The value-sharing bonus (“prime de partage de la valeur”)

In December 2018, "with the aim of supporting the purchasing power of households" the Government decided to open to companies the possibility of paying a bonus to employees with a remuneration of less than 3 French minimum wage (i.e. 4495.41 €), This bonus was exempt from income tax and social charges and contributions to a limit of 1000 €.

Named "exceptional purchasing power bonus" (“prime exceptionnelle de pouvoir d’achat”) and initially temporary, the measure was renewed in 2020 and then in 2021.

Now called the "value-sharing bonus" (“prime de partage de la valeur”), this measure has become permanent since a Law of August 16, 2022, "on emergency measures to protect purchasing power" (“portant mesures d'urgence pour la protection du pouvoir d'achat”).

• Juridical act setting up this bonus

The bonus must be provided for:

• by company or group collective agreement according to the same terms as a profit-sharing agreement (i.e. for a period of 1 to 5 years in particular) ;
• by unilateral decision of the employer (after prior consultation of the social and economic Committee if it exists).

• Employee beneficiaries

In principle, all employees with an employment contract with the company are eligible.

However, the payment of this bonus may be reserved for certain employees in consideration of a maximum level of remuneration. This maximum level of remuneration must be defined in the juridical act.

Temporary employees who are seconded to a company that introduces the bonus may also benefit from it. In this case, the temporary work company must be informed of the terms and conditions for the payment of the bonus.

• Amount

The maximum amount of the bonus is not set by law. It can be adjusted according to the employee's wage, classification level, the length of time spent in the company during the previous year (parental leave (maternity, paternity, adoption, education are considered as periods of actual presence), the length of time worked under the contract, or seniority in the company.

Nevertheless, the exemption limit is €3,000 per beneficiary and per calendar year.

This amount can be increased to €6,000 per beneficiary and per calendar year under certain conditions (for example, if the employer is an association or a foundation recognized as being of public utility or general interest and authorized to receive donations giving rise to a tax deduction).

• Payment

The bonus may be paid in one or more instalments, up to a maximum of once per quarter during a calendar year.

This bonus cannot replace any element of remuneration paid by the employer. It may not replace any increase in remuneration or bonuses provided for by a wage agreement, by the employment contract or by the practices in force in the company

• Exemptions

The tax and social benefits vary depending on when the bonus is paid.

Bonuses paid until December 31, 2023 are exempt from:

• (i) All employee and employer social security charges, regardless of the employee's level of remuneration;
• (ii) the social contributions (CSG and CRDS) for employees who received remuneration of less than three times the annual value of the SMIC during the 12 months preceding the payment (i.e. €47,829.60) and (iii) the fixed social security contribution (“forfait social”) in companies with more than 250 employees for employees who received remuneration of less than three times the annual value of the French minimum wage (i.e. €47.829.60);
• (iii) social security contributions in companies with more than 250 employees for employees having received a remuneration lower than three times the annual value of the French minimum wage (i.e. 47,829.60) during the 12 months preceding the payment.

Bonuses paid from January 1, 2024 will only be exempt from all employee and employer social security contributions, regardless of the employee's level of remuneration and the date of payment. However, bonuses will be subject to the CSG and CRDS, income tax and social security contributions (“forfait social”) – if applicable.