How to Calculate the End-of-CDD Indemnity in Payroll in 2026: A Complete Guide for Employers
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 owed to an employee under a fixed-term contract (contrat à durée déterminée, or CDD). Provided for by Article L.1243-8 of the French Labour Code, it is intended to compensate for the job insecurity in which the employee finds themselves at the end of the contract. In 2026, the calculation rules, exclusion cases and the social-security treatment of this indemnity remain governed by the Bulletin Officiel de la Sécurité Sociale (BOSS, the official social-security bulletin, boss.gouv.fr) and the case law of the Cour de cassation (French Supreme Court).
This complete guide is intended for payroll managers, HR directors and HR administrators. It covers the entire subject: calculation of the indemnity (base, rate), exclusion cases, social-security and tax treatment, renewal and succession of CDDs, early termination, and the specific case of the fixed-term contract with a defined purpose.
What is the end-of-CDD indemnity?
Legal basis
The end-of-contract indemnity is provided for by Articles L.1243-8 to L.1243-10 of the French Labour Code. It is owed to the employee at the end of a CDD where the contractual relationship does not continue under a permanent contract (contrat à durée indéterminée, or CDI). Its purpose is to compensate for the job instability inherent in a CDD.
Mandatory nature
Payment of this indemnity is mandatory. The employer cannot avoid it through a clause in the contract or through a collective agreement (except in the case of the reduced 6% rate provided for by an extended industry-wide agreement). Any contractual clause providing that the employee waives this indemnity is deemed unwritten.
Calculating 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 that the employee is offered counterparts in terms of vocational training (priority access to training programmes, skills assessment, etc.). In the absence of effective counterparts, the 10% rate applies as of right.
Calculation base
The base 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
- The compensatory paid-leave indemnity
- Various premiums (night work, Sunday work, public holidays)
Please note: the end-of-CDD indemnity itself does not enter into its own calculation base. Likewise, reimbursements of professional expenses are excluded.
Full worked 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% if industry-wide agreement): 18,370 × 6% = €1,102.20
Cases where the end-of-CDD indemnity is excluded
Offer of a CDI by the employer
The indemnity is not owed where the employer offers the employee a CDI to hold the same or a similar job, 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 harvest, tourism, ski resorts, etc.) are excluded from the end-of-CDD indemnity, in accordance with Article L.1243-10 of the French Labour Code. However, a collective agreement may provide for payment of an indemnity in such cases.
CDD d’usage (customary fixed-term contract)
Customary fixed-term contracts (CDD d’usage, used in sectors listed by decree: hospitality and catering, live entertainment, audiovisual, teaching, professional sport, etc.) are excluded from the precariousness indemnity if 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 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 that 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 owed. The same applies in the event of gross misconduct by the employee (faute grave) or force majeure.
Refusal of a CDI by the employee
Since the December 2022 “Labour Market” Act (loi Marché du travail), the employee’s refusal of a CDI offered by the employer at the end of the CDD results in the loss of the right to the precariousness indemnity, provided that the CDI offer concerns the same or a similar job and that the remuneration conditions are at least equivalent.
Social-security treatment of the end-of-CDD indemnity
Liability to social contributions
The end-of-CDD indemnity is subject to the same social-security treatment as salary. It falls within the base for all social contributions and levies (BOSS, boss.gouv.fr):
- Social-security contributions (health, old-age, family allowances, workplace accidents)
- Unemployment and AGS (wage-guarantee scheme) contributions
- AGIRC-ARRCO supplementary pension contributions
- CSG (9.20%) and CRDS (0.50%) social levies, 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 falls within the capped base. For the calculation of capped contributions (basic old-age pension, FNAL in certain cases), it is added to the last month’s remuneration and may cause the monthly ceiling to be exceeded.
Payroll processing example
For an end-of-CDD indemnity of €1,837 paid on the last payslip:
- Social-security contribution base: 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 enters into taxable net pay
Tax treatment of the end-of-CDD indemnity
The end-of-CDD indemnity is fully subject to income tax. It enters into the employee’s taxable net pay and is subject to withholding at source (prélèvement à la source, 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 maximum total 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 only paid at the end of the final renewal.
