How is the reference salary calculated?
01 June 2026 · 4 min reading time
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When you lose your job, fall ill, are dismissed or prepare for retirement, one question often comes up: on what basis will my rights be calculated? This basis is generally known as the reference salary.
However, the reference salary is not always calculated in the same way. The period used, the pay elements included and the formula applied vary depending on the right concerned. The calculation will not be the same for unemployment benefits, daily sickness benefits, a dismissal indemnity or a retirement pension.
In 2026, several rules must therefore be clearly distinguished, especially since the increase in the French minimum wage on June 1, 2026, the current rules for calculating the reference daily wage for unemployment benefits and the ceilings applicable to daily sickness benefits.
What is the reference salary?
The reference salary is the pay basis used to calculate certain social rights or indemnities. It is used to determine the amount an employee may be entitled to in a given situation: sick leave, unemployment, dismissal, contractual termination, workplace accident or retirement.
In most cases, it corresponds to an average of the gross pay received over a specific period. This period may be 3 months, 12 months, 24 months, 36 months or even 25 years depending on the calculation concerned.
The reference salary may include the basic salary, certain bonuses, commissions, gratuities, overtime or benefits in kind. However, some elements such as professional expense reimbursements or termination indemnities are generally not included in the calculation basis.
There is therefore no single universal definition. The right approach is to always ask: “Which right am I calculating?” The answer determines the correct reference period and the right pay elements to include.
What is the reference salary used for?
The reference salary is used to avoid an arbitrary calculation of an employee’s rights. It provides an objective basis, usually linked to the pay actually received before the event concerned.
In case of sick leave, it is used to calculate the daily benefits paid by French Health Insurance. In case of contract termination, it is used to determine the reference daily wage used to calculate unemployment benefits. In case of dismissal, it is used to set the amount of the legal or contractual indemnity owed to the employee.
This mechanism is also useful for checking a calculation. An employee can compare the amounts used with their payslips, identify forgotten bonuses or spot an incorrectly applied reference period.
Knowing your reference salary therefore makes it possible to anticipate your rights, but also to challenge a calculation if it does not match your actual situation.
Which elements are included in the reference salary?
The elements included in the reference salary depend on the right concerned, but some income is generally taken into account when it has the nature of salary.
These include the gross basic salary, regular bonuses, commissions, gratuities, benefits in kind and, depending on the case, overtime or additional hours. Bonuses provided for by the employment contract, the collective agreement or company practice may also be included in the calculation.
For example, a seniority bonus, a 13th-month bonus, a holiday bonus or sales commissions may be included when they correspond to remuneration linked to the employee’s work.
However, caution is needed: a bonus may be included in one calculation but not in another. The calculation of the reference salary for a dismissal indemnity does not follow exactly the same rules as the calculation of the reference daily wage for unemployment benefits or daily sickness benefits.
Which elements are excluded from the reference salary?
Some elements are not considered part of the reference salary, even if they appear on a payslip or in the final settlement.
Professional expense reimbursements are generally excluded because they do not pay for the employee’s work. They compensate for an expense incurred for professional activity: travel costs, meal expenses, accommodation, mileage allowances or costs related to an assignment.
Termination indemnities, such as dismissal indemnity or the specific contractual termination indemnity, are also not used as a basis for calculating the reference salary. They compensate for the termination of the contract, but they do not correspond to pay for work performed.
Similarly, paid leave compensation, certain exceptional indemnities or sums that do not have the nature of remuneration may be excluded depending on the calculation concerned.
To avoid mistakes, it is therefore necessary to distinguish between what remunerates the employee’s work and what compensates for a specific situation.
Reference salary calculation period
The calculation period for the reference salary varies depending on the right concerned. This is one of the most common mistakes: applying the same period to all calculations.
For the dismissal indemnity, the employer must compare two methods: the monthly average of the last 12 months before dismissal and the monthly average of the last 3 months. The most favourable amount for the employee must be used.
For daily sickness benefits, the reference period generally corresponds to the 3 calendar months preceding the work stoppage. In case of discontinuous or seasonal activity, the calculation may be based on the last 12 months.
For unemployment benefits, the logic is different. This is called the reference daily wage, or SJR. It is calculated from the remuneration received over a reference period that depends on the jobseeker’s age: 24 months for those under 55 and 36 months for those aged 55 and over.
For retirement, the same reference salary mechanism does not strictly apply. The calculation of the basic pension for private-sector employees is based on the average annual income, meaning the average gross salary of the best 25 years.
Reference salary in case of sick leave
In case of sick leave, the reference salary is used to calculate the daily benefits paid by French Health Insurance.
