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French social security updatePayroll and social benefits

no. 91

Changes as of 1 January 2017 2Severance payments: reintroduction of golden parachutes for non-management staff 10Increase in the transport contribution in the Paris region 11Widespread application of the DSN system 12Court of Cassation confirms its position on meal allowances 14Gradual roll-out of the BTP card 15in brief 16

1st quarter 2017

Changes as of 1 January 2017

Monthly social security ceiling

From 1 January 2017, the social security ceiling has risen to €3,269 per month, which represents an annual ceiling of €39,228.

The ceilings for the following reference periods are set out below:

• quarterly ceiling: €9,807,

• fortnightly ceiling: €1,635,

• weekly ceiling: €754,

• daily ceiling: €180,

• hourly ceiling (used for periods of less than 5 hours per day): €24.

Minimum wage and guaranteed minimum income

Minimum wage from 1 January 2017

The hourly minimum wage has risen from €9.67 to €9.76, gross.

For an employee paid on a monthly basis and subject to the legal working time (35-hour week), the gross monthly minimum wage is set at €1,480.27 per month (versus €1,466.62 previously).

This increase on 1 January corresponds to the automatic increase provided by law with no additional increase decided by the French government.

The increase in the minimum wage has an impact on:

• the calculation of the Fillon reduction (reduction of employer contributions for low wages) and the assessment base of the competitiveness and employment tax credit (CICE),

• the minimum salary and contribution base for apprentices,

• the minimum salary under a professional training contract.

Guaranteed minimum income

The guaranteed minimum income remained unchanged at €3.54 at 1 January 2017.

Social security and AGS contributions

Sickness insurance contribution

From 1 January 2017, the employer contribution to sickness insurance has increased by 0,05%, from 12.84% to 12.89%.

However, the employee contribution to the supplementary sickness insurance scheme in Alsace Moselle remains unchanged (1.50% of total gross salary).

State pension contribution

In compensation for the reduced family allowance contribution, the employer contribution to uncapped pension benefits rose from 1.85% to 1.90% on 1 January 2017 and the employee contribution from 0.35% to 0.40%. However, the contributions to capped pension benefits remain unchanged in 2017 (6.90% for the employee contribution and 8.55% for the employer contribution).

AGS contribution

The 14 December 2016 Board of Directors’meeting of France’s association for the management of employee claims (Association pour la gestion du régime de Garantie des créances des Salariés – AGS) decided to lower the contribution rate from 0.25% to 0.20% from 1 January 2017.

French social security update | 91 | Payroll and social benefits 1st quarter 2017 2

Changes as of 1 January 2017 2Severance payments: reintroduction of golden parachutes for non-management staff 10Increase in the transport contribution in the Paris region 11Widespread application of the DSN system 12Court of Cassation confirms its position on meal allowances 14Gradual roll-out of the BTP card 15In brief 16

This contribution is borne entirely by the employer and cannot exceed four times the social security ceiling, i.e., €13,076 per month in 2017.

Difficult working conditions

To ensure the administrative management, organisation and operation of the Compte Pénibilité account (for employees with difficult working conditions, entitling them to professional training, part-time work or early retirement), the Act of 20 January 2014 created a fund made up of the following contributions:

• the additional contribution payable to the URSSAF (code CTP 451), which has been in effect since 2015 and rose from 0.1% to 0.2% from 1 January 2017, based on salaries paid to employees exposed to one of the risk factors,

• from 1 January 2017, a general contribution (code CTP 450) payable at a rate of 0.01% of all gross salaries paid to employees falling within the scope of the regulations on the prevention of difficult working conditions, even if said employees are not exposed to any of the risk factors.

Fillon reduction

In view of the increase in the employer contribution to capped pension benefits and sickness insurance and the rise in the minimum wage, the “T” (sum of employer contribution rates) and “annual minimum wage” inputs used to calculate the Fillon reduction have increased accordingly.

Minimum points guarantee

Unlike in previous years, the definitive value of the minimum points guarantee (garantie minimale de points – GMP) was set before the end of the first quarter of the year (see French social security update no. 90 for the 4th quarter of 2016).

Consequently, the cut-off salary to be eligible for this top-up contribution is set at €43,337.78 per year, corresponding to €3,611.48 per month (i.e., a monthly ceiling of €3,269 plus €342.48 falling within salary bracket B).

