Mutual termination of a French CDI 2026: procedure, severance pay and taxation

Quick answer. The mutual termination agreement (rupture conventionnelle) of a French permanent employment contract (CDI) follows in 2026 a procedure laid down by articles L. 1237-11 to L. 1237-16 of the French Labour Code: one or more meetings, a signed agreement, a 15-calendar-day cooling-off period, then administrative validation by the DREETS within 15 business days. The minimum severance is equal to the statutory severance indemnity (1/4 month per year of service for the first 10 years and 1/3 month beyond), and the employer pays a single contribution of 30 % on the portion exempt from social security contributions since 1 September 2023.

Introduced by the law of 25 June 2008, the individual mutual termination agreement (rupture conventionnelle individuelle, RCI) has become the leading amicable way to end a French permanent contract: the Dares statistical office records more than 500,000 validated agreements every year since 2019, accounting for nearly one third of CDI exits other than resignations. The 2023 unemployment-insurance reform deeply changed the financial equation on the employer side: since 1 September 2023, the old 20 % social levy has been replaced by a single 30 % contribution on the portion of the severance pay exempt from social security contributions (article 4 of law n° 2023-270 of 14 April 2023).

In 2026 the legal framework is unchanged, but the tax environment has tightened: the flat tax stays at 30 % on capital income, the annual social security ceiling (PASS) is raised to about EUR 47,100 per year under the revaluation order, and case law from the French Supreme Court (Cour de cassation) has confirmed several safeguards (informed consent of the employee, nullity in case of moral pressure, articulation with sick leave). At Hayot Expertise, we handle around thirty RCI files per year for Paris-based SMEs; we observe that the true total cost (severance + employer contribution + impact on unemployment benefit) is miscalculated in 8 files out of 10.

The mutual termination agreement is defined by article L. 1237-11 of the French Labour Code as the procedure allowing the employer and the employee to agree by mutual consent on the conditions for ending the indefinite-duration contract that binds them. It is exclusively reserved for permanent employment contracts (CDI): a fixed-term contract (CDD), an apprenticeship contract or a mission contract cannot be terminated through this mechanism.

Four principles structure the scheme:

• Free bilateral agreement: neither the employer nor the employee may impose the termination; consent must be informed and free from defects.
• Formal procedure: preliminary meetings, written agreement (Cerfa form 14598*01), cooling-off period, administrative validation.
• Guaranteed severance: an amount at least equal to the statutory or collective-agreement severance indemnity.
• Right to ARE: the employee receives the standard unemployment allowance, which distinguishes the RCI from a plain resignation.

The RCI is separate from the collective mutual termination agreement (rupture conventionnelle collective, RCC) (articles L. 1237-19 to L. 1237-19-14), which rests on a majority collective agreement and concerns a defined number of volunteer employees. Our arbitrage entre licenciement économique et rupture conventionnelle details the cases in which one or the other scheme is preferable.

The procedure unfolds in five enforceable steps, the breach of any of which may result in the nullity of the agreement.

1. One or more preliminary meetings#

At least one meeting must be held between the employer and the employee to define the terms of the termination (effective date, severance amount, treatment of variable pay items). No specific formality is required for the convocation, but we recommend a written notice mentioning the option to be assisted.

Each party may be assisted:

• the employee, by a member of staff or, in companies with no staff representatives, by an employee adviser registered on the prefectural list;
• the employer, under the same conditions and only if the employee has used this option as well.

2. Signature of the agreement (Cerfa 14598)#

The agreement is drawn up on Cerfa form 14598*01 (RCI for ordinary employees) or Cerfa 14599*01 (RCI for protected employees), accessible via the official TéléRC online service. It specifies:

• the identity of the parties and the reference remuneration;
• the gross amount of the specific severance pay;
• the proposed termination date, at the earliest the day after administrative validation;
• any ancillary terms (waiver of non-compete clause, dispensation from notice, etc.).