For a monthly paid employee, the calculation is generally based on the gross salaries from the 3 calendar months preceding the work stoppage. For example, if the sick leave starts on April 15, the salaries for January, February and March may be used as the calculation basis.
The basic daily salary is obtained by adding together the gross salaries used over these 3 months, then dividing the total by 91.25. The daily sickness benefit then corresponds to 50% of this basic daily salary, within the applicable ceiling.
In 2026, one important point must be taken into account: the salaries used for the calculation are capped. For sick leaves prescribed in June 2026, the maximum amount of the basic daily sickness benefit is €41.95 gross per day. For sick leaves prescribed from July 2026 onwards, this maximum amount is €42.97 gross per day.
Example of calculation in case of sick leave
An employee earns €2,100 gross per month during the 3 months preceding their sick leave.
The total gross salary used is therefore:
€2,100 × 3 = €6,300
The basic daily salary is calculated as follows:
€6,300 / 91.25 = €69.04
The daily sickness benefit corresponds to 50% of this amount:
€69.04 × 50% = €34.52 gross per day
In this example, the daily benefit remains below the applicable ceiling. It can therefore be paid on this basis, subject to eligibility conditions and the waiting period.
Reference daily wage and unemployment benefits: what are the rules in 2026?
For unemployment benefits, we do not only refer to the reference salary, but to the reference daily wage, often called SJR. It is one of the elements used by France Travail to calculate the amount of the return-to-work allowance.
In 2026, the SJR is calculated from gross remuneration received over a reference period of:
- 24 months for jobseekers under 55;
- 36 months for jobseekers aged 55 and over.
This period is counted in calendar days between the first and last working day included in the reference period. This means that the calculation is not based only on days actually worked, but on a full period, with specific rules in case of sick leave, maternity leave, parental leave or other interruptions.
The salaries taken into account are gross remuneration subject to unemployment insurance contributions: basic salary, bonuses, commissions, gratuities or benefits in kind. Certain sums linked to contract termination or professional expenses are not included.
How is the unemployment benefit calculated from the SJR?
The gross daily amount of the unemployment benefit is calculated by comparing several results.
France Travail uses the most favourable amount between:
- 40.4% of the SJR + €13.18;
- 57% of the SJR;
- the minimum allowance, set at €32.13 per day.
However, this amount is capped: the daily allowance cannot exceed 75% of the SJR. The amounts may be prorated in case of part-time work.
Example of SJR calculation
A 45-year-old employee loses their job after working continuously for 24 months. They earned an average of €2,000 gross per month.
Their total gross remuneration is therefore:
€2,000 × 24 = €48,000
If the reference period includes 730 calendar days, the SJR is calculated as follows:
€48,000 / 730 = €65.75
The gross daily allowance is then calculated by comparing:
40.4% × €65.75 + €13.18 = €39.74
and
57% × €65.75 = €37.48
In this example, the first amount is the most favourable. The gross daily allowance would therefore be around €39.74, subject to the rules applicable to the jobseeker’s situation.
Reference salary in case of dismissal
The reference salary is essential for calculating the legal dismissal indemnity. This indemnity is owed to a dismissed employee on a permanent contract, except in certain cases, when they meet the required seniority conditions.
To determine the reference salary, two methods must be compared:
- the monthly average of the last 12 months before dismissal;
- the monthly average of the last 3 months before dismissal.
The employer must use the method that is most favourable to the employee. If the employee has less than 12 months of seniority, the average is calculated over all the months preceding the dismissal.
With the last 3 months method, annual or exceptional bonuses must be included on a pro rata basis. For example, if an annual bonus has been paid, one twelfth of this bonus must be added to each of the 3 months used.
Which elements are taken into account?
For the dismissal indemnity, the reference salary may include the gross basic salary, mandatory bonuses, commissions, gratuities, benefits in kind and overtime or additional hours.
However, professional expense reimbursements, the dismissal indemnity itself or certain sums paid because of the termination are not included in the reference salary.
Example of dismissal indemnity calculation
An employee has 12 years of seniority and a reference salary of €1,600 gross per month.
The legal indemnity is calculated as follows:
- 1/4 of a month’s salary per year of seniority for the first 10 years;
- 1/3 of a month’s salary per year of seniority from the 11th year onwards.
The calculation is therefore:
€1,600 × 1/4 × 10 = €4,000
then:
€1,600 × 1/3 × 2 = €1,066.67
The total amount of the legal dismissal indemnity is therefore:
€4,000 + €1,066.67 = €5,066.67
The collective agreement may provide for a more favourable amount. In that case, the most advantageous amount for the employee applies.
