Years 1 to 10
1/4 month
of pay per year
Each year after 10
1/3 month
of pay per year
Tax-free today
up to €288,360
beyond the legal minimum
2027 proposal
€48,060
one cap for everything
Code du travail, Code général des impôts and the PLF/PLFSS 2027 as presented on 1 October 2026, checked 5 October 2026.
Calculate your own indemnité
Your dates and pay, the tax-free part, and today's rules next to the 2027 proposal.
How the indemnité de licenciement is calculated
Three inputs decide the amount, and each has a rule that employers sometimes get wrong:
- Reference pay. The higher of your average monthly gross over the last 12 months and over the last 3 months. In the 3-month average, an annual bonus counts only pro rata. If you were off sick, the months before the leave are used.
- Length of service. Counted to the end of your notice period, even if your employer excuses you from working it. Part years count in complete months only. You need at least 8 months of uninterrupted service.
- The rate. 1/4 of a month per year up to 10 years, 1/3 per year beyond. After 10 years you have 2.5 months' pay; each later year adds a third.
Examples for a contract ending on 31 December 2026, with the same pay in the 12-month and 3-month averages. PayMetric Labs' own modelled estimate, from the engine behind our calculator:
| Service, monthly gross | Months of pay | Legal indemnity |
|---|---|---|
| 2 years, €2,800 | 0.50 | €1,400 |
| 8 years, €3,500 | 2.00 | €7,000 |
| 15 years, €5,000 | 4.17 | €20,833 |
| 25 years, €9,000 | 7.50 | €67,500 |
Code du travail L1234-9 and R1234-1 to R1234-4 (service-public.gouv.fr). Your convention collective, often the Syntec or métallurgie convention for cadres, may give more.
Which rupture do you have, and what it pays
| How it ends | Indemnity | Notice | Unemployment benefit |
|---|---|---|---|
| Licenciement pour motif personnel (not faute grave) | Legal or conventional, whichever is higher | Worked or paid | Yes |
| Licenciement économique | Same; often more in a PSE | Worked or paid | Yes; delay capped at 75 days |
| Rupture conventionnelle | Negotiated, at least the legal indemnity | None; end date agreed | Yes |
| Faute grave or lourde | None | None | Yes |
| Inaptitude after a work accident or occupational disease | Double the legal indemnity | Paid as compensation | Yes |
| Démission | None | You give notice | Usually no |
Paid holiday you haven't taken (indemnité compensatrice de congés payés) and notice pay are separate from the indemnity. They're taxed as salary, in full.
Is the indemnité de licenciement taxable in 2026?
Usually not, and the legal amount never is. There are three separate exemptions, and a payment can be free of one and not another:
- Income tax (art. 80 duodecies CGI): exempt up to the highest of the legal or conventional amount, twice your gross pay in the previous calendar year, or half the indemnity. The last two are capped at €288,360 (6 PASS). In a PSE the whole indemnity is exempt.
- Social contributions: the income-tax-free part, up to €96,120 (2 PASS). Above €480,600, everything is subject from the first euro.
- CSG and CRDS (9.7%): waived only up to the legal or conventional minimum. A negotiated top-up pays CSG even when it's free of income tax.
Take a rupture conventionnelle after 15 years and 7 months on €5,000 a month, with €20,000 negotiated on top of the €21,806 minimum. The whole €41,806 is free of income tax, because it's below twice last year's pay. The €20,000 top-up pays €1,940 of CSG/CRDS, so you keep €39,866. Your employer pays a 40% contribution of about €16,722 on top. If part of a payment is taxable, you can ask for the quotient system: a quarter of it is added to your other income, and the extra tax is multiplied by four. It usually lowers the bill.
The 2027 change: tax-free severance capped at one PASS
The government presented the 2027 finance bill (PLF, article 2) and social security financing bill (PLFSS, article 6) on 1 October 2026. Both would replace today's exemptions with one ceiling: one PASS, €48,060 at the 2026 value. It would cover income tax, contributions and CSG alike, for every type of rupture, PSE included, and even when the legal or conventional minimum is higher. Everything above it would be taxed like salary.
Most people aren't affected: a legal indemnity reaches €48,060 only after long service on high pay. You're affected if you have a large conventional indemnity, a negotiated package, or a PSE payment. On the 25-year example above, the €67,500 legal indemnity is fully tax-free today. Under the proposal, about €19,440 would become taxable and you'd keep roughly €9,577 less.
