New details on the value-sharing bonus

BOSS provides two clarifications concerning the value-sharing bonus. In addition, two draft decrees complete the value-sharing law of November 29, 2023.   1/ The BOSS update The BOSS was updated on April 19, 2024 on the value-sharing bonus applicable and enforceable since May 1^st, 2024: A first update concerns the case of the payment of two bonuses per year. As a reminder, since December 1^st, 2023, the value-sharing bonus may be paid twice in the same calendar year, up to the overall limit of the exemption ceiling (€3,000 per employee per year; €6,000 per employee per year if the employer is implementing, at the date of payment of the bonuses, or has concluded an incentive or profit-sharing scheme). However, the law stipulates that “the payment of the bonus or the two bonuses may be made in one or more instalments, up to a maximum of once per quarter, during the calendar year”, which seems to rule out the payment of two instalments in the same quarter if two bonuses are awarded.   To put an end to this uncertainty, the BOSS clarifies that, in the event of two bonuses being awarded in the same calendar year, two payments may be made in the same quarter, provided that they are distinctly linked to the two bonuses awarded. The second update concerns the social security treatment of PPV allocated to a savings plan.   As a reminder, bonuses allocated to a company savings plan (PEE) or retirement savings plan (PER) are subject to the following deductions:

• Contribution sociale généralisée (CSG) with application of the 1.75% allowance for professional expenses ;
• Social debt repayment contribution (CRDS) ;
• Payroll tax ;
• Forfait social, where applicable (at the 20% rate applicable to profit-sharing payments for all companies with more than 250 employees).

  The French tax authorities now specify that these provisions apply subject to the conditions for exemption concerning :

• Bonuses paid between 1^st July 2022 and 31 December 2023 to employees earning less than 3 Smic ;
• Bonuses paid between 1^st January 2024 and 31 December 2026 to employees earning less than 3 Smic for companies with fewer than 50 employees.

Bonuses meeting these conditions are exempt from CSG-CRDS, payroll tax and social security contributions, even if they are allocated to an employee savings plan.  

2/ The two draft decrees implementing the Value Sharing Act 2023-1107 of 29 November 2023 Two draft decrees supplement the Value Sharing Act of 29 November 2023. The first draft decree specifies the methods for calculating the threshold of 11 employees above which companies not covered by the obligation to set up profit-sharing and making regular profits must, on an experimental basis and for a period of five years, for financial years after 31 December 2024, implement a value-sharing scheme. The draft decree also specifies the methods for calculating the fifty-employee threshold entitling employees to tax exemption for the value-sharing bonus. The number of employees is determined in accordance with the procedures set out in I of Article L. 130-1 of the Social Security Code. The draft decree creates three new cases for the early release of company savings plans (PEE) linked to the energy-efficiency renovation of the principal residence, the purchase of a clean vehicle, and the activity of a close carer. It specifies that the funds may be released at any time for the purpose of providing care. The overall ceiling for employer contributions to the PEE is raised from 8% to 16% of the annual social security ceiling in the case of unilateral employer contributions for the acquisition of company shares. The second draft decree specifies the deadline and procedures for informing employees and allocating the value-sharing bonus to an employee savings plan or a company pension savings plan. For the record, the law authorises employees to invest the sums arising from the PPV in an employee savings plan or a retirement savings plan. The draft decree sets out the terms and conditions for this. Employees must make their request within a maximum of 15 days of receiving a separate pay slip informing them of the amount allocated to them and which they may request to be paid out. In companies with an employee savings plan or retirement savings plan, this form must be produced for each payment made under the PPV. The form, which is separate from the pay slip, is sent to the employee by any means that provides proof of receipt. These draft decrees are currently being presented to the social partners and should shortly be published in the Journal Officiel.