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

Introduction: The End-of-CDD Indemnity, a Core Right 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 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 their contract. In 2026, the rules governing its calculation, the cases of exclusion and the social security treatment of this indemnity remain framed by the Official Social Security Bulletin (BOSS, boss.gouv.fr) and the case law of the French Court of Cassation (Cour de cassation).

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

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 fixed-term contract 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 fixed-term contract.

Mandatory Nature

Payment of this indemnity is mandatory. The employer cannot be exempted from it by a contractual clause or by 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.

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 during the term of the contract, including renewals. This 10% rate constitutes the statutory floor.

Reduced Contractual Rate: 6%

An extended industry-wide agreement may provide for a reduced rate of 6%, provided it offers the employee counterparts in terms of vocational training (privileged access to training initiatives, skills assessment, etc.). In the absence of effective counterparts, the 10% rate applies automatically.

Calculation Base

The base of the end-of-CDD indemnity includes all gross remuneration received during the contract, namely:

• Base salary
• Bonuses (seniority, performance, objectives, prorated 13th-month payment, 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)

Caution: the end-of-CDD indemnity itself does not enter into its own calculation base. Likewise, reimbursements of professional expenses are excluded.

Full Calculation Example

An employee on a 6-month fixed-term contract 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 applies): 18,370 × 6% = €1,102.20

Cases of Exclusion from the End-of-CDD Indemnity

Offer of a CDI by the Employer

The indemnity is not owed where the employer offers the employee an open-ended contract (CDI) to occupy the same or a similar position, with at least equivalent remuneration, and the employee refuses this offer. It is essential for the employer to formalize this offer in writing and to keep evidence of the employee’s refusal.

Seasonal Fixed-Term Contracts

Seasonal contracts (grape harvest, tourism, ski resorts, etc.) are excluded from the benefit of the end-of-CDD indemnity, in accordance with Article L.1243-10 of the French Labour Code. However, a collective agreement may provide for the payment of an indemnity in this case.

CDD d’usage (Customary Fixed-Term Contracts)

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

Assisted-Employment Contracts

Fixed-term contracts concluded within the framework of employment policy (assisted-employment contracts, skills-employment pathways, etc.) do not give rise to the end-of-CDD indemnity.

Students During School Holidays

Fixed-term contracts 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 or force majeure.

Refusal of a CDI by the Employee

Since the “Labour Market” Act (loi Marché du travail) of December 2022, the employee’s refusal of an open-ended contract (CDI) offered by the employer at the end of the fixed-term contract results in the loss of entitlement to the precariousness indemnity, provided that the CDI offer concerns the same or a similar position and that 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 base of all social security contributions and levies (BOSS, boss.gouv.fr):

• Social security contributions (health, old-age pension, family allowances, work accidents)
• Unemployment and AGS (wage guarantee) 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 enters the capped base. For the calculation of capped contributions (basic old-age pension, FNAL in certain cases), it is added to the remuneration of the last month and may result in the monthly ceiling being exceeded.

Payroll Processing Example

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

• Social security contribution base: month’s 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 at source (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 Fixed-Term Contracts

Renewal of the Fixed-Term Contract

A fixed-term contract may be renewed twice, within the total maximum duration limit (18 months as a general rule). The end-of-CDD indemnity is calculated on the entire term of the contract, including renewals. It is only paid at the end of the final renewal.

Succession of Separate Fixed-Term Contracts

In the event of a succession of separate fixed-term contracts (with the waiting period observed), 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 an open-ended contract by the court, the end-of-CDD indemnity is no longer owed, but the employee may claim the severance indemnities applicable to a CDI.

Waiting Period Between Two Fixed-Term Contracts

The waiting period (délai de carence) between two fixed-term contracts on the same position is equal to 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 observe the waiting period may result in reclassification as an open-ended contract.

Early Termination of the Fixed-Term Contract

Termination at the Employer’s Initiative

Except in cases of gross misconduct, force majeure or unfitness for work, early termination of a fixed-term contract 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 fixed-term contract early in the following cases:

• Hiring under an open-ended contract (supporting evidence required)
• Gross misconduct by the employer
• Force majeure
• Unfitness for work established by the occupational physician

In the event of early termination due to hiring under an open-ended contract, the employee must observe a notice period calculated at one day per week of the contract’s duration (including renewals), up to a limit of 2 weeks. The end-of-CDD indemnity remains owed in this case.

Termination by Mutual Agreement

The parties may agree to terminate the fixed-term contract by mutual agreement. In this case, the end-of-CDD indemnity remains owed, unless the parties agree otherwise in the termination agreement (which is, however, legally risky).

Fixed-Term Contract with a Defined Purpose (CDD à Objet Défini)

Specific Features

The fixed-term contract with a defined purpose (CDD à objet défini, or project-based fixed-term contract), reserved for engineers and executives, has a duration of between 18 and 36 months. It ends upon completion of the purpose for which it was concluded, after a notice period of at least 2 months.

Specific Indemnity

At the end of the fixed-term contract 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 an open-ended contract.

DSN Processing

Declaration of the Indemnity

The end-of-CDD indemnity is declared in the DSN (Déclaration Sociale Nominative) in the remuneration block (S21.G00.51) with 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 fixed-term contract 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 of the last month.

Points of Vigilance for the Payroll Administrator

Systematic Verification of Entitlement to the Indemnity

Before each end of a fixed-term contract, the payroll administrator must verify whether the employee is entitled to the precariousness indemnity by checking:

• The type of fixed-term contract (standard, seasonal, customary, assisted, student)
• Whether or not an offer of an open-ended contract exists
• The circumstances of the end of the contract (normal end date, 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 salary claims): the employment contract, renewal amendments, the CDI offer letter where applicable, and the acknowledgment of receipt of the employee’s refusal.

Risks in the Event of an URSSAF Audit

Failure to pay the end-of-CDD indemnity or its incorrect calculation may result in an URSSAF reassessment covering the unpaid contributions, increased by penalties. Furthermore, the employee may bring the matter before the labour tribunal (conseil de prud’hommes) 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 fixed-term contract is converted into an open-ended contract?

No. If the fixed-term contract immediately continues as an open-ended contract, the end-of-CDD indemnity is not owed. The continuation of the working relationship under a CDI removes the job insecurity that the indemnity is intended to compensate. Caution: there must be continuity in the working relationship, without interruption.

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

Yes, the two indemnities may be combined. The compensatory paid-leave indemnity is even included in the calculation base 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).

Does the end-of-CDD indemnity enter into the calculation of unemployment rights?

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 wage (salaire journalier de référence, or SJR).

Does a fixed-term contract terminated for gross misconduct give rise to the precariousness indemnity?

No. Early termination of the fixed-term contract for gross misconduct by the employee 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 the continuation of the contract impossible).