Overtime: rates and calculation

Introduction

Overtime is one of the most frequently misunderstood subjects in French employment law. Yet incorrect calculation exposes the employer to URSSAF corrections, labour disputes and significant financial penalties. Whether you are an HR 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 Labour Code, overtime constitutes all hours of effective work carried out beyond the legal weekly duration, set 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.

A distinction should be made between:

• Actual overtime hours: genuinely accomplished beyond 35 hours, with the explicit or implicit consent of the employer;

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

Annual contingents of overtime hours

The legal contingent of overtime hours is set at 220 hours per year per employee (article L. 3121-30 of the Labour Code), unless a more favourable collective agreement applies. Beyond this contingent, the employer must obligatorily seek the opinion of the social and economic committee (CSE) and grant a mandatory compensatory rest (COR) 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 legal action for concealed work. The Certyneo HR solution notably makes it possible to secure amendments relating to changes in working hours and agreements for working time modulation.

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Overtime uplift rates in 2026

The legal reference rate

Article L. 3121-36 of the Labour Code sets the legal rate of overtime uplift at 25% for the first eight hours beyond the 35-hour weekly duration (i.e. 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 minimum: a sector or company agreement can provide for higher rates, but never lower than 10% (absolute minimum provided by law).

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

Conventional 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% thereafter;

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

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

It is therefore imperative to consult the applicable collective agreement (identifiable by the IDCC code) before any calculation. Failure to comply with the agreement cannot be relied upon against the employer in the event of a dispute.

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Practical calculation methods

Basic formula for the uplifted hourly rate

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

THBB = Monthly gross salary ÷ (Monthly working time 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.

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

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

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

Case of employees on hourly forfeit greater than 35 hours

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

Annualised hours for 39 hours: (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 a compensatory rest (RCR). This scheme is popular in sectors with a high volume of overtime (construction, catering, industry), as it does not form part of the basis for calculating social contributions, unlike cash payments.

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Tax and social regime of overtime in 2026

The employer's flat-rate deduction

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 Law);

• Reduction of employee contributions (employee share of pension contributions): reduction rate set at 11.31% of gross remuneration corresponding to overtime and additional hours.

For the employer:

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

• No flat-rate deduction for companies with 20 or more employees since 2012.

Overtime and the payslip

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

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Overtime and working time modulation

Adjustment of working time over an extended reference period

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

Two conditions apply:

• A company or sector agreement must explicitly provide for it;

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

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

Forfeits in hours and days

Hourly forfeit conventions (on a weekly, monthly or annual basis) allow the employer to remunerate an employee globally for a volume of hours including pre-identified overtime hours. These conventions must be provided for by a collective agreement and stipulated in the employment contract.

Day forfeits (autonomous executives) escape hourly counting but remain subject to daily rest rules (11 hours) and weekly rest (35 consecutive hours). In the event of a breach of the number of forfeited days, additional rest days or supplementary remuneration are due. 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 which must be mastered to ensure the social compliance of the company.

Labour Code (legislative and regulatory part):

• 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 compensatory rest (COR);

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

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

• Article L. 3121-44: adjustment of working time over multi-week period by agreement;

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

General Tax Code (CGI):

• Article 81 quater: exemption from income tax for overtime within the limit of €7,500 annually.

Law n° 2007-1223 of 21 August 2007 (TEPA law): foundation of the exemption and social contribution reduction scheme for overtime, confirmed and renewed by successive Finance Laws.

Employer obligations: The employer is required to accurately count the effective working time of each employee (article L. 3171-2 of the Labour Code) and to make this count available to the labour inspectorate. In the event of URSSAF inspection, it is up to the employer to prove that the hours declared are accurate. The failure to count creates a presumption that the hours claimed by the employee are real.

Legal risks:

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

• Salary repayment in case of insufficient uplift, with a prescription period of 3 years for salary claims (article L. 3245-1 of the Labour Code);

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

• Damages in the event of non-compliance with the contingent and absence of COR.

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

Practical usage scenarios

Scenario 1 — Industrial SME with 45 employees with recurring overtime

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

Following URSSAF inspection, the inspector identifies that hours worked beyond the 43rd hour should have been uplifted by 50%. The correction covers 3 years of payroll, bringing to approximately €38,000 in contributions and default penalties. By implementing an hourly counting system and dematerialising amendments to working hours via electronic signature, the company now secures the traceability of signed agreements and reduces its correction risk.

Scenario 2 — Accountancy firm with 18 employees

An accountancy firm manages payroll for several dozen SME clients. During the tax period (March–June), the firm's employees work between 8 and 12 hours 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.

By implementing an annualised hours system coupled with automatic amendment generation via an AI contract generator, the firm reduces administrative processing time for contractual changes by 60%. Savings on the payroll relating to the compensatory rest replacement scheme represent approximately 12% of seasonal salary costs.

Scenario 3 — Personal services company with working time adjustment

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

The company had initially failed to calculate uplifts on the basis of hours worked in excess of the 43rd hour during peaks. After support from a specialised HR firm, it restructures its monitoring system and dematerialises all working time adjustment contracts. The use of the Certyneo HR solution allows it to centralise signatures and maintain a time-stamped history of agreements, essential in the event of labour dispute.

Conclusion

The calculation of overtime is based on precise rules: legal rates of 25% and 50%, annual contingent of 220 hours, tax exemption capped at €7,500, and employer flat-rate deduction in small companies. Failure to comply with these rules — particularly conventional rates — exposes the employer to costly corrections and labour disputes over 3 years of prescription. The dematerialisation of HR documents relating to working 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 adapted to SMEs as well as large groups. Discover our rates and start free of charge or test the ROI calculator to measure concrete gains for your organisation.