Overtime: rates and calculation

Introduction

Overtime is one of the most frequently misunderstood topics in French employment law. Yet, incorrect calculation exposes the employer to URSSAF adjustments, employment tribunal disputes and significant financial penalties. Whether you are a Human Resources Director, SME manager or payroll manager, understanding precisely the overtime uplift rates and their calculation methods is essential. This article details the legal rules in force in 2026, practical formulas, the tax and social deduction regime, as well as the contractual specificities to monitor.

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Definition and triggering of overtime

What is overtime?

According to article L. 3121-28 of the French Labour Code, overtime comprises all hours of actual work performed beyond the legal weekly duration, fixed at 35 hours for full-time employees under the general scheme. This rule applies to calendar weeks (Monday 0:00 to Sunday 24:00), unless a company agreement defines another reference period.

It is important to distinguish:

• Actual overtime: genuinely performed beyond 35 hours, with explicit or implicit agreement from the employer;

• Contractual overtime: provided for in the employment contract for employees whose weekly duration is set at 37 hours, 39 hours or 40 hours for example.

Annual overtime contingents

The legal overtime contingent is set at 220 hours per year per employee (article L. 3121-30 of the Labour Code), unless a more favourable collective agreement provides otherwise. Beyond this contingent, the employer must compulsorily obtain the opinion of the social and economic committee (SEC) and grant a mandatory rest compensation (MRC) of at least 50% for companies with 20 employees or fewer, and 100% for those with more than 20 employees.

Exceeding this contingent without respecting these obligations exposes the company to proceedings for concealed work. The Certyneo HR solution allows in particular to secure amendments related to schedule modifications and work time modulation agreements.

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Overtime uplift rates in 2026

The reference legal rate

Article L. 3121-36 of the Labour Code sets the legal overtime uplift rate at 25% for the first eight hours beyond 35 hours per week (namely from the 36th to the 43rd hour inclusive), and 50% from the 44th hour onwards.

These rates apply by default in the absence of a collective agreement. They constitute a floor: a branch or company agreement may provide for higher rates, but never lower than 10% (absolute floor provided by law).

| Hours concerned | Legal uplift rate | |---|---| | 36th to 43rd hour | + 25% | | From the 44th hour onwards | + 50% | | In case of agreement (floor) | + 10% minimum |

Contractual rates: increased vigilance

Many collective agreements provide for different rates. By way of example:

• Metalworking (national agreement of 7 February 2022): 25% for the first 8 hours, 50% beyond;

• Construction: rates ranging from 25% to 75% depending on hours and status (ETAM, workers);

• Non-food retail trade: rate of 10% for hours between 35 and 39 hours per derogatory agreement.

It is therefore imperative to consult the applicable collective agreement (identifiable by IDCC code) before any calculation. Breach of the agreement cannot be invoked against the employer in case of dispute.

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Practical calculation methods

Basic formula for the uplifted hourly rate

The calculation starts from the gross hourly base rate (GHBR) of the employee. For a salaried employee, the formula is:

GHBR = Monthly gross salary ÷ (Monthly working duration in hours)

The monthly reference duration is calculated as follows:

Monthly hours = (35h × 52 weeks) ÷ 12 = 151.67 hours/month

Concrete example: an employee receives a monthly gross salary of €2,200 for 35 hours per week.

• GHBR = €2,200 ÷ 151.67 h = €14.51/hour

• 25% uplift: 14.51 × 1.25 = €18.14/hour (from 36th to 43rd hour)

• 50% uplift: 14.51 × 1.50 = €21.77/hour (from 44th hour onwards)

Case of employees on an hourly rate above 35 hours

For an employee whose contract provides for 39 hours per week, the 4 additional weekly hours (36th, 37th, 38th, 39th hour) are said to be structural. They must appear on the payslip with their uplift. The base monthly salary then includes these uplifted hours in the calculation base.

Hours per month for 39h: (39h × 52) ÷ 12 = 169 hours/month

Of which 17.33 monthly overtime hours (169 – 151.67 = 17.33 h/month at 25%).

Replacement of payment by compensatory rest

Article L. 3121-33 of the Labour Code authorises, by collective agreement, the replacement of all or part of the payment of overtime (and its uplift) by compensatory rest of replacement (CRR). This arrangement is popular in sectors with high volumes of overtime (construction, catering, industry), as it does not enter into the basis for calculating social contributions, unlike payment in cash.

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Tax and social regime for overtime in 2026

The fixed deduction for employers

Since the TEPA law (2007), overtime has benefited from an advantageous tax and social regime. In 2026, the provisions in force provide:

For the employee:

• Exemption from income tax within the limit of €7,500 per year (article 81 quater of the CGI, renewed by the 2026 Finance Act);

• Reduction of employee contributions (employee portion of old-age contributions): reduction rate fixed at 11.31% of gross remuneration corresponding to overtime and additional hours.

For the employer:

• Fixed deduction of employer contributions of €1.50 per overtime hour in companies with fewer than 20 employees (deduction maintained in 2026);

• No fixed deduction for companies with 20 or more employees since 2012.

Overtime and the payslip

The payslip must show clearly the overtime, their number, their uplift rate and the applicable exemptions. The absence or inaccuracy of these mentions constitutes an irregularity subject to a fine of €750 per payslip (article R. 3246-1 of the Labour Code). To secure the documentary traceability of contracts containing an hourly rate clause, recourse to electronic signature in the company guarantees the enforceability of HR documents.

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Overtime and work time modulation

Work time arrangement over an extended reference period

The El Khomri law (2016) and the Macron ordinances (2017) strengthened the possibility of arranging work time over a period of up to three years by collective agreement (article L. 3121-44 of the Labour Code). In this context, overtime is identified only at the end of the reference period, and not week by week.

