Apprenticeship: New Exemption Threshold at 50% of Minimum Wage Effective March 2025

Introduction: A Major Reform of the Social Framework for Apprenticeship

The social framework for apprenticeship in France is undergoing a significant transformation with the enactment of a new exemption threshold for social contributions, reduced to 50% of the minimum wage (SMIC), effective March 1, 2025. This measure, outlined in the Social Security Financing Law for 2025 (LFSS 2025) and detailed in an implementing decree, fundamentally alters the calculation of apprenticeship costs for employers and directly affects the payslip of apprentices.

For payroll administrators, human resources managers, and accountants, this reform necessitates an immediate update of payroll settings and a thorough understanding of the new applicable rules. This article analyzes in detail the changes made, their practical consequences for the payslip, and key points of caution to ensure secure handling of apprentice remuneration.

1. Reminder of the Previous Framework: Exemption at 79% of the SMIC

1.1 The Principle of Historical Salary Exemption

Before March 1, 2025, apprentices enjoyed a total exemption from social contributions, including CSG (General Social Contribution) and CRDS (Contribution for the Repayment of the Social Debt), on the portion of their remuneration not exceeding 79% of the monthly gross SMIC. This threshold, established by Article L. 6243-2 of the French Labour Code in its previous version, aimed to guarantee that apprentices’ net remuneration was as close as possible to their gross remuneration.

Specifically, for a gross monthly SMIC of €1,801.80 as of January 1, 2025 (based on 35 hours), the exemption threshold was set at €1,801.80 × 79% = €1,423.42. As nearly all apprentices received remuneration below this threshold, the exemption covered their entire remuneration in the vast majority of cases.

1.2 A Particularly Favorable Framework

This exemption regime of 79% of the SMIC had the advantage of simplicity: for most apprentices, gross equaled net (excluding any mandatory mutual insurance where applicable). Only older apprentices (26 years and older, earning 100% of the SMIC or the conventional minimum wage) or those in their third year of apprenticeship could exceed the threshold and be subject to social contributions on the excess amount.

2. The New Framework: Reduction of the Threshold to 50% of the SMIC

2.1 Effective March 1, 2025

The LFSS 2025 amended Article L. 6243-2 of the Labour Code to lower the exemption threshold for social contributions from 79% to 50% of the gross monthly SMIC. The implementing decree, published in the Official Journal, set the effective date as March 1, 2025.

The new threshold is therefore set at €1,801.80 × 50% = €900.90 (based on the SMIC as of January 1, 2025). This threshold applies monthly and must be prorated in the case of part-time work, absences, or incomplete months.

2.2 Scope of the Reduction

The reduction in the threshold directly expands the base subject to CSG and CRDS for apprentices considerably. Specifically, any remuneration exceeding 50% of the SMIC is now subject to the following deductions:

• CSG at a rate of 9.20% (of which 6.80% is deductible and 2.40% non-deductible);
• CRDS at a rate of 0.50% (non-deductible).

Thus, the total deductions amount to 9.70% on the portion of remuneration exceeding 50% of the SMIC. The CSG/CRDS base is calculated on 98.25% of the remuneration (applying a 1.75% deduction for professional expenses), subject to four annual social security ceilings.

2.3 Other Employee Contributions Beyond CSG/CRDS

It is important to note that the exemption from salary contributions (health insurance, old age, unemployment) remains applicable within the limit of 50% of the SMIC. Beyond this threshold, general salary contributions become theoretically payable. However, in practice, it is primarily the CSG and CRDS that have the most significant impact on apprentices, while other employee contributions generally remain limited in most remuneration configurations.

3. Impact on the Apprentices’ Wage Scale

3.1 Reminder of the Legal Wage Scale

The minimum remuneration for apprentices is set as a percentage of the SMIC (or the conventional minimum wage if more favorable) based on the apprentice’s age and the year of contract execution. The scale applicable in 2025 is as follows:

Apprentices aged 16-17:

• 1st year: 27% of the SMIC (€486.49)
• 2nd year: 39% of the SMIC (€702.70)
• 3rd year: 55% of the SMIC (€990.99)

Apprentices aged 18-20:

• 1st year: 43% of the SMIC (€774.77)
• 2nd year: 51% of the SMIC (€918.92)
• 3rd year: 67% of the SMIC (€1,207.21)

Apprentices aged 21-25:

• 1st year: 53% of the SMIC (€954.95)
• 2nd year: 61% of the SMIC (€1,099.10)
• 3rd year: 78% of the SMIC (€1,405.40)