Succession of separate CDDs
In the case of a succession of separate CDDs (with 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 a judge, the end-of-CDD indemnity is no longer owed, but the employee may claim the termination indemnities applicable to a CDI.
Waiting period between two CDDs
The waiting period (délai de carence) between two CDDs on 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 its duration if the contract lasted less than 14 days. Failure to comply with the waiting period may lead to reclassification as a CDI.
Early termination of the CDD
Termination at the employer’s initiative
Except in cases of gross misconduct, force majeure or unfitness for work, 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, plus the end-of-CDD indemnity calculated on all 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 for work established by the occupational physician
In the event of early termination for hiring under a CDI, the employee must observe a notice period calculated at one day per week of contract duration (including renewals), up to a maximum of 2 weeks. The end-of-CDD indemnity remains owed in this case.
Termination by mutual agreement
The parties may agree to terminate the CDD by mutual consent. In this case, the end-of-CDD indemnity remains owed, unless the parties agree otherwise in the termination agreement (which is, however, legally risky).
CDD with a defined purpose
Specific features
The fixed-term contract with a defined purpose (CDD à objet défini, or project-based CDD), reserved for engineers and managers/executives (cadres), has a duration of between 18 and 36 months. It ends upon completion of the purpose for which it was concluded, after a minimum notice period of 2 months.
Specific indemnity
At the end of the CDD with 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 owed if the contract continues as a CDI.
DSN (nominative social declaration) processing
Declaring the indemnity
The end-of-CDD indemnity is declared in the DSN in the remuneration block (S21.G00.51) using remuneration type code “002 – Uncapped gross remuneration”. It must appear in the gross remuneration of the last month of the contract.
Reporting the end of contract
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 components of the last month.
Points requiring particular attention for the payroll manager
Systematic verification of entitlement to the indemnity
Before each CDD ends, the payroll manager 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 has been made
- The circumstances of the end of the contract (normal expiry, early termination, reason)
- The applicable collective-agreement provisions (6% or 10% rate)
Retention of supporting documents
The employer must retain supporting documents for at least 3 years (the limitation period for wage claims): the employment contract, renewal amendments, the CDI offer letter where applicable, and the acknowledgement of the employee’s refusal.
Risks in the event of an URSSAF inspection
Failure to pay the end-of-CDD indemnity or an erroneous calculation may lead to an URSSAF (social-security collection authority) reassessment covering the unpaid contributions, increased by penalties. In addition, the employee may bring the matter before the conseil de prud’hommes (labour tribunal) to claim payment of the indemnity, together with damages.
FAQ: the end-of-CDD indemnity in payroll
Is the end-of-CDD indemnity owed where the CDD is converted into a CDI?
No. If the CDD is immediately followed by a CDI, the end-of-CDD indemnity is not owed. The continuation of the employment relationship under a CDI removes the job insecurity that the indemnity is intended to compensate. Please note: there must be continuity in the employment relationship, without interruption.
Can the precariousness indemnity be combined with the compensatory paid-leave indemnity?
Yes, the two indemnities can be combined. The compensatory paid-leave indemnity is in fact included in the calculation base of the end-of-CDD indemnity. The employee therefore receives both at the time of the final settlement of accounts (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, on the limitation of wage claims).
Does the end-of-CDD indemnity count towards unemployment benefit entitlement?
Yes. As the end-of-CDD indemnity is subject to unemployment contributions, it enters into the reference salary used to calculate the return-to-work allowance (ARE). It is taken into account in determining the reference daily salary (SJR).
Does a CDD terminated for gross misconduct give rise to the precariousness indemnity?
No. Early termination of the CDD for gross misconduct by the employee deprives them of the benefit of the end-of-CDD indemnity, in accordance with Article L.1243-10 of the French Labour Code. The employer must nevertheless prove the reality of the gross misconduct (an act attributable to the employee making continuation of the contract impossible).