The Paris appeal court confirmed Guéant's conviction for running a secret fund, worth 210,000 euros in total, while he was chief of staff during Sarkozy's stint as interior minister in 2002-2004.
The police chief at the time, Michel Gaudin, handed him 10,000 euros in cash every month from a police expenses budget and Guéant kept half for himself and paid the rest out in "bonuses" to three members of staff.
When he first went to trial the court handed him a two-year suspended sentence.
Judging that too severe, he appealed, a decision that did not pay off.
Unlikely to go to prison
On Monday the appeal court gave him a one-year jail term and another year suspended, also confirming the lower court's 75,000-euro fine and a five-year ban on holding public office.
Gaudin's 10-month suspended sentence was lengthened to 18 months and three other defendants received slightly longer suspended sentences along with fines.
Guéant, who went on to be interior minister himself under Sarkozy's presidency in 2011-2012, is unlikely to actually go to jail, however.
Prison sentences of less than two years are usually reduced in France.
Guéant has already been found guilty of moneylaundering and tax fraud over the sale of paintings to a Malaysian lawyer and is being investigated for supected involvement for the alleged financing of Sarkozy's 2007 presidential campaign by Moamer Kadhafi's Libya.