Overtime: Rate Increase and Legal Calculation 2026

The management of overtime represents a major issue for HR and payroll departments. Between labor code obligations, collective agreement provisions and specific aspects related to actual work time, payroll managers must master a precise legal framework to avoid any labor dispute litigation. This article details the applicable rules in 2024.

Legal definition of overtime

According to article L3121-28 of the Labor Code, an overtime hour is any hour worked beyond the legal weekly duration of 35 hours, at the employer's request or with implicit agreement. Overtime is counted by calendar week (Monday 0am to Sunday 24pm), unless a collective agreement provides for another reference period.

It is essential to distinguish overtime from additional hours, the latter concerning only part-time employees. Furthermore, only actual working time is counted: break time, commute time or absences (even paid) are not counted, except as provided by collective agreements.

Applicable rate increases

Article L3121-36 of the Labor Code sets the legal rates of increase:

• 25% for the first 8 overtime hours (from the 36th to the 43rd hour inclusive)

• 50% from the 44th weekly hour onwards

A company, establishment or industry agreement may provide for a different rate, but no less than 10%. The increase may be replaced, in whole or in part, by equivalent compensatory rest (RCE) according to article L3121-37.

Beyond the annual contingent of overtime hours (220 hours by default according to article D3121-24), each hour entitles the employee to mandatory compensatory rest: 50% for companies with 20 employees or fewer, 100% beyond that.

Practical calculation method

The calculation of overtime is carried out in several stages:

• Determine the base hourly rate: gross monthly salary ÷ 151.67 hours (legal monthly duration)

• Identify the number of overtime hours per week

• Apply the corresponding rate increases

• Include remuneration elements: premiums related to the nature of work, individual performance bonuses

Overtime benefits from a reduction in employee social contributions (TEPA law) and an exemption from income tax within the limit of €7,500 per year (article 81 quater of the Tax Code).

Employer obligations

The employer must keep an accurate record of working time (article D3171-8) via a time-tracking system, signed attendance sheets or HR software. These documents must be kept for 3 years and presented to the labor inspection authority on demand. Failure to pay overtime can result in a salary claim over 3 years (article L3245-1) accompanied by damages for undeclared work (6 months of salary).