Apprentices aged 26 and older:

• All years: 100% of the SMIC (€1,801.80)

3.2 Identifying Affected Apprentices

With the new threshold at 50% of the SMIC (€900.90), apprentices earning above this amount are now subject to the CSG/CRDS on the excess portion. Thus, the following groups are directly impacted:

• Apprentices aged 16-17 in their 3rd year (55% of the SMIC = €990.99);
• Apprentices aged 18-20 starting in their 2nd year (51% of the SMIC = €918.92);
• Apprentices aged 21-25 starting in their 1st year (53% of the SMIC = €954.95);
• Apprentices aged 26 and older (100% of the SMIC = €1,801.80).

Conversely, apprentices aged 16-17 in their 1st year (27% = €486.49) and 2nd year (39% = €702.70), as well as apprentices aged 18-20 in their 1st year (43% = €774.77), remain completely exempt as their remuneration is below 50% of the SMIC.

4. Concrete Impact on the Payslip

4.1 Numerical Example: Apprentice Aged 21 in 2nd Year

Consider an apprentice aged 21 in the 2nd year, earning 61% of the SMIC, which amounts to a gross monthly salary of €1,099.10.

Before March 1, 2025 (threshold at 79% of the SMIC = €1,423.42):

• Gross remuneration: €1,099.10
• Below the 79% threshold → total exemption
• Net payable: €1,099.10

Since March 1, 2025 (threshold at 50% of the SMIC = €900.90):

• Gross remuneration: €1,099.10
• Exempt portion: €900.90
• Portion subject to CSG/CRDS: €1,099.10 – €900.90 = €198.20
• CSG/CRDS base (after 1.75% deduction): €198.20 × 98.25% = €194.73
• CSG: €194.73 × 9.20% = €17.92
• CRDS: €194.73 × 0.50% = €0.97
• Total deducted: €18.89
• Net payable: €1,080.21

Thus, the net loss for the apprentice amounts to €18.89 per month, or approximately €227 per year.

4.2 Numerical Example: Apprentice Aged 26 and Older

For an apprentice aged 26 and older, earning 100% of the SMIC, which totals €1,801.80 gross monthly, the impact is significantly more pronounced:

• Portion subject: €1,801.80 – €900.90 = €900.90
• CSG/CRDS base: €900.90 × 98.25% = €885.13
• CSG + CRDS: €885.13 × 9.70% = €85.86
• Monthly net loss: €85.86, or approximately €1,030 per year

This impact is far from negligible for older apprentices and represents a major point of attention for HR services when informing apprenticeship candidates.

5. Employer Contributions: The General Reduction Applicable

5.1 Common Law Calculation

On the employer’s side, contributions on the remuneration of apprentices are subject to the common law framework. The general reduction of employer contributions (known as the “Fillon Reduction”) is applicable under the same conditions as for other employees. The reduction coefficient is calculated based on the ratio between the gross annual remuneration and the annual SMIC, according to the usual formula.

5.2 Impact on the Overall Cost of Apprenticeship

The general reduction significantly lowers the employer’s cost of apprenticeship, particularly for apprentices whose pay is close to the SMIC. The calculation of the reduction coefficient takes into account the actual remuneration of the apprentice (not a reconstructed remuneration), leading to a high coefficient for the lowest-paid apprentices.

For companies with fewer than 50 employees, the maximum coefficient for the general reduction reaches 0.3194 (2025 value), allowing for substantial reductions in employer contributions. For companies with 50 or more employees, the maximum coefficient is 0.3234 (including FNAL contribution at the increased rate).

6. Hiring Aid for Apprentices in 2025

6.1 Maintenance of the €6,000 Aid

The hiring aid for apprentices, set at €6,000 for the first year of contract execution, is maintained in 2025. This aid is paid monthly (€500 per month for 12 months) and applies to all apprenticeship contracts concluded between January 1 and December 31, 2025, without regard to company size or level of the diploma being pursued.

6.2 Eligibility Conditions

To qualify for the aid, the employer must:

• Conclude an apprenticeship contract between January 1 and December 31, 2025;
• Submit the contract to the skills operator (OPCO) within the regulatory deadlines;
• Transmit the monthly DSN (Déclaration Sociale Nominative) allowing for the automatic payment of the aid by the ASP (Agence de Services et de Paiement).

The aid is cumulative with the social contribution exemptions applicable to apprentices. It significantly offsets the payroll cost of the apprentice in the first year, making apprenticeship financially attractive despite the reform of the exemption threshold.

