Sharing premium Value

23 Feb 2024 | News, News

 

Preamble 

The law of 16 August 2022 “on emergency measures for the protection of purchasing power “created the value-sharing premium (PPV) in place of the former “Macron” bonus or PEPA bonus introduced in 2019 and which ended on 31 March 2022.

The Value-Sharing Act of 29 November 2023 introduced new measures to extend and improve the system put in place.

Let’s take a look at what’s new, as well as the payment methods and the legal regime of the premium in this explanatory note.

1. Beneficiaries

1.1 Employers concerned 

This applies to employers governed by private law, public industrial and commercial establishments, and public administrative establishments when they employ staff governed by private law.

 

 1.2 Eligible employees

All employees who hold an employment contract on the date of payment of the bonus or on the date of submission of the agreement  / signature of the unilateral decision to the labour administration  will be eligible for the value-sharing bonus.

Thus, employees and work-study students are concerned. Temporary workers on assignments (secondment to the user company) are also concerned in the same way as permanent employees of the user company.

Interns are not concerned.

 

2. Set-up   

2.1 Formalism

To set up the bonus, the employer can use a collective agreement (company, group) or implement a unilateral decision. In the latter case, the CSE must be consulted beforehand if necessary.

It is the agreement or unilateral decision that will determine the amount of the bonus as well as the remuneration ceiling retained or the conditions for modulating the level of the bonus between employees.

2.2 Payment terms

Two value-sharing premiums can now be paid per calendar year, up to the exemption limit. However, it is still possible to pay one of the premiums in several instalments (up to a maximum of once per quarter).

The premium can be flat or modulated. Thus, the elements of modulation concerning the beneficiaries are as follows:

  • Remuneration (the employer cannot reserve the bonus for employees whose remuneration is above a certain level. Thus, a ceiling of remuneration may be set, but not a minimum).
  • Duration of actual presence during the past year.
  • Duration of work stipulated in the employment contract.
  • Seniority in the company (new criterion).

Please note that periods of actual presence include maternity leave, adoption leave, paternity and childcare leave,  sick child leave, parental presence leave or absence of an employee who has benefited from an anonymous donation of rest days from another employee (seriously ill/deceased child).

NB: any criterion based on a discriminatory motive or other modulation is strictly prohibited by law.

Moreover, the principle of non-substitution still applies, as the bonus cannot be used as a substitute for bonuses or salary increases provided for by agreement, contract or practice in force in the company or for elements of remuneration paid by the employer.

 

3. Ceilings and social/tax regimes 

3.1 Premium Waiver Limits 

The amount of the premium must not exceed €3,000 per beneficiary per calendar year in order to allow exemptions to apply.

This ceiling may be increased to €6,000 in certain limited cases (companies required to set up profit-sharing schemes and having a profit-sharing agreement on the date of payment of the bonus; companies not required to set up profit-sharing but having a profit-sharing or profit-sharing agreement in the same financial year as the payment of the bonus, etc.).

The premium that exceeds the ceilings will be subject to social security contributions and income tax for the excess portion.

3.2 Social security and tax regime

Companies with fewer than 50 employees:

Until 31 December 2026, the previously applicable preferential regime is maintained. Thus, value-sharing premiums give rise to an exemption from social security contributions within the limits indicated above. Depending on the situation, the applicable social and tax regime will be different:

For employees who have received less than 3 times the value of the annual minimum wage in the last 12 months:

  • Exemption from social security contributions: legal or contractual origin (employee and employer shares), training contribution, apprenticeship tax and construction contribution.
  • Exemption from CSG/CRDS.
  • No income tax.
  • Exemption from the social lump sum regardless of the number of employees in the company.
  • Exemption from payroll tax for concerned employers

For employees who have received more than 3 times the value of the annual minimum wage in the last 12 months:

  • Exemptions from social security contributions: legal or contractual origin (employee and employer shares), training contribution, apprenticeship tax and construction contribution.
  • CSG/CRDS due.
  • Premium subject to income tax.
  • Exemption from the social security package (except for companies with more than 250 employees).
  • Payroll tax due for concerned employers.

NB: As of January 1, 2027, the social and tax regime will be the regime applicable to companies with more than 50 employees.

Employees with more than 50 employees:

For companies with more than 50 employees, the value-sharing law modifies the tax and social security regime applicable from 1 January 2024.

Thus, regardless of the remuneration received by employees, the value-sharing bonuses paid will therefore be fully subject to income tax, CSG/CRDS, payroll tax and social lump sum (except for companies with less than 250 employees, where the social lump sum is not due).

However, the scheme remains advantageous in terms of exemption from social security contributions (employee and employer shares) and social lump sum for companies with fewer than 250 employees.

3.3 Assignment to a savings plan

The major novelty resulting from the Value Sharing Act is the possibility of allocating all or part of this bonus to an employee savings plan or to a retirement savings plan. A decree must specify the time within which the sums may be invested. The savings plans concerned are as follows:

  • PEE
  • PEI
  • PERCO

The interest is to be able to benefit from the income tax exemption (within the limits of the exemption ceilings), in particular for employees with a remuneration greater than 3 times the annual value of the SMIC, or when they are employees of a company with more than 50 employees.

The periods of unavailability of the sums (except in the case of early release) will apply.

                         

 

 

 

 

 

 

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This note contains summarized information. Please contact us for advice tailored to your situation. We cannot be held responsible for any misinterpretation.

Our employment law team is at your disposal to assist you in the drafting of the DUE or the company agreement setting up the exceptional purchasing power bonus.

 

Contact

Claire APPELGHEM

Head of HR/Employment Law

Claire.appelghem@groupe-aplitec.com

01 40 40 38 38

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