In any event, this additional base amount corresponding to the GMP base is not subject to the other contributions collected by the AGIRC fund (contributions to the Agence pour l’emploi des cadres – APEC), the agency for the employment of managers, Contribution Exceptionnelle et Temporaire (CET), and the Association pour la gestion du fonds de financement (AGFF), the body that manages funds for workers retiring before the legal retirement age).

Payroll tax

Reminder: modified tax base

The 2013 Social Security Finance Act (Loi de financement de la Sécurité Sociale) modified the payroll tax base, which no longer corresponds to the social security contribution base but is now identical to the base for the CSG, a tax introduced to supplement social security funding, defined in article L136-2 of the French Social Security Code (Code de sécurité sociale).



Payroll tax therefore also applies to items of salary that are not included in the social security contribution base but are subject to the social contribution taxes (CSG and CDRS). These items include profit-sharing, incentive arrangements, top-up payments made by the employer to a company savings plan, employer contributions to a benefits and pension scheme, severance payments, etc.

This change does not result in the application of the 1.75% discount for business expenses.

2017 rate schedule

In light of the increase in the income tax rates, the payroll tax rate schedule for 2017 has been adjusted as follows:

• a rate of 4.25% will apply to the portion of annual salaries below €7,721,

• a rate of 8.50% will apply to the portion of annual salaries between €7,721 and €15,417,

• a rate of 13.60% will apply to the portion of annual salaries between €15,417 and €152,179,

• a rate of 20% will apply to the portion of annual salaries above €152,179.

Payroll tax reduction for non-profit organisations

Until 31 December 2013, non-profit organisations, trade associations and member-unions, charitable foundations, religious congregations, state-approved associations and mutual insurance companies governed by the French Mutual Insurance Code (Code de la mutualité), with fewer than 30 employees, received a discount of €6,002 on the payroll tax amount normally due.

On 1 January 2014, this discount was increased to €20,161 on the grounds that such organisations are ineligible for the competitiveness and employment tax credit (CICE) because they are not subject to corporation tax. From 1 January 2017, this discount is set at €20,304.

Accommodation allowances

When an employer provides accommodation, it may choose to value this benefit in kind (except in the case of managers) based either on the rental value of the accommodation or on a monthly flat rate calculated based on the number of rooms and the employee’s salary with reference to the monthly social security ceiling.

Valuation based on rental value

The value of the benefit in kind can be estimated based on the accommodation’s rental value by referring to the value used to calculate the local residence tax (registered rental value), which is revised annually using a formula.

The actual amount of the associated costs (water, electricity, gas, heating and parking) paid by the employer are added to the accommodation’s valuation.

The other expenses paid by the employer but which are usually incurred by the occupant such as the local residence tax or insurance cover constitute a cash benefit subject to contributions.



Flat-rate valuation

The 2017 rate schedule is as follows:

Monthly salary One main room Several rooms

Less than €1,634.50 €68.50 €36.60 per room

From €1,634.50 to €1,961.39 €80.00 €51.40 per room

From €1,961.40 to €2,288.29 €91.30 €68.50 per room

From €2,288.30 to €2,942.09 €102.60 €85.50 per room

From €2,942.10 to €3,595.89 €125.60 €108.40 per room

From €3,595.90 to €4,249.69 €148.40 €131.10 per room

From €4,249.70 to €4,903.49 €171.20 €159.70 per room

More than €4,903.50 €194.00 €182.60 per room

This rate schedule corresponds to a monthly valuation. The weekly valuation is equal to one quarter of the monthly amount rounded to the nearest ten cents. These valuations cover complete weeks or months, regardless of the number of working days.



Meal allowances

Principle

The flat rate of this benefit in kind is set at €4.75 per meal (€9.50 for one day with two meals) from 1 January 2017.

For employees taking their meals in a canteen, the employer contribution is not considered as a benefit in kind and is not included in the contribution base, provided that the employee contribution is at least equal to half of the flat rate per meal, i.e., €2.38 in 2017.

Hotels, cafés, restaurants and casinos

From 1 January 2017, meal allowances for employees working in these sectors remained unchanged at:

• €3.54 (1 x the guaranteed minimum) per meal,

• €7.08 (2 x the guaranteed minimum) per day.

Business expenses

Reminder

Fixed allowances for business expenses are excluded from the social security contribution base if used for their intended purpose. This condition is deemed satisfied if the allowance amount does not exceed certain limits. They are adjusted on 1 January of each year. The new exemption limits apply to salaries and earnings paid from 1 January 2017, and relate to periods of employment from that date.