One group would gain. A smaller rupture conventionnelle with a negotiated top-up, like the €41,806 example, would pay no CSG at all under the bill as drafted, because the whole amount sits under the single ceiling.
| Example | Paid | You keep, 2026 | If the proposal passes |
|---|---|---|---|
| 8 years, €3,500, legal indemnity | €7,000 | €7,000 | €7,000 |
| Rupture conventionnelle, €20,000 top-up | €41,806 | €39,866 | €41,806 |
| 25 years, €9,000, legal indemnity | €67,500 | €67,500 | €57,923 |
PayMetric Labs' own modelled estimate. Income tax for a single filer, with the quotient system, on top of 12 months' pay. The 2027 PASS isn't set yet.
Leaving in late 2026? The dates that matter
As drafted, the two bills use different dates. The social side applies to ruptures taking effect from 1 January 2027. The tax side applies to sums received from 1 January 2027. A contract that ends on 31 December 2026 but is paid in January could fall under the old contribution rules and the new tax rule.
A rupture conventionnelle takes about five weeks from signature to the earliest end date: 15 calendar days to withdraw, then 15 working days for the DREETS to approve it (service-public). To end in 2026, it would need signing by about mid-November. Don't rush into a departure for this alone: the bills can still change, and only someone above the cap gains from the timing.
Before you sign the solde de tout compte
- Check the end date used is the end of the notice period, not the date of the letter.
- Check the reference pay is the higher of the 12-month and 3-month averages, with bonuses included.
- Ask HR whether your convention collective gives more than the legal indemnity, and which article applies.
- Check unused congés payés and any notice pay are paid on top, as salary.
- Anything above the legal minimum delays unemployment benefit by about one day per €111.80, up to 150 days, or 75 days for an economic dismissal (Unédic). A 7-day waiting period follows.
- Register with France Travail soon after the contract ends. The delays run from the end of the contract, but benefit only starts once you're registered.
- If something is wrong, you have six months to contest the reçu pour solde de tout compte, and 12 months to challenge the dismissal itself.
Indemnité de licenciement: questions
How much is the indemnité de licenciement in 2026?
A quarter of a month's gross pay per year of service for the first 10 years, and a third of a month per year after that. On €3,500 a month after 7 years and 8 months, it's €6,708. After 25 years on €9,000, it's €67,500. Your convention collective may give more; the employer owes whichever is higher.
Why is my employer's figure lower than I expected?
Check four things. Only complete months count, so 7 years, 8 months and 20 days is 7 years and 8 months. Service runs to the end of the notice period, worked or not, so the date on the letter isn't the end date. The reference pay should be the higher of the 12-month and 3-month averages, bonuses included. And the conventional indemnity, if your convention has one, replaces the legal one when it's higher.
Do I get anything after a faute grave?
No legal indemnity after a dismissal for faute grave or faute lourde, and no notice pay either. You still get your unused paid holiday (congés payés) and can claim unemployment benefit. If you think the faute grave isn't justified, you have 12 months to challenge the dismissal at the conseil de prud'hommes.
Do I get an indemnity if I resign?
No. A démission doesn't give a severance payment or, in most cases, unemployment benefit. That's why many people ask for a rupture conventionnelle instead: it pays at least the legal indemnity and keeps your right to ARE. The employer has to agree, and it now costs them a 40% contribution on top.
What about a dismissal for inaptitude?
If the inaptitude comes from a work accident or an occupational disease, the legal indemnity is doubled (art. L1226-14 of the Code du travail) and you get a payment equal to your notice pay. If the inaptitude isn't work-related, you get the normal legal indemnity.
Is a rupture conventionnelle taxed like a dismissal?
Yes, as long as you can't yet draw a state pension. If you can, the whole indemnity is taxable and pays contributions from the first euro, so check your pension position before you sign.
When will we know if the 2027 cap passes?
Parliament usually adopts the social security and finance acts in December, and both can be amended before then. Until they're voted and published, the 2026 rules apply. We'll update this guide and the calculator when the texts are final, and again once the 2027 PASS is set.
Can I challenge the amount after signing?
Yes. You have six months to contest the reçu pour solde de tout compte, and 12 months to challenge the dismissal itself or a rupture conventionnelle (from its homologation). Damages for an unfair dismissal follow a separate scale (the barème Macron) and come on top of the indemnité de licenciement.
Methodology and limits
Amounts follow the Code du travail (L1234-9, R1234-1 to R1234-4, L1226-14, L1237-13) as summarised by service-public.gouv.fr (updated June 2026). Tax and contributions follow art. 80 duodecies CGI, L242-1 and L136-1-1 of the Code de la sécurité sociale, the LFSS 2026 (40% contribution) and the 2026 PASS of €48,060. The 2027 column follows the PLF and PLFSS 2027 as presented on 1 October 2026; they aren't law yet. Checked 5 October 2026.
Examples are PayMetric Labs' own modelled estimates. Income tax is for a single filer with 12 months' pay as other income; your household and other income change it. Contributions on any non-exempt part assume your pay already passed the first PASS. General information, not legal or tax advice.
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