Reference salary and contractual termination
In case of contractual termination, the employee receives a specific contractual termination indemnity. Its amount cannot be lower than the legal dismissal indemnity.
In practice, the calculation therefore follows a logic close to that of the dismissal indemnity. The reference salary must be determined, the applicable calculation methods compared and the collective agreement checked to see whether it provides for a more favourable indemnity.
Because contractual termination is negotiated between the employer and the employee, the final amount may be higher than the legal minimum. The reference salary is therefore used as a basis for checking the minimum owed, but it does not limit the possibility of negotiating a higher indemnity.
Reference salary in case of workplace accident or occupational disease
In case of a workplace accident or occupational disease, the calculation of daily benefits does not follow exactly the same rules as for ordinary sick leave.
The daily benefit is calculated from the basic daily salary. During the first 28 days of leave, it corresponds to 60% of this basic daily salary, within the applicable ceiling. From the 29th day onwards, it increases to 80% of the basic daily salary.
In 2026, maximum amounts are capped. As of January 1, 2026, the daily benefit for workplace accident or occupational disease cannot exceed €240.49 during the first 28 days, then €320.66 from the 29th day onwards.
This difference explains why ordinary sick leave and leave linked to a workplace accident or occupational disease should not be confused: the calculation basis and compensation rates are not the same.
Reference salary and retirement: be careful not to confuse them
For retirement, the term reference salary is sometimes used in everyday language, but the calculation does not work in the same way as for unemployment, sick leave or dismissal.
For the basic pension of a private-sector employee, the correct term is rather average annual income. It corresponds to the average of the gross salaries subject to pension contributions during the best 25 years of the career.
The amount of the basic pension then depends on three elements:
- the average annual income;
- the pension rate;
- the validated pension insurance period compared with the period required to obtain a full-rate pension.
If the employee has worked for less than 25 years, the average is calculated over all the years worked. However, income from the year of retirement is not taken into account.
This distinction is important: retirement calculation is not based on the last 3 months, last 12 months or last 24 months, but on the best years of the career.
Reference salary and temporary work: what are the specific features?
For temporary workers, the reference salary can be more complex to calculate because assignments may be successive, discontinuous or carried out with several user companies.
In temporary work, the employee must receive remuneration at least equivalent to what an employee with equivalent qualifications occupying the same position would receive in the user company. This rule ensures equal treatment between temporary workers and permanent employees.
For unemployment benefits, France Travail takes into account the gross remuneration received during the applicable reference period: 24 months for those under 55, 36 months from age 55 onwards. Assignment periods, variable pay and interruptions may therefore affect the calculation of the reference daily wage.
Temporary-work-specific indemnities must also be distinguished. The end-of-assignment indemnity and the paid leave compensation indemnity may be paid under certain conditions, but they must not be confused with the basic salary.
Example for a temporary worker
A 56-year-old temporary worker has completed several assignments over 3 years, with variable income depending on the month.
To calculate their unemployment benefit, the reference period may extend over 36 months, because they are 55 or older. France Travail will take into account their gross remuneration over this period, according to the applicable rules, then divide the reference salary by the number of calendar days used.
Their SJR will therefore reflect their activity over a long period, including the effects of successive assignments, non-working periods and any neutralisation or reconstruction rules.
How to check your reference salary
To check your reference salary, you should start by gathering the right documents: payslips, employment contract, amendments, France Travail certificates, sick leave certificate, final settlement or dismissal notification depending on the situation.
You then need to identify the right concerned. The calculation will not be the same for a dismissal indemnity, unemployment benefit or daily sickness benefit.
The period used must also be checked. An error in the reference period can significantly change the amount obtained. For example, using 12 months instead of 24 months for unemployment benefits can distort the SJR calculation.
Finally, the elements included and excluded must be checked. A forgotten regular bonus, a professional expense reimbursement included by mistake or a termination indemnity wrongly taken into account can lead to an incorrect result.
Why is it important to know your reference salary?
Understanding how the reference salary works is not only useful for HR departments or social security bodies. It also helps employees better understand their rights.
It makes it possible to anticipate the amount of an indemnity before a contract termination, estimate benefits before the end of an assignment, check daily benefits in case of sick leave or better understand the calculation of a future pension.
It is also a useful verification tool in case of disagreement. If an amount seems too low, the employee can review their payslips, check the period used and compare the calculation with the applicable rules.
In case of doubt, they can ask their employer, temporary work agency, France Travail, French Health Insurance or a specialised adviser for explanations. The collective agreement may also provide for rules that are more favourable than the legal minimum.
The reference salary is therefore a technical but essential concept: understanding it properly helps employees defend their rights and avoid calculation errors.
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