (grape harvesting, tourism, ski resorts, etc.) are excluded from entitlement to the end-of-CDD indemnity, in accordance with Article L.1243-10 of the French Labour Code. However, a collective agreement or convention may provide for the payment of an indemnity in such cases.

CDD d’usage (Contract Customary in Certain Sectors)

The CDD d’usage (customary fixed-term contracts, in sectors listed by decree: hospitality and catering, entertainment, audiovisual, education, professional sport, etc.) are excluded from the precariousness indemnity where the applicable collective agreement expressly so provides.

Subsidised Contracts

CDDs concluded under employment-policy schemes (subsidised contracts, skills-based 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 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 payable. The same applies in the event of gross misconduct by the employee 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 entitlement to the precariousness indemnity, provided the CDI offer relates to the same or a similar position and the remuneration conditions are at least equivalent.

Social Security Treatment of the End-of-CDD Indemnity

Subject to Social Security Contributions

The end-of-CDD indemnity is subject to the same social security treatment as salary. It is included in the basis for all social security contributions and levies (BOSS, boss.gouv.fr):

• Social security contributions (health insurance, old-age, family allowances, occupational 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 is included in the capped basis. For the calculation of capped contributions (basic old-age, FNAL in certain cases), it is added to the remuneration for the last month and may cause the monthly ceiling to be exceeded.

Payroll Treatment Example

For an end-of-CDD indemnity of €1,837 paid on the final payslip:

• Social security contribution basis: 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 is included in the taxable net amount

Tax Treatment of the End-of-CDD Indemnity

The end-of-CDD indemnity is fully subject to income tax. It is included in the employee’s taxable net amount and is subject to withholding tax (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 total maximum duration (18 months as a general rule). The end-of-CDD indemnity is calculated on the entire duration of the contract, including renewals. It is paid only at the end of the final renewal.

Succession of Separate CDDs

In the event of a succession of separate CDDs (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 payable, but the employee may claim the CDI termination indemnities.

Waiting Period Between Two CDDs

The waiting period (délai de carence) between two CDDs for the same position equals one-third of the duration of the previous contract (including renewals) if the contract lasted 14 days or more, or half 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

Other than 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, in addition to the end-of-CDD indemnity calculated on the entire 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 documentation required)
• Gross misconduct by the employer
• Force majeure
• Unfitness certified by the occupational physician

In the event of early termination due to hiring under a CDI, the employee must give notice calculated at the rate of one day per week of contract duration (including renewals), up to a maximum of 2 weeks. The end-of-CDD indemnity remains payable 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 payable, unless the parties agree otherwise in the termination agreement (which is, however, legally risky).

CDD for a Defined Purpose (CDD à objet défini)

Specific Features

The CDD à objet défini (fixed-term contract for a defined purpose, or mission-based CDD), reserved for engineers and managers (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 CDD for a defined purpose, 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 payable if the contract continues as a CDI.

DSN (Nominative Social Declaration) Treatment

Declaring the Indemnity

The end-of-CDD indemnity is declared in the DSN in the remuneration block (S21.G00.51) with the remuneration type code “002 – Uncapped gross remuneration.” It must appear in the gross remuneration for 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 for the final month.

Key Points of Attention for the Payroll Administrator

Systematic Verification of Indemnity Entitlement

Before each CDD end date, the payroll administrator must verify whether the employee is entitled to the precariousness indemnity by checking:

• The type of CDD (standard, seasonal, customary, subsidised, student)
• Whether or not a CDI offer was made
• The circumstances of the end of the contract (normal term, 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 salaries): employment contract, renewal amendments, CDI offer letter where applicable, acknowledgement of receipt of the employee’s refusal.

Risks in the Event of a URSSAF Audit

Failure to pay the end-of-CDD indemnity, or its incorrect calculation, may result in a URSSAF reassessment covering the unpaid contributions, plus penalties. In addition, the employee may bring a claim before the labour tribunal (conseil de prud’hommes) to seek payment of the indemnity, together with damages.

FAQ: End-of-CDD Indemnity in Payroll

Is the end-of-CDD indemnity payable where the CDD is converted into a CDI?

No. If the CDD continues immediately under a CDI, the end-of-CDD indemnity is not payable. 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.

Is the precariousness indemnity cumulative with the compensatory paid-leave indemnity?

Yes, the two indemnities are cumulative. The compensatory paid-leave indemnity is even included in the calculation basis 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 tribunal (Article L.3245-1 of the French Labour Code, limitation period for salary claims).

Is the end-of-CDD indemnity included in the calculation of unemployment entitlements?

Yes. As the end-of-CDD indemnity is subject to unemployment contributions, it is included in the reference salary used to calculate the return-to-work allowance (allocation d’aide au retour à l’emploi, or ARE). It is taken into account in determining the reference daily wage (salaire journalier de référence, or SJR).

Does a CDD terminated for gross misconduct give rise 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 making it impossible to maintain the contract).