Overtime in France: Tax and Social Charge Exemptions — The Payroll Traps to Avoid

Exemptions on overtime apply only to genuine overtime — the hours worked beyond 35 hours. Three very common situations trip up payroll: a contractual working week below 35 hours, a week that includes an absence, and the interaction with the déduction forfaitaire spécifique (DFS — specific flat-rate deduction on the social security base). Here is an overview from the employer’s perspective.

This article is part of the series Payroll Law: The Employer’s Guide.

Reminder: what is an overtime hour?

The statutory working week is 35 hours. Overtime hours are those worked beyond 35 hours (Article L. 3121-28 of the French Labour Code). A shorter contractual week (e.g. 32 hours) does not, on its own, turn the hours between 32 and 35 hours into overtime: they remain ordinary hours, unless a collective agreement or the employment contract provides for a more favourable regime.

1. Contractual working week below 35 hours

The hours between the contractual duration (e.g. 32 hours) and 35 hours do not, in principle, give entitlement to:

the reduction of employee social security contributions — reserved for overtime hours under Article L. 241-17 of the French Social Security Code (referring to Articles L. 3121-28 et seq. of the Labour Code);
the employer flat-rate deduction — which targets “any overtime hour worked” (Article L. 241-18 of the Social Security Code);
the income tax exemption — Article 81 quater of the French General Tax Code exempts the remuneration referred to in Article L. 241-17 of the Social Security Code.

The BOSS (Bulletin officiel de la Sécurité sociale — the official social security guidance) confirms this: for full-time employees, the exemptions apply to hours worked beyond the statutory working time.

2. A week with an absence: everything depends on its nature

Ordinary absence (sick leave, unpaid leave, non-remunerated absence): hours paid at the normal rate are not overtime hours → no exemption.
Paid holiday — point of caution: following the ruling of the French Cour de cassation (Supreme Court) of 10 September 2025, for an employee whose hours are counted on a weekly basis, paid holiday days may need to be taken into account in the threshold triggering overtime. Some hours may therefore become legally classified as overtime. However, the effect of this reversal on entitlement to social and tax exemptions has not yet been the subject of explicit administrative guidance: exercise caution in payroll processing.

3. Income tax exemption and DFS: before or after the abatement?

The specific flat-rate deduction (DFS) reduces the base of certain contributions, but not the CSG/CRDS (general social contributions). The overtime tax exemption therefore cannot be calculated on the basis of contributions after the DFS. Example: gross remuneration of €2,000 (including overtime), a 10% DFS reducing the contribution base to €1,800 → the tax base is not €1,800. The calculation is carried out according to the rules for taxable net pay, with the CSG/CRDS determined without applying the DFS.

Frequently asked questions

Are the hours between 32 and 35 hours exempt? No, in principle (these are ordinary hours).

A week with an absence? No exemption for an ordinary absence; be vigilant regarding paid holiday (Cass. 10/09/2025).

Tax exemption and DFS? The calculation is based on taxable net pay, not on the base after the DFS.

Written and supervised by Audrey Mourer, Chief Operating Officer and Head of the Payroll Advisory Department at DAIRIA Avocats.