Meals

• A fixed allowance of €6.40 (comparable to the former meal allowance) is paid when meals have to be provided at the workplace due to special conditions of organisation or work schedules (work in teams, in shifts, at night, continuous shift schedule, staggered working hours, etc.).

• A fixed meal allowance of €9.00 is paid in the case of travel outside the company premises or on a construction site, or when working conditions prohibit employees (or those with equivalent status) from returning home or to their place of work for meals (comparable to meals previously provided at the construction site), unless it can be shown that meals have to be taken in a restaurant because of the circumstances or standard business practice.

• A fixed meal allowance of €18.40 (comparable to the former restaurant allowance for management and non-management staff) is paid in case of business travel and to employees (or those with equivalent status) that are unable to return home or to their place of work.

Travel allowance

For travel in metropolitan France and when employees (or those with equivalent status) cannot return home every day, a fixed travel allowance is deemed used for its intended purpose for the portion that does not exceed:

• During the first three months of travel:

– €18.40 for allowances provided to compensate for additional meal expenses in the case of business travel in metropolitan France,

– €65.80 per day for allowances provided to compensate for additional expenses for accommodation and breakfast for travel to Paris and to the Hauts-de-Seine, Seine-Saint-Denis, and Val-de-Marne départements,

– €48.90 per day in the other départements of metropolitan France.

• From the 3rd to the 24th month of travel:




• From the 24th to the 72nd month of travel:




Job relocation

Costs incurred by employees when relocating for their job may be deducted from the social security contribution base under certain conditions.

Fixed allowances are deemed used for their intended purpose up to:

• €73.20 per day for a period not exceeding nine months for allowances provided to compensate for the costs of temporary accommodation and additional meal costs, while waiting for permanent housing,

• €1,466.20 (plus €122.20 per dependent child up to €1,832.80) for allowances provided to compensate for costs related to moving into new housing.

Regarding allowances provided to compensate for moving expenses incurred by the employee, the employer has to substantiate the expenses incurred.



Exemption limits

Employers’ share of meal voucher costs

From 1 January 2017, the exemption limit applicable to meal vouchers has risen from €5.37 to €5.38.

Moreover, given that the employer contribution to meal vouchers must be between 50% and 60% of the voucher’s value without exceeding €5.38, the maximum value of the meal voucher must be between €8.97 (for 60% contributions) and €10.76 (for 50% contributions).

Works council vouchers

Following the increase in the social security ceiling to €3,269 per month on 1 January 2017, the exemption limit applicable to purchase and gift vouchers issued by the works council, or by the company if it does not have a works council, is set at €163.45 per employee per calendar year.

Internship allowances

The mandatory hourly allowance to be paid to interns undertaking an internship lasting more than two months remains set at €3.60 for contracts signed on or after 1 January 2017. This minimum allowance also constitutes the exemption threshold of internship allowances from contributions.

It should be noted that this allowance may not be less than 15% of the hourly social security ceiling, which remains set at €24 for 2017.

Increase in the employer contribution on free shares

Under the 2017 Finance Act (Loi de Finances), the rate of the employer contribution payable on the value of free share awards is increased from 20% to 30%. The exemption applicable to some SMEs from paying this contribution is maintained.

This increase in the employer contribution will be applicable to free shares allocated on the decision of an Extraordinary General Meeting taking place after the publication of the 2017 Finance Act, i.e., after 31 December 2016.

Withholding tax rate schedule

Pending the decree which sets the annual withholding tax rate schedule, the tax authorities have published an update to the 2016 rate schedule applicable to salaries paid in 2017.

Rate(1)Brackets according to the period to which the payments relate (in euros)

Year Quarter Month Week Day or part of a day

0% up to 14,461 up to 3,615 up to 1,205 up to 278 up to 46

12%between 14,461

and 41,951between 3,615

and 10,488between 1,205

and 3,496between 278

and 807between 46

and 134

20% above 41,951 above 10,488 above 3,496 above 807 above 134

(1) The rates of 12% and 20% are reduced to 8% and 14.4% in the French overseas départements.



Competitiveness and employment tax credit (CICE)

The 2017 Finance Act provides for an increase in the rate of the competitiveness and employment tax credit (CICE) from 6% to 7% of total payroll for salaries paid from 1 January 2017 for companies subject to VAT, and the creation of a tax credit from which non-profit organisations can benefit.