7. Special Case of the Public Sector

7.1 Specific Exemption Maintained

Employers in the non-industrial and commercial public sector benefit from a specific exemption regime for apprentices, distinct from the common law framework. This regime, provided for in Article L. 6227-8-1 of the Labour Code, offers a total exemption from employer contributions (excluding additional public service retirement contributions) and remains unchanged by the LFSS 2025.

7.2 Relationship with the New Threshold

The reduction of the employee contributions exemption threshold to 50% of the SMIC also applies to apprentices in the public sector. However, the specific employer exemption regime remains unchanged, maintaining an advantage for public employers compared to the common law.

8. Impact on DSN

8.1 Declaration of Employee Contributions

The implementation of the new threshold requires an adaptation of the DSN configurations. Payroll software providers must update the calculation rules to distinguish the exempt portion (up to 50% of the SMIC) from the portion subject to contributions (beyond 50% of the SMIC). The specific personnel type codes (CTP) for apprentices must be accurately filled out to avoid any reporting anomalies.

8.2 Points of Vigilance

Payroll managers must pay particular attention to the following points:

• Prorating the threshold in case of an incomplete month (hiring or departure during the month);
• Prorating the threshold in case of part-time work;
• Managing the transitional period (before and after March 1, 2025, in the same month of March);
• Correctly imputing CTPs on the contribution blocks in the DSN;
• Verifying the applied rates of CSG/CRDS (9.20% + 0.50% on the base after deduction).

9. Impact Analysis: A Paradigm Shift for the Attractiveness of Apprenticeships?

9.1 A Net Increase in Costs for Apprentices

The reduction of the exemption threshold represents a decrease in purchasing power for apprentices whose remuneration exceeds 50% of the SMIC. Although the impact is moderate for younger and less experienced apprentices, it can be significant for those aged 26 and older, where the net loss exceeds €1,000 per year.

9.2 A Political Signal to Monitor

This measure comes amid a search for revenue to finance social security. It reflects a desire to rationalize social exemptions by targeting them more towards the most vulnerable groups. Employer organizations and professional branches have expressed concerns about the potential impact on the use of apprenticeships, particularly for adult populations in professional retraining.

9.3 Maintenance of the €6,000 Aid as a Counterbalance

The maintenance of the €6,000 hiring aid in 2025 is an important compensating factor for employers. This aid, combined with the general reduction in employer contributions, helps to maintain a generally attractive net employment cost for apprentices, despite the increased gross cost associated with the new framework for salary contributions.

FAQ – Frequently Asked Questions about the New Exemption Threshold for Apprenticeships

Does the new 50% threshold apply to ongoing contracts or only to new contracts?

The new 50% SMIC threshold applies to all ongoing apprenticeship contracts from March 1, 2025, not just contracts signed after this date. It represents a modification of the social regime that applies as a matter of law, without any condition related to the date of the contract’s conclusion. Payroll managers must therefore update the treatment of all apprentices’ payslips starting with March 2025 payroll.

How to manage payroll for March 2025, which overlaps between the old and new regime?

For March 2025, two methods are possible: either a prorated application (the old threshold applies from February 1 to 28, then the new threshold from March 1), or the application of the new threshold for the entire month of March. The BOSS (Bulletin Officiel de la Sécurité Sociale) and ministerial instructions recommend applying the new threshold for the entire month of March 2025 for simplification purposes. It is advisable to refer to the guidelines from your payroll software provider.

Is the specific exemption from employer contributions for apprentices modified?

No, the reform solely concerns the threshold for employee contribution exemptions. The regime for employer contributions remains unchanged: the general reduction of employer contributions (Fillon Reduction) continues to apply under the same conditions as before. Employers still benefit from significant reductions in employer contributions for apprentices’ remuneration.

What impact does this have on mandatory health insurance for apprentices?

The employee’s contribution to the mandatory health insurance remains unchanged by the reform of the exemption threshold. The employee’s premium for health insurance is still due under the same conditions as before. However, apprentices whose employee share of health insurance exceeds 10% of their gross remuneration can request an exemption from affiliation. This option remains unchanged and can be particularly relevant for younger apprentices with the lowest pay.

Is the €6,000 hiring aid affected by this reform?

No, the hiring aid for apprentices of €6,000 is entirely independent of the salary contribution regime. It is maintained in 2025 for all apprenticeship contracts, regardless of company size or diploma level. The aid is still paid monthly by the ASP, based on data submitted in the DSN by the employer.