Employment law
End‑of‑contract compensation for fixed‑term contracts (CDD): calculation
At the end of a fixed-term contract, several sums may be due. The most debated is the precarity payment, because its calculation rests on a basis (total gross remuneration) that is often confused with base salary alone.
This article sets out the method: which rate to use, on what basis, and in which cases the payment is not due. On the full set of end-of-contract entitlements, see CDD: termination rights.
1. What is the precarity payment for?
It is a supplement to salary compensating the temporary nature of the employment. It is due where the employment relationship does not continue at the end of the fixed-term contract, subject to the statutory exclusions.
One distinction should be made at the outset, as the two notions are regularly confused:
| Precarity payment | Damages | |
|---|---|---|
| What it compensates | The temporary nature of the job | An irregular early termination |
| When it is due | At the contract's normal expiry | When the employer terminates outside the permitted grounds |
| How it is calculated | A percentage of total remuneration | The remuneration remaining due until the term |
| Provision | Article L.24 and Decree D.24-1 | Article L.25 |
Labour Code, Articles L.24 and L.25 (French).
2. Which rate applies?
The order of priority is as follows, and it must not be reversed:
- First, the applicable collective agreement. If it sets a rate, that rate applies.
- Only failing that, the regulatory rate of 2.5%. It is a minimum, not a default to be applied without checking.
Before any calculation, the employer must therefore check what the sector collective agreement and, where applicable, the establishment agreement provide. A more favourable contractual rate always prevails. Decree No. 2022-0125/PT-RM, revised Article D.24-1 (French).
3. How is the amount calculated?
The formula is simple:
Precarity payment = total gross remuneration × applicable rate
The point to watch is the basis. It is the gross remuneration, that is before deductions from salary, and not base salary alone: bonuses and pay accessories are included.
Example: an eligible employee receives CFA 200,000 in gross salary and a CFA 25,000 bonus per month, over six months.
| Step | Calculation | Result |
|---|---|---|
| Monthly gross remuneration | 200,000 + 25,000 | CFA 225,000 |
| Total gross remuneration for the contract | 225,000 × 6 | CFA 1,350,000 |
| Payment at the 2.5% rate | 1,350,000 × 2.5% | CFA 33,750 |
For comparison, a calculation limited to base salary would have produced CFA 30,000, CFA 3,750 less. That is the typical gap created by using the wrong basis. Decree No. 2022-0125/PT-RM, revised Article D.24-1 (French).
4. Which contracts or situations are excluded?
Article L.24 provides that the payment is not due in the following cases:
- hourly or daily engagements not exceeding one day;
- seasonal contracts, engaged for the length of a campaign;
- temporary replacements of employees whose contract is legally suspended;
- jobs in sectors where using an indefinite contract is not customary, under the conditions set by law;
- the employee's refusal of an indefinite contract for the same or an equivalent job, at no lower pay;
- early termination at the employee's initiative or attributable to their misconduct.
In particular, the replacement contract is excluded from the statutory precarity payment. By contrast, a contract concluded for a temporary increase in activity is not on the list: the payment is due. Force majeure, on its own, is not among the listed exclusions. Labour Code, Articles L.20 and L.24 (French).
5. What effect do absences have?
An absence changes the remuneration paid over the contract and therefore the calculation basis. Three elements must be examined: the reason for the absence, whether salary was maintained, and the applicable contractual provisions.
One drafting nuance deserves attention: the decree refers to total gross remuneration received, while Article L.24 of the Code refers to total gross remuneration due. Any back pay must therefore be checked before finalising the calculation.
These texts do not, on their own, support the proposition that salary must systematically be reconstituted for any period of illness, maternity or occupational accident. Each situation must be examined against the collective agreement. Labour Code, Article L.24 (French); Decree No. 2022-0125/PT-RM, revised Article D.24-1 (French).
6. What other sums are due at the end?
The precarity payment does not settle the account on its own. It is joined by:
- salary for work performed up to the final day;
- bonuses and other acquired components of pay;
- compensation for accrued leave, where the statutory conditions are met.
And the employer must issue a certificate of employment, exempt from all stamp and registration duties. Labour Code, Article L.61 (French).
Key takeaways
| The rule | What it implies |
|---|---|
| Check the collective agreement before applying 2.5% | The regulatory rate is only a fallback minimum |
| The basis is total gross remuneration | Bonuses and accessories included, not base salary alone |
| Four contract categories are excluded | Daily, seasonal, replacement, customary sectors |
| The employee's own conduct may remove it | Refusing an equivalent indefinite job, leaving, misconduct |
| Absences change the basis | Check salary maintenance and any back pay |
| The payment does not settle the account | Salary, bonuses, leave and the certificate remain due |