What are the differences between overtime and complementary hours?

Overtime, like additional hours, is time worked by an employee in excess of the hours specified in his or her employment contract.

Both offer benefits to the employee, but also to you as the employer.

Put like that, you'd think they were synonymous, but no, there are differences in their nature, remuneration and legal duration.

This article explains everything you need to know!

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Who can benefit from overtime?

Type of contract concerned by overtime

Overtime applies to full-time employees. This means they are worked in excess of the legal working week, i.e. 35 hours per week.

In addition, overtime :

• must comply with an annual quota set by law or collective agreement;
• entitle the employee to additional pay or compensatory rest.

Type of contract concerned by overtime

Overtime applies to part-time employees. They are worked in excess of the contractual working hours laid down in their employment contract, but not exceeding 35 hours a week.

Their main characteristics are as follows

• they are limited to 10% of the contractual working time, or 33% if permitted by a collective agreement;
• they entitle employees to additional pay from the 10th hour onwards.

Table summarizing the differences between overtime and complementary hours

What are the legal working hours?

For overtime

Article L3121-27 of the French Labor Code sets the legal working week at 35 hours. In certain cases, employees may work overtime, but the total number of hours worked is regulated and must not exceed :

• 10 hours a day, or even 12 hours for certain exceptions ;
• 48 hours per week, or up to 60 hours in exceptional circumstances, with the agreement of the labor inspector;
• 44 hours a week on average over 12 consecutive weeks, or even 46 hours if authorized by the labor inspector or a company agreement.

👉 An employee whose daily working time reaches 6 hours must be granted a break of at least 20 consecutive minutes.

Overtime

As mentioned above, overtime worked by a part-time employee may not exceed 10% of the weekly or monthly working hours stipulated in the contract.

💡 For example: if the employment contract provides for 20 hours' work per week, the employee may work a maximum of 2 overtime hours.

However:

• the company convention or agreement may authorize an increase in the maximum duration up to ⅓;
• overtime must not exceed the legal working time (35 hours) or the company's contractual working time if this is lower.

How are overtime and complementary hours paid? Rates of increase

For overtime

Overtime pay is increased by:

• 25% of salary for the first 8 hours ;
• 50% of salary for subsequent hours.

In certain cases, when established by a company agreement or collective bargaining agreement, the rate of overtime pay may be reduced, but never below 10%.

💡 Overtime pay may be replaced, in whole or in part, by compensatory rest.

For example, overtime paid at 150% may be replaced by a rest period of 1 h 30.

For overtime

Overtime pay is increased to :

• 10% of salary for each hour of overtime worked, up to a maximum of 10% of the contractual working time;
• 25% of salary for each hour worked in excess of 10%, at the same rate as for overtime.

☝️ However, in this case, overtime cannot be replaced by compensatory rest. As with overtime, however, the rate of increase for overtime can be set by agreement, but must not be less than 10%.

Overtime and complementary hours: what are the tax advantages for the company?

Paying overtime and complementary hours can be beneficial to your company's tax situation.

Overtime pay is exempt from income tax:

• up to a maximum of €7,500 net per year and per employee;
• when it does not replace other forms of remuneration, such as bonuses.

Otherwise, overtime worked in excess of this limit is taxable and therefore subject to withholding tax.

Overtime and complementary hours entitle employees to a reduction in Social Security contributions proportional to their remuneration, up to a maximum of 21.5%.

To find out more: read this Urssaf article.

👉 The added bonus of overtime: it gives rise to a flat-rate deduction of employer social security contributions. The amount of this deduction is €1.50 per hour of overtime for companies with fewer than 20 employees, and 50 cents for all others.

Which software to use to calculate overtime and complementary hours?

With all these rules to master, don't panic! There are tools available to calculate your employees' overtime and complementary hours accurately and in full compliance with the regulations.

More specifically, these are payroll management software packages designed to manage the payroll process from start to finish, and in a very simple way.

More concretely, these solutions promise multiple benefits for companies:

• They automate the calculation of overtime and additional hours, reducing human error and processing time;
• they integrate current regulations and are regularly updated accordingly;
• offer complete traceability of hours worked, facilitating audits and analyses;
• they can be adapted to the specific needs of all organizations, and take account of their collective agreements or branch agreements.

👉 Discover the best payroll software here.

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What to remember about overtime and complementary hours?

Overtime and complementary hours are not the same thing. Overtime refers to full-time work, while overtime refers to part-time work.

In short, overtime is worked between 35 and 48 hours a week, and is paid at a premium of between 25% and 50% of the salary, or with compensatory time off.

Overtime, on the other hand, is limited to a total working week of 35 hours, and is paid at a premium of between 10% and 25% of salary.

Finally, both overtime and complementary hours are exempt from income tax and give rise to reductions in employee social security contributions. Only overtime is eligible for a lump-sum deduction in employer social security contributions.

Now you've mastered these concepts and know how to pay your employees for extra hours!