Apprenticeships: New Exemption Threshold Reduced to 50% of the Minimum Wage Starting March 2025

Introduction: A Major Reform of the Social Regime for Apprenticeships

The social regime for apprenticeships has undergone significant transformation with the introduction of a new threshold for exemption from employee contributions, lowered to 50% of the minimum wage (SMIC). This measure, provided for by the Social Security Financing Act for 2025 (LFSS 2025) and specified by an implementing decree, fundamentally changes the calculation of the cost of apprenticeships for companies and directly impacts the pay slips of apprentices.

For payroll managers, HR managers, and accountants, this reform requires 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 on pay slips, and the points of vigilance to be observed to secure the remuneration processing of apprentices.

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

1.1 The Principle of Historic Exemption

Until March 1, 2025, apprentices benefited from a total exemption from employee contribution, including CSG (General Social Contribution) and CRDS (Contribution for the Repayment of Social Debt), on the portion of their pay not exceeding 79% of the gross monthly minimum wage (SMIC). This threshold, set by Article L. 6243-2 of the Labour Code in its previous wording, aimed to ensure that apprentices’ net pay was as close as possible to their gross pay.

Specifically, for a gross monthly minimum wage (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. Given that almost all apprentices earned below this threshold, the exemption covered their entire remuneration in the vast majority of cases.

1.2 A Particularly Favorable Regime

This regime of exemption at 79% of the SMIC had the advantage of simplicity: for most apprentices, their gross pay equaled their net pay (excluding mandatory health insurance when applicable). Only older apprentices (26 years and older, paid at 100% of the SMIC or the conventional minimum wage) or those in their third year of apprenticeship could see their remuneration exceed the threshold and be subject to employee contributions on the excess portion.

2. The New Regime: Lowering the Threshold to 50% of the SMIC

2.1 Entry into Force on March 1, 2025

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

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

2.2 Scope of the Reduction

The lowering of the threshold has the direct consequence of significantly expanding the base subject to CSG and CRDS for apprentices. Indeed, for any remuneration exceeding 50% of the SMIC, the apprentice’s pay is now subject to the following contributions:

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

The total contributions 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 (after applying a 1.75% deduction for professional expenses), within the limit of four annual ceilings of Social Security.

2.3 Other Employee Contributions Beyond CSG/CRDS

It is important to clarify that the exemption from other employee contributions (health insurance, retirement, unemployment) remains applicable within the limit of 50% of the SMIC. Beyond this threshold, standard employee contributions become theoretically applicable. However, in practice, it is principally the CSG and CRDS that have the most significant impact on apprentices, with other employee contributions remaining limited in most remuneration configurations.

3. Impact on the Remuneration Grid for Apprentices

3.1 Reminder of the Legal Remuneration Grid

The minimum remuneration for apprentices is set as a percentage of the SMIC (or the conventional minimum wage if more favorable) according to the apprentice’s age and the year of execution of the contract. The grid 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 over:

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

3.2 Identification of Impacted Apprentices

With the new threshold at 50% of the SMIC (€900.90), apprentices whose remuneration exceeds this amount are now subject to CSG/CRDS on the excess. The following are directly impacted:

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

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

4. Concrete Impact on the Pay Slip

4.1 Numerical Example: Apprentice Aged 21 in the 2nd Year

Let’s consider the example of a 21-year-old apprentice in the 2nd year, earning 61% of the SMIC, i.e., €1,099.10 gross monthly.

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

• Gross remuneration: €1,099.10
• Remuneration below the 79% threshold → total exemption
• Net to pay: €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 to pay: €1,080.21

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 Over

For an apprentice aged 26 and over, earning 100% of the SMIC at €1,801.80 gross monthly, the impact is much more significant:

• 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 departments when informing apprenticeship candidates.

5. Employer Contributions: General Reduction Applicable

5.1 Standard Calculation

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

5.2 Impact on the Overall Cost of Apprenticeships

The general reduction significantly lowers the employer cost of apprenticeships, particularly for apprentices whose remuneration is close to the SMIC. The calculation of the reduction coefficient takes into account the actual remuneration of the apprentice (and not a reconstructed remuneration), which leads 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 significant reductions in employer contributions. For companies with 50 employees and more, the maximum coefficient is 0.3234 (including the FNAL contribution at the higher rate).