It is drawn up in two original copies, one of which must be handed to the employee — failure to hand over a copy is sanctioned with nullity (Cass. soc., 6 February 2013, n° 11-27.000).

3. The 15-calendar-day cooling-off period#

Article L. 1237-13 paragraph 3 opens to each party a withdrawal period of 15 calendar days running from the day after signature. The withdrawal is notified by registered letter with acknowledgement of receipt (LRAR) or hand-delivered against a receipt. No reason is required; the withdrawal renders the agreement void.

4. Administrative validation by the DREETS#

After expiry of the cooling-off period, the most diligent party submits the validation request to the DREETS (regional directorate for the economy, employment, labour and solidarities). Since 2022, the TéléRC online procedure has been mandatory for ordinary agreements.

The DREETS has 15 business days to:

• either expressly validate the agreement;
• or refuse it with reasons if the validity conditions are not met (cooling-off period not respected, severance below the statutory minimum, apparent vitiated consent);
• or remain silent, which amounts to implicit validation at the end of the period.

5. Effective end of the contract#

The termination takes effect the day after validation (express or tacit). No notice period is due. The employer must then pay:

• the specific mutual termination severance;
• the final pay statement (paid holiday balance, pro-rated seniority bonus, RTT days);
• the end-of-contract documents: certificate of employment, France Travail unemployment certificate, receipt for final settlement.

To secure this last step, see our obligations RH et paie de l'employeur en 2026.

Statutory minimum amount#

The specific severance cannot be lower than the statutory severance indemnity for dismissal (article R. 1234-2 of the French Labour Code):

• 1/4 of a month of gross salary per year of service for the first 10 years;
• 1/3 of a month of gross salary per year of service beyond 10 years.

The reference salary retained is the most favourable between:

• the monthly average of the last 12 months of gross salary;
• the monthly average of the last 3 months (annual bonuses then being taken into account pro rata, i.e. 1/4 over 3 months).

If a collective bargaining agreement provides a more favourable severance, that amount applies automatically.

Severance calculation table#

The parties may negotiate a supra-statutory severance (an amount above the minimum), which is common when the employer wants to secure a quick departure or pre-empt a latent dispute.

For the employee: capped exemption regime#

The severance is exempt from personal income tax up to the highest of the following three amounts (article 80 duodecies of the French Tax Code, CGI):

• the amount of the statutory or collective-agreement severance;
• 2 times the gross annual remuneration received during the calendar year preceding the termination;
• 50 % of the total amount of the severance paid.

This exemption is itself capped at 6 times the PASS, i.e. approximately EUR 282,600 in 2026 (based on a PASS 2026 of EUR 47,100, subject to the final ministerial order). Above this cap, the excess is taxable under the progressive scale, with the option of the quotient system (article 163-0 A CGI) to smooth the tax impact.

The exemption from social security contributions applies within the same cap, but is subject to the condition that the employee is not entitled to a full-rate basic retirement pension at the termination date. If that is the case, the entire severance is subject to social charges from the first euro. The CSG/CRDS social levies (9.7 %) remain due on the portion above the statutory or collective amount.

For the employer: the single 30 % contribution#

Since 1 September 2023, the old 20 % social levy has been replaced by a single 30 % employer contribution (article L. 137-12 of the French Social Security Code, amended by law n° 2023-270). This contribution applies:

• on the portion of the severance exempt from social security contributions;
• regardless of the employee's age, including for employees not eligible for a full-rate retirement pension;
• from the first euro of the exempt portion.

It is collected by the URSSAF (French social security collection agency) through the DSN (nominative social declaration) of the month of payment and constitutes a charge deductible from the company's taxable result.

Summary table of the social and tax regime#

Protected employee (CSE member, union delegate, labour-tribunal judge)#

The procedure follows article L. 1237-15: the agreement is subject to authorisation from the labour inspector (not validation by the DREETS). The labour inspectorate has two months to decide after receiving the Cerfa 14599*01 form. Termination can only take effect the day after authorisation.

