CDD precarity bonus: calculation, reduced rate and exclusions

Quick answer. The precarity bonus, or end-of-contract indemnity, equals 10% of the total gross remuneration paid during the fixed-term contract (article L1243-8 of the Labour Code). This base includes salary, bonuses, allowances and benefits in kind subject to contributions, but it excludes professional expenses and the compensatory paid-leave indemnity, which is calculated separately and added on top. The rate can be lowered to 6% by collective agreement, and the indemnity is not due in several cases (seasonal work, usage contract, gross misconduct, refusal of a permanent role).

At the end of every fixed-term contract, the same question comes up when preparing the final settlement: how much to pay, on what base, and does the paid-leave indemnity enter the calculation? The most common error we correct in payroll files is mixing the precarity bonus with the paid-leave indemnity, which inflates or understates the net amount paid to the employee. Here is the exact method, the exceptions to check and the payroll treatment, in line with the rules in force in spring 2026.

The precarity bonus is an end-of-contract indemnity paid to an employee on a fixed-term contract (CDD) to offset the precarious situation the contract places them in. It is set out in article L1243-8 of the Labour Code. The principle is simple: when the contract ends and does not lead to a permanent contract (CDI), the employee receives, on top of their final salary, an indemnity calculated on their overall remuneration.

It should not be confused with the compensatory paid-leave indemnity. These are two distinct indemnities with different logics: one offsets the precarious status, the other settles leave earned but not taken. Both appear on the final payslip and the settlement receipt, but they are not calculated on the same base.

The default rate is 10% of the total gross remuneration paid over the whole duration of the contract, renewals included. Article L1243-8 sets this rate.

What the 10% base includes#

The calculation base, confirmed by URSSAF, gathers all sums and benefits subject to social contributions:

• base salary and overtime or additional hours;
• bonuses and allowances paid during the contract (seniority bonus, prorated year-end bonus, target bonus, etc.);
• residence allowance and family supplement where applicable;
• benefits in kind subject to contributions (vehicle, housing, meals).

What the 10% base excludes#

This is where the most widespread error lies. The 10% base does not include the compensatory paid-leave indemnity. According to URSSAF and service-public.fr, total gross remuneration is taken before paid leave: the paid-leave indemnity is calculated separately and added afterwards, it does not increase the precarity base.

Also excluded are:

• reimbursements of professional expenses (mileage allowances, meal costs, actual expenses);
• sums not subject to social contributions.

Worked example#

An employee received, during a six-month fixed-term contract, EUR 18,000 of gross remuneration subject to contributions (salary and bonuses), excluding paid leave and professional expenses.

• Precarity bonus: EUR 18,000 x 10% = EUR 1,800.
• Compensatory paid-leave indemnity: calculated separately, for example as one tenth of total remuneration including leave, then added to the final settlement.

The two indemnities add up, but are never calculated one on top of the other.

Article L1243-9 of the Labour Code allows a reduced rate of 6% instead of 10%. This rate is not automatic: it must be provided for by a branch collective agreement, or by a company or establishment agreement.

The reduction is valid only if it comes with a real benefit for the employee, in particular priority access to vocational training (for example a skills assessment or skills-development actions). Without that benefit, the 10% rate remains due.

Our view. Before applying 6%, always check the applicable collective agreement and the actual existence of the training benefit. Applying 6% without a valid agreement means underpaying the employee: this exposes you to an indemnity top-up, additional contributions and, in the event of litigation, potential damages.

Article L1243-10 of the Labour Code lists the situations where the end-of-contract indemnity is not paid. The main cases to check before preparing the settlement are:

1. Seasonal CDD or usage contract in the sectors where this type of contract is allowed.
2. Contract concluded with a young person during their school or university holidays.
3. The employee's refusal of a permanent contract for the same job, or a similar job with at least equivalent pay.
4. Early termination by the employee, gross misconduct or force majeure.
5. Continuation as a permanent contract at the end of the CDD: there is then no end of contract triggering the indemnity.
6. Certain assisted contracts or specific statutory contracts.

The underestimated risk. The least well documented exclusion in payroll files is the refusal of a permanent contract. To deprive the employee of the bonus, the permanent offer must be formalised in writing, cover an identical or similar job and provide for at least equivalent pay. A verbal or vague offer is not enough: in a dispute, it is the employer who must prove the offer and its equivalence.

The precarity bonus is a salary supplement. As such, it is subject to social contributions, CSG-CRDS and income tax. It carries no specific exemption, unlike certain termination indemnities.

In practice#

Here is the sequence we apply on the final payslip:

1. Calculate the total gross remuneration subject to contributions, excluding paid leave and professional expenses.
2. Apply the rate (10% or 6% per the applicable agreement) to obtain the precarity bonus.
3. Calculate the compensatory paid-leave indemnity separately.
4. Show both indemnities on separate lines of the payslip and the settlement receipt.
5. Subject the precarity bonus to contributions, CSG-CRDS and pay-as-you-earn withholding.
6. Report everything in the DSN and archive the calculation detail.

Rigorous payroll-software configuration prevents most errors. If you entrust us with payroll and final-settlement processing, we systematically check the base, the rate and consistency with the collective agreement. Correct payroll software configuration secures the calculation month after month.

• Renewed replacement CDD: the bonus is calculated on the total remuneration of the period, renewals included.
• CDD turned into a CDI during the assignment: there is no end of contract, hence no precarity bonus, but the CDD seniority is carried over for leave rights.
• Reclassification of the CDD into a CDI by the labour court: reclassification does not cancel the precarity bonus already paid and opens a separate reclassification indemnity. To frame the risk upstream, see the CDD rules and reclassification risk.

• The precarity bonus equals 10% of the total gross remuneration of the CDD (article L1243-8).
• The base includes salary, bonuses, allowances and benefits in kind subject to contributions, and excludes the compensatory paid-leave indemnity and professional expenses.
• The paid-leave indemnity is calculated separately and added on top; it never inflates the 10% base.
• The rate can be lowered to 6% by collective agreement with a genuine training benefit (article L1243-9).
• The indemnity is not due in several cases (seasonal work, usage contract, gross misconduct, refusal of an equivalent permanent role, hiring on a CDI): article L1243-10.
• The bonus is subject to contributions, CSG-CRDS and income tax.