6. Hiring Assistance for Apprentices in 2025

6.1 Maintenance of the €6,000 Assistance

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

6.2 Eligibility Conditions

To benefit from the assistance, 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 assistance by the ASP (Agency for Services and Payment).

The assistance is cumulative with the exemptions from social contributions applicable to apprentices. It helps cover a significant part of the salary cost of the apprentice in the first year, making apprenticeship financially very attractive despite the threshold exemption reform.

7. Specific Cases for 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 regime. This regime, provided for by Article L. 6227-8-1 of the Labour Code, stipulates a total exemption from employer contributions (excluding additional retirement contributions for the public service) and remains unchanged according to the LFSS 2025.

7.2 Articulation with the New Threshold

The lowering of the 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. DSN Impacts

8.1 Declaration of Employee Contributions

Implementing the new threshold requires adjustments to DSN settings. Payroll software developers must update calculation rules to distinguish the exempt portion (up to 50% of the SMIC) from the liable portion (beyond 50% of the SMIC). The specific personnel type codes (CTP) for apprentices must be correctly completed to avoid any reporting anomalies.

8.2 Points of Vigilance

Payroll managers must be particularly vigilant on the following points:

• The prorating of the threshold in the case of an incomplete month (hiring or departure during the month);
• The prorating of the threshold in the case of part-time work;
• The management of the transitional period (before and after March 1, 2025, within the same month of March);
• The correct imputation of CTP on the contribution blocks in the DSN;
• The verification of the applied CSG/CRDS rates (9.20% + 0.50% on the base after the deduction).

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

9.1 A Net Cost Increase for the Apprentice

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

9.2 A Political Signal to Watch

This measure is part of a revenue-seeking strategy for financing social security. It reflects a desire to rationalize social exemptions by targeting them more at the most vulnerable populations. Employer organizations and professional branches have expressed concerns about the potential impact on the use of apprenticeships, particularly for adult audiences in professional retraining.

9.3 Continued €6,000 Assistance as a Counterweight

The maintenance of the €6,000 hiring assistance in 2025 constitutes an important compensatory factor for employers. This assistance, combined with the general reduction in employer contributions, helps maintain a generally attractive net employment cost for apprentices, despite the increase in gross costs due to the new employee contribution regime.

FAQ – Frequently Asked Questions about the New Apprenticeship Exemption Threshold

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

The new 50% of the SMIC threshold applies to all ongoing apprenticeship contracts from March 1, 2025, and not only to contracts concluded after this date. It is a modification of the applicable social regime by law, without any condition related to the date of conclusion of the contract. Payroll managers must therefore update the processing of all apprentices’ pay slips starting with the March 2025 payroll.

How to manage payroll for March 2025, straddling the old and new regime?

For March 2025, two methods are feasible: either a prorated approach (application of the old threshold 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 and ministerial instructions recommend applying the new threshold for the entire month of March 2025 for simplification reasons. It is advisable to refer to the guidelines provided by the payroll software publisher.

Is the specific exemption from employer contributions for apprentices modified?

No, the reform exclusively concerns the threshold for the exemption from employee contributions. The regime of employer contributions is unchanged: the general reduction of employer contributions (Fillon reduction) continues to apply under the same terms as before. Employers continue to benefit from a significant reduction in employer charges for apprentices’ remuneration.

What impact on the mandatory health insurance for apprentices?

The employee’s contribution to mandatory health insurance is not modified by the reform of the exemption threshold. The employee health insurance contribution remains due under the same conditions as before. However, apprentices whose employee health insurance contribution exceeds 10% of their gross remuneration may request an exemption from affiliation. This ability remains unchanged and may be particularly relevant for younger apprentices whose remuneration is lower.

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

No, the €6,000 hiring assistance for apprentices is completely independent of the regime of employee contributions. It is maintained in 2025 for all apprenticeship contracts, with no conditions regarding the size of the company or the level of the diploma. The payment of the assistance continues to be made monthly by the ASP, based on the data transmitted in the DSN by the employer.