Employee on sick leave#

The Cour de cassation accepts mutual termination during a non-occupational sick leave, provided that consent is free and informed (Cass. soc., 30 September 2014, n° 13-16.297). For a sick leave following a work accident or an occupational disease, the termination is upheld if the absence of fraud is established (Cass. soc., 16 May 2018, n° 16-25.852), but remains legally more exposed.

Employee declared unfit#

The RCI is admissible after the occupational doctor's opinion of unfitness, but caution is required: case law considers that it should not be used to circumvent the redeployment obligation (Cass. soc., 9 May 2019, n° 17-28.767). In practice, we prefer dismissal for unfitness when redeployment is impossible.

Collective mutual termination (RCC)#

Governed by articles L. 1237-19 to L. 1237-19-14, the RCC requires a majority collective agreement validated by the DREETS. It organises a voluntary departure scheme combined with a support plan (training, mobility, redeployment leave). It is relevant for companies of 300+ employees wishing to adjust headcount without resorting to a social plan (PSE).

• Forgetting to hand the Cerfa to the employee: failure to provide a signed copy entails nullity (Cass. soc., 6 February 2013, n° 11-27.000).
• Miscalculating the cooling-off period: it starts on the day after signature and ends on the 15th calendar day, postponed to the next business day if the deadline falls on a weekend.
• Underestimating the 30 % contribution: on a EUR 30,000 severance, the employer bill rises to EUR 39,000 on top of usual charges.
• Forcing a "fake" mutual termination: if consent is vitiated (hierarchical pressure, harassment), the agreement may be reclassified as a dismissal without real and serious cause, with the Macron compensation scale plus damages.
• Neglecting the unemployment impact: a high supra-statutory severance triggers a deferred-compensation period going up to 150 days (article 21 of the 2023 unemployment-insurance rules).
• Confusing RCI and RCC: the RCC requires a collective agreement and excludes any economic dismissal during its term.

Recently, an IT services SME asked us to handle five simultaneous mutual terminations of permanent engineers, in the context of a strategic pivot. With an average seniority of 6 years and an annual gross salary of EUR 65,000, the direct cost was EUR 30,000 of severance per employee, i.e. EUR 150,000 in total. Once the single 30 % contribution was added (EUR 45,000) and the supra-statutory severances negotiated to smooth the departures (+25 % on average, i.e. EUR 37,500), the total bill reached EUR 232,500 — 55 % more than the director's initial estimate.

Our conviction, after several years supporting Paris-based SMEs: the mutual termination is rarely the right tool for an employee with less than 2 years of service. The statutory severance is low (around 1 month of salary for 2 years), the 30 % employer contribution eats into the negotiation margin, and the risk of post-termination litigation remains. In such situations, a negotiated resignation (with dispensation from notice and mutual waiver of claims) or a plain amicable termination outside the L. 1237-11 framework are sometimes more relevant — but they deprive the employee of unemployment benefit.

Conversely, the RCI becomes unbeatable for 50+ profiles with 10 to 25 years of seniority: the 1/3 month formula beyond 10 years generates substantial severance, the income-tax exemption covers most of the payment, and the employee can transition smoothly into a long unemployment-benefit period before retirement. Our arbitrage dividendes contre salaire pour dirigeant and our analysis of charges sociales en SASU also shed light on the parallel optimisations on the company-director side.

Hayot Expertise tip. Before any signature, systematically simulate three scenarios: (1) total employer cost, including the 30 % contribution; (2) net in the employee's pocket after CSG/CRDS and any income tax; (3) effective date of unemployment-benefit payment after the deferred-compensation period. Document in writing the free nature of consent (emails, minutes of meetings) — it is the first line of defence in case of labour-tribunal challenge.

