Overtime: rates and calculation

Introduction

Overtime is one of the most frequently misunderstood topics in French labor law. Yet, incorrect calculation exposes the employer to URSSAF adjustments, labor disputes and significant financial penalties. Whether you are an HR director, SME manager or payroll manager, understanding precisely the overtime increase 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 conventional specificities to monitor.

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Definition and triggering of overtime

What is overtime?

According to article L. 3121-28 of the Labor Code, overtime constitutes all hours of effective work accomplished beyond the legal weekly duration, set at 35 hours for full-time employees subject to the general scheme. This rule applies to calendar weeks (Monday 00:00 to Sunday 24:00), unless a company agreement defines another reference period.

A distinction should be made between:

• Effective overtime: actually completed beyond 35 hours, with the explicit or implicit agreement of the employer;

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

Annual overtime contingents

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

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

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Overtime increase rates in 2026

The legal reference rate

Article L. 3121-36 of the Labor Code sets the legal overtime increase rate at 25% for the first eight hours beyond the 35-hour weekly legal duration (from the 36th to the 43rd hour inclusive), and 50% from the 44th hour.

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

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

Conventional rates: heightened vigilance

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

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

• Construction: rate varying 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 by derogating agreement.

It is therefore imperative to consult the applicable collective agreement (identifiable by IDCC code) before any calculation. Failure to comply with the agreement is not opposable to the employer in case of dispute.

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Practical calculation methods

Basic formula for the increased hourly rate

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

THBB = Monthly gross salary ÷ (Monthly working hours)

The monthly reference period is calculated as follows:

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

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

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

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

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

Case of employees with hourly salary higher 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 pay slip with their increase. The basic monthly salary then incorporates these increased hours in the calculation base.

Annualized hours for 39 hours: (39 hours × 52) ÷ 12 = 169 hours/month

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

Replacement of payment by compensatory rest

Article L. 3121-33 of the Labor Code authorizes, by collective agreement, the replacement of all or part of the payment of overtime (and its increase) by a rest compensation replacement (RCR). This system is popular in sectors with high volumes of overtime (construction, hospitality, manufacturing), as it is not included in the calculation base for social contributions, unlike monetary payment.

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Tax and social regime of overtime in 2026

The flat 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:

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

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

Overtime and the pay slip

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

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Overtime and work time modulation

Work time management over an extended reference period

The El Khomri law (2016) and the Macron ordinances (2017) strengthened the possibility of managing work time over a period of up to three years by collective agreement (article L. 3121-44 of the Labor 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 tourism, healthcare and agriculture sectors, where activity is cyclical. The document management of these agreements can be dematerialized and electronically signed — see the complete guide to electronic signature to understand the signature levels adapted to this type of document.

Hourly and daily salary forfaits

Hourly salary agreements (over the week, month or year) allow the employer to remunerate globally an employee 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 forfaits (autonomous executives) escape hourly accounting but remain subject to daily rest rules (11 hours) and weekly rest (35 consecutive hours). In case of exceeding the number of forfait days, additional rest days or supplementary remuneration are owed. These salary amendments require written formalization, which the AI-powered contract generator from Certyneo 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 mastered to ensure the company's social compliance.

Labor 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 rest compensation (COR);

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

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

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

• Article R. 3246-1: sanctions relating to mandatory pay slip mentions.

General Tax Code (CGI):

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

Law No. 2007-1223 of August 21, 2007 (TEPA law): foundation of the exemption and social contribution reduction system on overtime, confirmed and renewed by successive finance laws.

Employer obligations: The employer is required to precisely count the actual working time of each employee (article L. 3171-2 of the Labor Code) and to make this count available to the labor inspection. In case of URSSAF inspection, it is up to the employer to prove that the reported hours are accurate. The failure to count time raises the presumption that hours claimed by the employee are real.

Legal risks:

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

• Salary restatement in case of insufficient increase, with prescription of 3 years for wage claims (article L. 3245-1 of the Labor Code);

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

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

The retention of modulation agreements, contracts incorporating salary clause and associated pay slips in an unfalsifiable electronic format constitutes good compliance practice, consistent with the requirements of article 1366 of the Civil Code relating to electronic writing.

Concrete usage scenarios

Scenario 1 — 45-employee industrial SME with recurring overtime

An SME in the precision mechanics sector employs 45 operators and technicians. Each year, between September and January, production load imposes 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 a URSSAF inspection, the inspector identifies that hours worked beyond the 43rd hour should have been increased by 50%. The adjustment covers 3 years of payroll, totaling approximately €38,000 in contributions and late payment penalties. By implementing hourly tracking software and dematerializing schedule modification amendments via electronic signature, the company now secures the traceability of signed agreements and reduces its adjustment risk.

Scenario 2 — 18-employee accounting firm

An accounting firm manages payroll for dozens of SME/TPE clients. During the fiscal period (March–June), the firm's employees work between 8 and 12 hours of overtime per week. The firm concluded a company agreement providing for a derogating rate of 10% for the first 8 hours and 25% beyond.

Thanks to the implementation of an annual hours system coupled with automatic amendment generation via an AI-powered contract generator, the firm reduces administrative processing time for contract modifications by 60%. Savings on payroll related to the rest compensation replacement system represent approximately 12% of seasonal payroll costs.

Scenario 3 — Personal service company with work time management

A personal care services structure 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 hours of overtime for 30% of employees.

The company had initially failed to calculate increases based on hours worked beyond the 43rd hour during peaks. After guidance by a specialized HR firm, it restructures its monitoring system and dematerializes all work time management contracts. The use of the Certyneo HR solution allows it to centralize signatures and maintain a time-stamped history of agreements, essential in case of labor dispute.

Conclusion

Overtime calculation is based on precise rules: legal rates of 25% and 50%, annual contingent of 220 hours, tax exemption capped at €7,500, and flat employer deduction in small businesses. Failure to comply with these rules — particularly conventional rates — exposes the employer to costly adjustments and labor disputes over 3 years of prescription. Dematerialization of HR documents related to working time (amendments, modulation agreements, salary forfaits) is today an essential compliance lever.

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 pricing and start for free or test the ROI calculator to measure concrete gains for your organization.