Overtime: Salary Increase and Legal Calculation

Introduction

Overtime is a central subject in French labour law. Whether it is an employer wishing to optimise their payroll or an employee wishing to know their rights, mastering the rules of salary increase and legal calculation of overtime is essential. Governed by the Labour Code, these hours follow a precise regime: increase rates, annual quota, tax and social exemptions, compensatory rest. This article reviews the entire system applicable in 2026, based on current legislation and the latest regulatory developments.

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Definition and scope of overtime

What is an hour of overtime?

According to article L.3121-28 of the Labour Code, any hour worked beyond the legal weekly working time — set at 35 hours — constitutes an hour of overtime. This threshold is assessed on a calendar week (from Monday 0:00 to Sunday 24:00) unless a collective agreement provides for another reference period.

Attention: only hours requested or accepted by the employer fall within this framework. An hour worked spontaneously, without the agreement of management, may be reclassified, but the employer cannot systematically rely on this argument if the hours worked were necessary to carry out the tasks assigned.

Employees covered and exclusions

The overtime regime applies to full-time employees subject to the legal duration or a contractual duration of less than 35 hours. Those excluded are:

• Senior managers (article L.3111-2 of the Labour Code);

• Employees on an annual day-based salary (article L.3121-58);

• Self-employed workers.

For part-time employees, hours worked beyond the contractual duration are additional hours, subject to a distinct regime.

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Legal increase rates applicable in 2026

The two increase tiers

The legal overtime increase rate is set out in article L.3121-36 of the Labour Code:

• 25% increase for the first 8 hours of overtime per week (from the 36th to the 43rd hour);

• 50% increase from the 9th hour of overtime (from the 44th hour onwards).

These rates constitute the legal minimum. A sectoral or company agreement may provide for higher rates, but never lower (a standard sectoral agreement may however reduce the rate for the first 8 hours to a minimum of 10%, according to article L.3121-33).

Concrete calculation example

Let us take an employee whose gross hourly salary is €15 and who works 42 hours in the week:

• Normal hours (35h): 35 × €15 = €525

• Overtime hours from 36th to 42nd (7h) at +25%: 7 × €15 × 1.25 = €131.25

• Total gross weekly: €656.25

If this same employee works 46 hours:

• 35h normal: €525

• 36th to 43rd (8h) at +25%: 8 × €15 × 1.25 = €150

• 44th to 46th (3h) at +50%: 3 × €15 × 1.50 = €67.50

• Total gross weekly: €742.50

Replacement by equivalent compensatory rest

The employer may, under certain conditions, replace all or part of the increased payment with replacement compensatory rest (RCR), in accordance with article L.3121-37. This rest must be equivalent to the increased remuneration: for one hour at 25%, the rest granted is 1h15; for one hour at 50%, it is 1h30.

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The annual overtime quota

Definition of the quota

The annual quota represents the maximum number of hours of overtime that an employee can perform over a calendar year without prior administrative authorisation. It is set by collective agreement or, failing that, by decree.

In the absence of an agreement, the regulatory quota is 220 hours per year (article D.3121-24 of the Labour Code). A collective agreement may adjust this volume upwards or downwards.

Exceeding the quota

Hours worked beyond the quota are possible but grant the right, in addition to the salary increase, to a mandatory rest compensation (COR):

• 50% of the hours exceeding the quota in companies with 20 or fewer employees;

• 100% in companies with more than 20 employees.

These rest entitlements must be taken within two months of their acquisition and their rigorous management is now facilitated by compliant HR management tools, notably through the dematerialisation of time tracking documents.

Monitoring and traceability: the issue of evidence

The employer is required to ensure individual time tracking (article L.3171-4). In the event of an employment tribunal dispute, the burden of proof is shared: the employee must present sufficiently precise elements, and the employer must refute them with its own records. Dematerialisation and electronic signature of time sheets strengthen the probative value of these documents, as highlighted in our comprehensive guide to electronic signature.

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Tax and social regime for overtime

Income tax exemption

Since the TEPA law of 2007, continued and reinforced by the law of 16 August 2022 (purchasing power law), remuneration received for overtime is exempt from income tax up to €7,500 per year (article 81 quater of the General Tax Code).

In practice, an employee who receives €3,000 for overtime in the year will pay no tax on this amount, regardless of their marginal tax bracket.

Reduction in employee contributions

Overtime also benefits from a flat-rate reduction in employee contributions (excluding illness and maternity contributions payable by the employee) up to the amount exempt from income tax. In practice, the reduction rate applicable in 2026 is 11.31% for companies with fewer than 50 employees and 11.31% also for larger ones (harmonised rate since 2019).

Impact on SMIC calculation and compensation

Overtime is taken into account in the calculation of SMIC: the employer must ensure that the total remuneration, including overtime, is at least equal to the increased hourly SMIC. On the other hand, for the calculation of redundancy, notice or paid leave compensation, only the usual remuneration (excluding exceptional overtime) is generally retained, unless a more favourable agreement. The dematerialised management of these elements via a electronic signature solution for HR makes it possible to secure the entire document chain.

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Employer obligations and non-compliance risks

Information and consultation of the Works Council

An employer wishing to regularly resort to overtime must inform the Works Council (CSE) in companies with more than 11 employees. This information concerns the expected volume, the services concerned and the compensation measures.

Furthermore, any collective agreement modifying the quota or increase rates must be negotiated with union representatives and filed with the DREETS (formerly DIRECCTE). The signature of these agreements is now commonly carried out in electronic format, in accordance with the eIDAS Regulation which guarantees their legal value across Europe.