Two conditions apply:

• A company or branch agreement must expressly provide for it;

• The triggering threshold is defined in the agreement (for example, 1,607 annual hours).

This arrangement is particularly used in the tourism, healthcare and agriculture sectors, where activity is cyclical. The document management of these agreements can be dematerialised and electronically signed — see the complete guide to electronic signature to understand the signature levels suited to this type of document.

Hourly and daily rate agreements

Hourly rate agreements (over the week, month or year) allow the employer to pay an employee globally for a volume of hours including pre-identified overtime. These agreements must be provided for by a collective agreement and stipulated in the employment contract.

Daily rate agreements (autonomous managers) escape hourly counting but remain subject to daily rest (11 hours) and weekly rest (35 consecutive hours) rules. In case of exceeding the number of forfeit days, additional rest days or additional remuneration are owed. These forfeit amendments require written formalisation, which the Certyneo AI contract generator can facilitate in compliance with legal requirements.

Legal framework applicable to overtime

The overtime regime is governed by a set of legislative and regulatory texts that must be understood to ensure social compliance of the company.

Labour Code (legislative and regulatory parts):

• Article L. 3121-28: definition of overtime and triggering beyond the legal duration of 35 hours;

• Articles L. 3121-30 to L. 3121-32: annual overtime contingent, mandatory rest compensation (MRC);

• Article L. 3121-33: possibility of replacing payment by compensatory rest of replacement (CRR) by collective agreement;

• Article L. 3121-36: legal uplift rates (25% and 50%), possibility of contractual derogation with 10% floor;

• Article L. 3121-44: work time arrangement over multi-weekly period by agreement;

• Article R. 3246-1: sanctions relating to mandatory payslip entries.

General Tax Code (CGI):

• Article 81 quater: exemption from income tax on overtime within the limit of €7,500 per year.

Law no. 2007-1223 of 21 August 2007 (TEPA law): basis of the exemption and reduction of social contributions on overtime, confirmed and renewed by successive Finance Acts.

Employer obligations: The employer is required to precisely count the actual working time of each employee (article L. 3171-2 of the Labour Code) and to make this count available to the labour inspectorate. In case of URSSAF inspection, it is up to the employer to prove that the hours declared are correct. The failure to count presumes that the hours claimed by the employee are genuine.

Legal risks:

• URSSAF adjustment for incorrect application of reduction or exemption rates;

• Salary recovery in case of insufficient uplift, with a 3-year statute of limitations for wage claims (article L. 3245-1 of the Labour Code);

• Qualification as concealed work (article L. 8221-5 of the Labour Code) in case of deliberate absence of count, exposing to a penalty of minimum 6 months gross salary;

• Damages in case of non-compliance with the contingent and absence of MRC.

The preservation of modulation agreements, contracts incorporating forfeit clauses and associated payslips in an unfalsifiable electronic format constitutes a good compliance practice, in line with the requirements of article 1366 of the Civil Code relating to electronic writing.

Concrete usage scenarios

Scenario 1 — Industrial SME with 45 employees and recurring overtime

An SME in the precision engineering sector employs 45 operators and technicians. Every year, between September and January, production demand requires on average 6 hours of overtime per week per employee. The company had so far applied a flat rate of 25% on all hours, without distinguishing hours beyond the 43rd weekly hour.

Following an URSSAF inspection, the inspector identifies that hours worked beyond the 43rd hour should have been uplifted at 50%. The adjustment covers 3 years of payroll, a sum approaching €38,000 in contributions and late payment surcharges. By implementing an hourly tracking system and dematerialising schedule modification amendments via electronic signature, the company now secures the traceability of signed agreements and reduces its adjustment risk.

Scenario 2 — Accounting firm with 18 employees

An accounting firm manages payroll for several dozen SME/SMBs. During the tax period (March–June), firm employees perform between 8 and 12 hours of overtime per week. The firm has concluded a company agreement providing for a derogatory rate of 10% for the first 8 hours and 25% beyond.

Thanks to the implementation of an hourly annualisation system coupled with automatic amendment generation via an AI contract generator, the firm reduces by 60% the administrative processing time for contractual modifications. The savings on the payroll linked to the device for replacement by compensatory rest represent approximately 12% of seasonal payroll costs.

Scenario 3 — Personal services company with work time arrangement

A personal care services organisation employing 90 care assistants applies a 12-month modulation agreement. In high summer season, some employees exceed 45 hours per week, while in low season they work only 25 hours. At the end of the annual reference period, the count shows 180 overtime hours for 30% of employees.

The company had initially failed to calculate uplifts on the basis of hours worked beyond the 43rd hour during peaks. After support from a specialist HR firm, it restructures its tracking system and dematerialises all work time arrangement contracts. Recourse to the Certyneo HR solution allows it to centralise signatures and maintain a timestamped history of agreements, essential in case of employment tribunal dispute.

Conclusion

The calculation of overtime is based on precise rules: legal rates of 25% and 50%, an annual contingent of 220 hours, tax exemption capped at €7,500, and a fixed employer deduction in small businesses. Ignorance of these rules — particularly contractual rates — exposes the employer to costly adjustments and employment tribunal disputes over 3 years' statute of limitations. The dematerialisation of HR documents related to work time (amendments, modulation agreements, forfeits) is today an essential lever for compliance.

Certyneo supports you in securing your HR documents through an eIDAS-compliant electronic signature solution, simple to deploy and suited to SMEs and large groups alike. Discover our pricing and start free or test the ROI calculator to measure concrete gains for your organisation.