This tax credit will apply to the payroll tax paid by non-profit organisations and will be calculated at the rate of 4% on salaries not exceeding 2.5 times the minimum wage.

Legal interest rate at 1 January 2017

Since 1 January 2015, there have been two legal interest rates in effect, one for debt held by individuals and another for all other borrowers.

These rates are calculated at six-monthly intervals and have just been adjusted for the first half of 2017.

From 1 January 2017, the legal interest rates are as follows:

• 4.16% (versus 4.35% in the second half of 2016) for debt held by individuals for non-professional purposes,

• 0.90% (versus 0.93% in the second half of 2016) in all other cases.



Severance payments: reintroduction of golden parachutes for non-management staff

In French social security update no. 87 for the first quarter of 2016, we talked about a relaxation of the rules regarding social security contributions on severance payments for non-management staff.

This relaxation was the result of the removal from the French Social Security Code of the notion of golden parachutes capped at ten times the social security ceiling, which meant that employees lost their right to the exemption from social security contributions on their severance payments within the limit of two times the social security ceiling (i.e., €78,456 for 2017).

Therefore, in the event that the total amount of the severance payment received by an employee after 1 January 2016 exceeded the threshold of ten times the social security ceiling, it was not necessarily subject to contributions from the first euro. However, the 2016 Social Security Finance Act failed to make similar amendments to paragraph 5 of article L136-2 of the French social security code governing the CSG supplementary social security tax, which meant that employees were liable for CSG/CRDS social security contribution taxes on the totality of their severance payment.

This oversight was entirely unintentional on the part of the members of the French parliament and senators.

The 2017 Social Security Finance Act has therefore amended the legislation to reintroduce the notion of golden parachutes for the application of social security contributions.

This amendment simplifies the management of severance payments as the notion of golden parachutes equal to ten times the social security ceiling (€392,280 for 2017) will have the same logical impact on both social security contributions and CSG/CRDS social security contribution taxes – namely that employees shall lose their right to exemption from both within two times the social security ceiling.

It will be applicable to terminations notified as of 1 January 2017.



Increase in the transport contribution in the Paris region

The 2017 Finance Act provides for an increase in the maximum rate of the transportation network contribution in the Paris region.

New applicable rates

The rate applicable in Paris and the Hauts-de-Seine can now be increased from the current 2.85% to 2.95%.

The rate applicable in Seine Saint-Denis can now be increased from the current 1.91% to 2.12%.

The rates applicable in the départements of Yvelines, Essonne, Seine-et-Marne and Val-d’Oise can now be increased from the current 1.50% or 1.91% to 1.60% or 2.01%, depending on the commune.

These new rates were subject to formal decision by the Paris region public transport authority (Syndicat des transports d’Île-de-France – STIF).

The STIF decided to adopt them at a meeting on 11 January 2017.

Effective date

For two years now, amendments to the rate of the transport contribution have come into effect on either 1 January or 1 July, following a two-month notice period, which has meant informing companies of the amendment to the rate before either 1 November or 1 May of each year.

As an exception to this practice, under the 2017 Finance Act, the decision taken by the STIF regarding the rates applicable in the Paris region in 2017 can come into effect on the first day of the third month following the decision.

This is consistent with the two-month notice period, and, for example, the decision made by the STIF in January 2017 can come into effect from 1 April 2017.

Summary

Départements Rate applicable until 31 March 2017 Rate applicable from 1 April 2017

Paris and Hauts-de-Seine 2.85% 2.95%

Seine-Saint-Denis and Val-de-Marne

1.91% 2.12%

Yvelines, Essonne, Seine-et-Marne and Val-d’Oise(1)

1.50% or 1.91%, depending on the commune

1.60% or 2.01%, depending on the commune

(1) See article R2531-6 of the French General Local Authorities Code (Code général des collectivités territoriales) for a list of the communes in which the higher rate applies.



Widespread application of the DSN system

Entry into force of phase 3

From 1 January 2017, the single monthly electronic payroll return (déclaration sociale nominative – DSN) system enters phase 3, and employers now have to declare all of their contributions on their monthly DSN, including contributions to supplementary pension and social welfare funds. Failing this, penalties may be applied.

Only employers in the agricultural sector who declared less than €3,000 in contributions in 2014 are exempt from sending a monthly DSN from January 2017, but they will in principle be expected to comply as of 1 April 2017 when the DSN system is rolled out to all employers (www.dsn-info.fr/documentation/guide-demarrage-p3.pdf).