Sanctions in case of non-compliance

Non-payment or reduction of the increases due constitutes a hidden work offence punishable by a fine of €45,000 and 3 years imprisonment for natural persons (article L.8224-1 of the Labour Code). The URSSAF may carry out a rectification covering the last 3 years.

Practices such as informal "recovery" of overtime through informal days off, or the absence of precise accounting, expose the employer to employment tribunal convictions with back pay plus increases and damages.

Archiving and retention of documents

The employer is required to keep time records and payslips for 5 years (prescription for wages, article L.3245-1). Dematerialisation of these documents, combined with qualified electronic signature, guarantees their integrity and enforceability in the event of inspection or dispute, as detailed in our guide to electronic signature in business.

Legal framework applicable to overtime

The overtime regime is based on a dense legislative and regulatory framework that must be mastered to ensure full compliance.

Labour Code — key provisions

• Article L.3121-28: definition of overtime beyond 35 weekly hours.

• Articles L.3121-33 to L.3121-37: legal increase rates (25% and 50%), possibility of replacement compensatory rest, role of collective agreements.

• Article L.3121-38: annual quota and mandatory rest compensation.

• Article D.3121-24: setting the regulatory quota at 220 hours in the absence of an agreement.

• Article L.3171-4: obligation to track working time and probative value of records.

• Articles L.8221-1 and L.8224-1: definition and sanctions for hidden work.

• Article L.3245-1: five-year prescription period for wage claims.

General Tax Code

• Article 81 quater: exemption from income tax on overtime remuneration up to €7,500 per year.

Law No. 2022-1158 of 16 August 2022 (law introducing emergency measures to protect purchasing power): increase in the tax and social exemption ceiling, maintenance of the flat-rate reduction in employee contributions.

Probative value of electronic documents

The dematerialisation of time sheets, payslips and collective agreements falls within the scope of Regulation eIDAS No. 910/2014 (and its eIDAS 2.0 revision currently being transposed), which gives equivalent legal value to qualified electronic signatures and their documents throughout the European Union. In French law, article 1366 of the Civil Code establishes the principle of equivalence between electronic and paper documents, provided that the identity of the author is duly guaranteed and the document is kept in conditions ensuring its integrity. Article 1367 specifies the requirements for electronic signature.

GDPR No. 2016/679: working time data constitute personal data. The employer is responsible for processing and must guarantee their security, minimisation and define a retention period consistent with the requirement (5 years for payslips). Any HR management or electronic signature service provider acting on behalf of the employer is a processor within the meaning of article 28 of the GDPR, bound by a documented data processing agreement.

In the event of URSSAF inspection or labour inspection, the production of intact and timestamped electronic documents constitutes admissible and robust evidence, provided that the solution used complies with ETSI EN 319 132 standards relating to advanced electronic signature formats (XAdES, PAdES).

Usage scenarios: managing overtime and dematerialisation

Scenario 1 — An industrial SME with 80 employees during a high-activity period

An SME in the manufacturing sector, employing 80 operators on 2x8 shifts, faces a peak in orders in the last quarter. It plans 6 to 8 hours of overtime per week per employee for 10 weeks. Without a dematerialised tracking tool, the HR department juggles between Excel sheets, hand-signed paper slips and payslips corrected afterwards.

By deploying an integrated time management solution with an electronic signature module, the SME enables each team leader to electronically validate weekly sheets in less than 2 minutes. The data feeds directly into the payroll software, reducing data entry errors by 70% (range observed in industrial SMEs according to ANDRH sector reports 2024). The HR department saves approximately 15 hours of administrative processing per month.

Scenario 2 — A consulting engineering firm with 25 employees

A consulting firm employs non-executive engineers subject to the legal duration. During intense project phases, some employees regularly exceed 43 working hours per week. Management must imperatively distinguish the hours covered by the quota from the hours giving rise to mandatory rest compensation (COR).

Through a document generator and dematerialisation of temporary amendments, the firm formalises each request for overtime exceeding the quota through an amendment signed electronically, with certified timestamping. In the event of URSSAF inspection or employment tribunal dispute, each hour is traceable and the probative value of the documents is irreproachable. The processing time for requests falls from 3 days (letter, scan, return) to less than 4 hours.

Scenario 3 — A distribution group with 350 employees in multi-site management

A distribution network comprising about ten points of sale and approximately 350 employees must centralise the monitoring of overtime on variable schedules. The multiplicity of sites and area managers generates inconsistencies in the reporting of hours, exposing the retailer to recurring URSSAF adjustments.

The integration of a SaaS electronic signature platform enables site managers to digitally validate daily records, with automatic alerts sent when the 220-hour annual threshold approaches for an employee. The head office benefits from a consolidated real-time dashboard. Result: reduction of 85% of payroll anomalies related to overtime during the first two quarters of deployment, and near-total elimination of disputes related to increase calculation errors.

Conclusion

Overtime follows a precise legal framework: 25% and 50% increase rates, an annual quota of 220 hours, tax and social exemptions capped at €7,500, mandatory rest compensation for overages. Each employer must ensure rigorous traceability of hours worked to avoid URSSAF adjustments and employment tribunal disputes.

Dematerialisation of time tracking documents — weekly sheets, amendments, collective agreements — now represents the best guarantee of compliance and operational efficiency. Certyneo supports you in this transition with a B2B electronic signature solution compliant with eIDAS, specifically designed for HR and legal teams.

Ready to secure the management of your HR documents? Discover Certyneo pricing and start your free trial today.