French Severance Pay in 2026: How to Calculate Your Rights When Laid Off

Getting laid off is stressful enough without having to decode France's complex severance pay rules. This guide explains how French severance pay (indemnité de licenciement) is calculated and what you are entitled to in 2026.

Who Is Entitled to Severance Pay?

In France, severance pay applies when an employee is dismissed for economic reasons (licenciement économique) or for personal reasons unrelated to serious misconduct (licenciement pour cause réelle et sérieuse).

Key eligibility conditions:

• Minimum 8 months of continuous service with the same employer
• The dismissal must not be for gross misconduct (faute grave) or serious misconduct (faute lourde)
• Fixed-term contracts (CDD) ending normally do not qualify

The Legal Minimum Calculation

The legal minimum severance pay is calculated as follows:

For the first 10 years of service:
1/4 of monthly reference salary × number of years worked

Beyond 10 years:
1/3 of monthly reference salary × number of years worked beyond 10

The reference salary is the higher of either:

1. The average monthly salary over the last 12 months
2. The average monthly salary over the last 3 months (including bonuses on a proportional basis)

Worked Example

An employee earning €3,000/month who has worked 7 years and 4 months:

• 7 full years × (3,000 × 1/4) = 7 × 750 = €5,250
• Plus partial year: 4 months / 12 = 0.33 year × 750 = €250
• Total minimum: €5,500

For complex cases with multiple contracts, career breaks, or collective agreements that exceed the legal minimum, use a dedicated calculator at indemnite-licenciement.fr to get an accurate figure.

Collective Agreements (Conventions Collectives)

Most French employees are covered by a collective agreement (convention collective) that often provides more favorable terms than the legal minimum. Always check your specific convention — sectors like banking, pharmaceuticals, and construction typically have higher rates.

Taxes and Social Charges

Good news: severance pay up to the legal minimum is exempt from income tax and social contributions. The exemption applies to the greater of:

• The legal minimum amount
• Two months of salary
• Half of total severance received, up to 6× the annual Social Security ceiling

Notice Period and Severance

Severance pay is separate from the notice period (préavis). Even if your employer pays in lieu of notice, this does not replace your severance entitlement. These are two distinct rights.

When Your Employer Does Not Pay

If your employer contests your entitlement or underpays, you have recourse through the Conseil de Prud'hommes (labor tribunal). The statute of limitations is 3 years from the date severance should have been paid.

Understanding your rights precisely before entering negotiation with your employer is essential. Document your calculation and present it with the applicable legal references.