However, given the difficulties experienced by some welfare funds (insurance companies, private healthcare insurers, etc.), the Association of Chartered Accountants has requested that phase 3 be postponed.

This request for postponement principally concerns companies who sub-contract the preparation of their payslips and social security contribution declarations to a declaring third party, and in particular to companies whose declaring third parties have encountered configuration problems due to the high number of different social security bodies (in contrast to supplementary pension groups).

Because the difficulties are not attributable to the declaring third parties, it has already been announced that allowances will be made in the event of late compliance with phase 3 of the DSN system and with respect to the penalties provided for in the legislation.



Inevitable consequences

We already know that regulations are going to have to be harmonised and that the existing rules on the base, rate and calculation of contributions are not going to be able to remain in force after the widespread application of the DSN system.

From 1 January 2018, the rates and ceilings used to calculate social security contributions and CSG/CRDS social contribution taxes will therefore no longer be those in force at the date on which salaries are paid but rather those in force during the period during which the work was performed.

In other words, over are the days when companies with more than nine employees or very small businesses not having requested authorisation to apply the ceilings in force during the period corresponding to the work performed could apply the rates and ceilings in force on the salary payment date.

Small, mid-sized and large companies will now be treated in the same way because the rule governing the payment of social security contributions is also going to change.

In principle, all companies will have to pay their contributions monthly from 1 January 2018. Small companies with less than ten employees will be able to continue paying their contributions quarterly, if they so wish, provided that they request authorisation from their URSSAF office before 31 December 2017 – and above all, that they do so sufficiently in advance to avoid late payment penalties and interest.

The process under which employers make all of their adjustments at the end of the year will be abolished from 1 January 2017 and replaced by a system of progressive adjustment under which they will make monthly adjustments at the end of the first payroll period following an error, failing which a penalty may be applied.

It is likely that we will see yet more measures to harmonise the rules for calculating social security contributions: the government has been authorised to introduce whatever provisions it sees fit to amend the calculation, declaration and payment of contributions.



Court of Cassation confirms its position on meal allowances

The decision had been pending (Cass. soc, decision no. 15-23341, 11 January 2017).

It was preceded by a decision handed down by the Social Security Chamber of the Court of Cassation on 17 December 2014 with respect to the allocation of meal allowances to delivery drivers of a company subject to the road transport collective agreement.

In 2014, the Court of Cassation refused to include meal allowances in the calculation base for paid-holiday or sickness benefits because it considered that they should not be treated as a top-up salary but rather as a business expense (i.e., unavoidable additional costs incurred by employees to cover meals).

The case decided on 11 January 2017 was brought by a trade union that wanted meal allowances to be included in the calculation of paid-holiday benefits. Its argument was simple:

• on the one hand, the amounts paid cannot constitute a business expense because they are allocated in a fixed amount without employees needing to provide any proof,

• on the other hand, the amounts are systematically paid to employees because of constraints imposed by their jobs, meaning that they could be treated as a hardship allowance.

The Court of Cassation was not convinced by these arguments. It recalled that a fixed allowance is paid when meals have to be provided at the workplace due to special conditions of organisation or work schedules (work in teams, in shifts, at night, continuous shift schedule, staggered working hours, etc.) and that such fixed allowances are not subject to the provision of proof.

In this respect, the reasoning applied by the Court of Cassation is similar to that applied by URSSAF when it publishes the fixed allowances for business expenses rate schedule each year.

It concluded that fixed allowances paid exclusively during employees’ working hours are compensation for constraints imposed by their jobs and should be considered as business expenses. In addition, it ruled that employers must be able to prove that the employees were working in order to justify the payment of the allowances. Any type of evidence is accepted: work schedules, site visit reports, delivery slips, etc.

Consequently, the allowances must neither be maintained in the absence of an employee due to sickness or annual leave, nor be included in the calculation of any item of his or her salary, such as paid-holiday benefits.



Gradual roll-out of the BTP card

The BTP card launched by the Macron Law of 6 August 2015 entered into force on 5 December 2016.

It is compulsory for all employees of a company who are likely to be on a building site to have a BTP card, with the exception of employees who do not participate in the work (at any stage of project implementation up to supervision) or are in charge of cleaning the site after delivery as well as sales staff and interns.