The employee may register with France Travail from the day after the termination, but the Return to Employment Allowance (ARE) is not paid immediately. Three deferred periods are cumulated:

1. Waiting period of an incompressible 7 days;
2. Paid-leave deferral corresponding to the number of days indemnified under the compensatory paid-leave indemnity;
3. Specific deferral calculated on the supra-statutory portion of the severance, capped at 150 days (75 days in case of economic dismissal).

The specific-deferral formula was amended by the 2023 unemployment-insurance agreement: supra-statutory severance ÷ 102.4 (instead of 90 previously), which mechanically lengthens the period for high severance amounts. Our dedicated file chômage après rupture conventionnelle details the simulations.

1. Prepare the meeting: written convocation, mention of the assistance option.
2. Hold at least one meeting and formalise the signed minutes.
3. Calculate the severance with a calculator based on the PASS and the applicable collective bargaining agreements.
4. Draft the agreement on the right Cerfa form (14598 standard or 14599 protected employee).
5. Sign in duplicate and hand a signed copy to the employee against receipt.
6. Count the cooling-off period: D+1 to D+15 calendar days, extended if a public holiday.
7. Submit on TéléRC from the 16th day to start the DREETS review.
8. Wait for validation (express or tacit at D+15 business days).
9. Pay the severance and prepare the final pay statement on the effective date.
10. Declare in the DSN the 30 % employer contribution in the month of payment.
11. Hand over the end-of-contract documents: France Travail unemployment certificate, certificate of employment, final-settlement receipt.
12. Keep the file for 5 years to handle any labour-tribunal claim.

• The mutual termination agreement only applies to the CDI and requires free and informed consent from both parties.
• The procedure lasts about 5 to 6 weeks between signature and the effective termination date (15 days for withdrawal + 15 business days for validation).
• The minimum severance is the statutory dismissal indemnity (1/4 month per year ≤ 10 years + 1/3 month beyond), increased by the collective agreement if more favourable.
• The employer bears a single 30 % contribution on the portion exempt from social contributions since 1 September 2023.
• The employee receives unemployment benefit (ARE) after a deferred-compensation period that can reach 150 days on the supra-statutory portion.
• In 2026, the trade-off between RCI and other termination modes depends on seniority, the employee's profile and the company's financial context.

Can the rupture conventionnelle be used for a fixed-term contract (CDD)?#

No. The procedure under articles L. 1237-11 et seq. of the French Labour Code is strictly reserved for permanent employment contracts (CDI). For a CDD, the parties may resort to a separate amicable termination (rupture anticipée d'un commun accord) under article L. 1243-1, but the employee will not be entitled to unemployment benefit (ARE) on the same basis. Apprenticeship and mission contracts also fall outside the rupture conventionnelle framework.

What happens if the DREETS refuses the validation?#

The DREETS may refuse validation if the cooling-off period was not respected, if the severance is below the statutory minimum, if the consent of one of the parties appears vitiated, or if the procedural formalities are not met. The refusal must be reasoned. The parties may either correct the irregularity and submit a new request, or abandon the procedure. In all cases, the employment contract continues during this period.

Can the rupture conventionnelle be cumulated with a non-compete clause?#

Yes. The non-compete clause survives the mutual termination unless the parties expressly waive it in the agreement. The employer must then pay the contractually agreed financial compensation in return, in addition to the rupture conventionnelle severance. Where the employer wishes to avoid this cost, the waiver of the clause must be notified in writing within the time limit set in the employment contract or the applicable collective bargaining agreement.

How is the severance reflected in the payroll and the DSN?#

The severance must appear on the final pay slip of the month of departure, with a clear distinction between the statutory portion (CSG/CRDS exempt up to the cap) and the supra-statutory portion (subject to CSG/CRDS and to the 30 % employer contribution). The DSN of the month of payment must include the dedicated severance-pay codes (S21.G00.51) and the employer contribution. A faulty DSN exposes the company to URSSAF reassessment.

Reference sources: French Labour Code (Légifrance), URSSAF, Ministry of Labour, France Travail.