What are the differences between overtime and additional hours?
Overtime, like additional hours, is time worked by an employee in excess of the hours specified in their contract of employment.
Both offer benefits to the employee, but also to you as the employer.
When you put it like that, you might think that they are synonymous, but no, there are certain differences in their nature, remuneration and legal duration.
This article explains everything you need to know!
Who can benefit from overtime?
Type of contract covered by overtime
Overtime applies to full-time employees. This means that overtime is worked in excess of the statutory working week, i.e. 35 hours a week.
In addition, overtime :
- must comply with an annual quota set by law or collective agreement ;
- entitle the employee to additional pay or time off in lieu.
Type of contract covered by overtime
Overtime applies to part-time employees. They are worked in excess of the contractual 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 of overtime.
Table summarising the differences between overtime and additional hours
| Overtime | Overtime | |
| Type of contract | Full-time employment contract | Part-time employment contract |
| Legal working hours | Hours worked in excess of the legal working hours specified in the employment contract | Hours worked in excess of the legal working hours specified in the employment contract, up to a maximum of 35 hours per week |
| Employee refusal | The employee may not refuse to do this additional work, except in the event of abuse of right by the employer. | Employees may not refuse to work overtime, provided they have been given at least 3 days' notice by their employer. |
What are the legal working hours?
For overtime
Article L3121-27 of the French Labour 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 in the case of certain exceptions ;
- 48 hours a week, or even up to 60 hours by way of derogation in exceptional circumstances and with the agreement of the labour inspector;
- 44 hours a week on average over 12 consecutive weeks, or even 46 hours if authorised by the labour inspector or a company agreement.
👉 An employee whose daily working time reaches 6 hours must be given 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 time 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 agreement may authorise an increase in the maximum number of hours worked up to ⅓;
- overtime must not exceed the statutory working time (35 hours) or the working time agreed in the company if this is lower.
How are overtime and additional 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, where a company agreement or collective agreement so provides, the rate of overtime pay may be reduced, but never below 10%.
💡 The increase in salary may be replaced, in whole or in part, by compensatory rest.
For example, overtime paid at 150% may be replaced by 1 hour 30 minutes off.
For overtime
Overtime pay is increased to :
- 10% of salary for each hour of overtime worked, up to a limit of 10% of the working time set out in the contract;
- 25% of salary for each hour worked in excess of 10%, in which case the rate is the same as for overtime.
☝️ However, in this case, overtime cannot be replaced by compensatory rest. However, as with overtime, the rate of increase for overtime may be set by agreement or a branch agreement, but must not be less than 10%.
Overtime and additional hours: what are the tax benefits for companies?
Paying overtime and additional 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 employee per year;
- 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 deduction at source.
Overtime entitles employees to a reduction in social security contributions proportional to their pay, 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 in employers' 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.
What software should be used to calculate overtime and additional hours?
With all these rules to master, there's no need to panic! There are tools available that can calculate your employees' overtime and additional hours accurately and correctly.
More specifically, these are payroll management software packages designed to manage the payroll process from start to finish, in a very simple way.
In practical terms, these solutions promise a host of benefits for businesses:
- They automate the calculation of overtime and additional hours, reducing human error and processing time;
- they incorporate current regulations, and are regularly updated accordingly;
- They provide full traceability of hours worked, making audits and analyses easier;
- they can be adapted to the specific needs of all organisations, taking account of their collective agreements or branch agreements.
👉 Discover the best payroll software here.
What do we remember about overtime and additional hours?
Overtime and complementary hours do not mean 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 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 additional hours are exempt from income tax and give rise to reductions in employee social security contributions. Only overtime is eligible for a flat-rate deduction in employers' social security contributions.
You now have a good grasp of these concepts and know how to pay your employees for extra hours!
Article translated from French