The BTP card is set to be rolled out across France according to the following timetable:

• January 2017: Nouvelle Aquitaine and Occitanie,

• February 2017: Pays-de-la-Loire, Centre-val-de-Loire, Grand-Est and Bourgogne-Franche-Comté,

• March 2017: Provence-Alpes-Côte-d’Azur, Auvergne-Rhône-Alpes and Corsica,

• April 2017: Brittany, Hauts-de-France and Normandy,

• June 2017: Ile-de-France and the overseas départements.

The gradual roll-out of the BTP card applies only to employees and temporary employees working for companies established in France. For employees and temporary employees working for foreign companies, the French Ministry of Labour website indicates that a BTP card must be obtained for every employee and temporary employee seconded to France, without regard to the above timetable.

Subsequent to the start-up of the BTP card in each zone, there will be two different scenarios for companies established in France:

• for employees and temporary employees who fall within the scope of the BTP card at start-up, they will have to apply for cards within a maximum of two months,

• for employees and temporary employees who fall within the scope of the BTP card after start-up, regardless of whether they are newly hired or have been assigned new tasks referred to in article R8291-1 of the French Labour Code (Code du travail), they will have to apply for cards immediately.



2017 financial guarantee requirement for temporary work agencies

A decree dated 26 December 2016 set at €123,594 the minimum amount of the mandatory financial guarantee that temporary work agencies must maintain in order to be able to guarantee the payment of the salaries owed to temporary employees as well as the associated social security contributions, in the event of their default.

This amount had previously been set at €120,680 by a decree dated 29 December 2014.

Extension of the “SME employment” scheme

The “SME Employment Scheme” (“Embauche PME”), an employment initiative aimed at SMEs that was launched on 18 January 2016, has been extended for a further six months.

We remind you that the “SME employment” scheme is intended to encourage SMEs to hire employees with salaries up to 1.3 times the minimum wage.

It is reserved for companies with fewer than 250 employees and involves paying them a grant of €500 each three-month period for every new employee hired on a permanent or fixed-term contract lasting six months or more between 18 January and 31 December 2016, over the first two years of the contract, i.e., a total of €4,000.

The scheme will therefore continue to apply to employees hired under the same conditions until 30 June 2017. It has also been extended in Mayotte (decree dated 31 January 2017).

However, the first employee grant scheme, which had already been extended until 31 December 2016, has not been renewed for 2017.

Sanctions for impeding a URSSAF inspection which vary according to the contributor

Under the 2017 Social Security Finance Act, the sanctions applied for impeding a URSSAF inspection have been amended. They will henceforth take into account the status of the contributor and will vary depending on whether said contributor is an employer, a self-employed person or a private employer.

Mileage allowances

The flat-rate scale for calculating mileage allowances for 2016 income has not yet been published by the French tax authorities. It is expected to be published in the first quarter of 2017.

in brief



What has stayed the same at 1 January 2017

Family allowance contributions

Companies qualifying for the Fillon reduction will continue to be eligible for the reduced family allowance contribution rate. The applicable family allowance contribution rates are therefore as follows:

• 3.45% for salaries that do not exceed 3.5 times the annual minimum wage,

• 5.25% for salaries that exceed 3.5 times the annual minimum wage.

We remind you that, in contrast to the Fillon reduction which is degressive, as soon as a salary exceeds 3.5 times the annual minimum wage, the family allowance contribution reverts to the standard rate of 5.25%.

Unemployment insurance

Unemployment insurance contribution rates (2.40% for the employee contribution and 4% for the employer contribution) remain unchanged in 2017.

These rates apply within a limit of four times the social security ceiling, i.e., €13,076 per month for 2017.

Supplementary pension contributions

Effective date

Monthly salary bracket Overall rate

Employer contribution

Employee contribution

From 1 January 2017Bracket 1 from €0 to €3,269 7.75% 4.65% 3.10%

Bracket 2 from €3,269 to €9,807 20.25% 12.15% 8.10%

Effective date

Monthly salary bracket Overall rate

Employer contribution Employee contribution

From 1 January 2017

Bracket B from €3,269 to €13,076 20.55% 12.75% 7.80%

Bracket C from €13,076 to €26,15220% See breakdown adopted pursuant to company agreement

0.55% 0.19% 0.36%

Effective date

Categories Monthly salary bracket Overall rate

Employer contribution

Employee contribution

From 1 January 2017

Non-management staffBracket 1 from €0 to €3,269 2.00% 1.20% 0.80%

Bracket 2 from €3,269 to €9,807 2.20% 1.30% 0.90%

Management staff

Bracket A from €0 to €3,269 2.00% 1.20% 0.80%

Bracket B from €3,269 to €13,076 2.20% 1.30% 0.90%

Bracket C from €13,076 to €26,152 2.20% 1.30% 0.90%

ARRCO pension fund contributions did not increase on 1 January 2017.

AGIRC pension fund contributions also remained unchanged at 1 January 2017.

AGFF contributions.



The contribution rate to OPPBTP

The contribution rate of companies affiliated with the OPPBTP, the professional organisation for the prevention of accidents in construction and public works, remains set at 0.11% of the amount of salaries paid by the employer in 2017, including the amount of paid-leave benefits for which a contribution is collected by the paid leave funds.

The OPPBTP contribution base corresponds to the gross payroll declared for the purpose of calculating paid leave contributions. The rate of 0.11% is increased by a coefficient of 1.1314, bringing the actual contribution rate to 0.1244% of gross payroll, excluding paid-leave benefits.

This contribution is payable each calendar quarter based on the hours worked during the quarter preceding the date of collection by the paid-leave funds, under the same conditions as those applicable to paid-leave contributions.

However, the requirement introduced by the 2015 Social Security Finance Act that responsibility for the payment of contributions calculated on the amount of paid-leave benefits be transferred from paid-leave funds to employers by 1 April 2018 is cancelled by the 2017 Social Security Finance Act.

Adjustment of exemptions from employer contributions in the overseas départements

The conditions that must be met in order for companies located in overseas départements (Guadeloupe, Guyane, Martinique, Réunion, Saint-Barthélemy and Saint-Martin) to be eligible for exemption from employer contributions remain unchanged at 1 January 2017.



However, the 2017 Social Security Finance Act abolishes the requirement for companies located in Saint Barthélemy to be subject – either automatically or voluntarily – to direct taxation in order to be eligible for the employer contribution exemption, which is applicable to companies with less than 250 employees and reporting revenue of less than €50 million.

Wage attachment

2017 rate schedule

The rate schedule has not been adjusted for 2017 and was therefore as follows at 1 January 2017:

• 1/20 on the portion that is lower than or equal to €3,730,

• 1/10 on the portion that ranges between €3,730 and €7,280,





• the entire amount on the portion that is higher than €21,590.

Each bracket is increased by €1,420 per year per dependant of the debtor subject to attachment or the assignor (dependants qualifying for family allowances and a spouse, partner or ascendant whose personal income is below the active solidarity income [RSA]).

Monthly rate schedule

• 1/20 on the portion that is lower than or equal to €310.83,

• 1/10 on the portion that ranges between €310.83 and €606.66,

• 1/5 on the portion that ranges between €606.66 and €904.16,

• 1/4 on the portion that ranges between €904.16 and €1,200.83,

• 1/3 on the portion that ranges between €1,200.83 and €1,497.50,

• 2/3 on the portion that ranges between €1,497.50 and €1,799.16,

• the entire amount on the portion that is higher than €1,799.16.

Each bracket is increased by €118.33 per month per dependant of the debtor subject to attachment or the assignor (dependants qualifying for family allowances and a spouse, partner or ascendant whose personal income is below the active solidarity income [RSA]).

Amount of salary which cannot be attached and increase in the RSA

In any case, the employee subject to the attachment must be left with an amount equal to the active solidarity income (RSA) for a single person. This amount corresponds to the portion of salary which cannot be attached, and which rose from €524.16 to €535.17 on 1 September 2016. It is expected to be adjusted on 1 April 2017.



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PwC publishes regular social security policy updates.

This newsletter provides a summary of the regulations in force relating to payroll and employment contracts.

It should therefore only be viewed as a basic reference document. Please contact PwC if you require more detailed information on any particular issues.

You can also visit the “Services aux entrepreneurs” (Services for entrepreneurs) section of our website:

www.services-entrepreneurs.pwc.fr

PwC

63 rue de Villiers92 208 – Neuilly sur Seine CedexTel.: 01 56 57 55 00 | Fax: 01 56 57 57 58

Contact: Philippe Hurez

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. PricewaterhouseCoopers France, and/or any member of the PwC network may not be held liable for any decision taken on the basis of the information contained in this publication, or the consequences thereof. © 2017. PricewaterhouseCoopers Entreprises. All rights reserved.

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