BOSS and Severance Pay in France: The Social Security Regime Employers Must Apply

The French Social Security Official Bulletin (Bulletin officiel de la Sécurité sociale, or “BOSS”) sets out the social security regime applicable to the severance payments you make: exemption from social security contributions within certain limits, liability to CSG/CRDS (the French social contributions levied on income), and reintegration into the contribution base beyond thresholds indexed on the Annual Social Security Ceiling (Plafond annuel de la Sécurité sociale, or “PASS”). In practice, statutory dismissal indemnities are exempt from social security contributions up to 2 PASS (i.e. €94,200 for 2025), subject to conditions, but become fully liable to contributions where the amount exceeds 10 PASS.

This article is intended for HR directors and executives managing payroll for terminations. The BOSS has been binding on the administration since 1 April 2021: you may rely on it, but the URSSAF (the French social security collection agency) also relies on it during an audit. Mastering these rules is essential to protecting your employer account.

What the BOSS Governs for Severance Payments

The BOSS consolidates, in its dedicated section on severance payments, the administrative doctrine applicable to the social treatment of sums paid on termination of the employment contract. It is built around the French Social Security Code, in particular Article L.242-1, which establishes the principle that all remuneration paid in consideration of, or on the occasion of, work is subject to contributions, together with the exceptions to that principle.

The analysis to be carried out for each indemnity involves three steps:

Characterise the indemnity: statutory or contractual dismissal indemnity, indemnity for a rupture conventionnelle (a mutually agreed termination of the employment contract), settlement indemnity, compulsory retirement indemnity, indemnity for dismissal without real and serious cause, etc. Each type follows its own regime.
Verify the indemnity or salary nature: sums having the nature of salary (compensatory indemnity in lieu of notice, compensatory indemnity for paid leave, salary arrears) are always subject to contributions, with no exemption limit.
Apply the exemption thresholds for contributions, CSG/CRDS and, where applicable, the forfait social (a specific employer social levy).

The BOSS specifies that these rules are assessed indemnity by indemnity for CSG/CRDS, but that the 2 PASS ceiling for contributions is assessed on the overall amount of severance payments made to the same employee for the same termination.

The Contribution Exemption Thresholds You Must Respect

The social treatment depends on the nature of the indemnity. Below are the operational rules to build into your payroll configuration.

Dismissal Indemnity (excluding a Collective Redundancy Plan)

The portion exempt from social security contributions corresponds to the highest of the following amounts, up to a limit of 2 PASS:

the amount of the statutory or contractual dismissal indemnity;
50% of the total indemnity paid;
twice the gross annual remuneration received in the calendar year preceding the termination.

Caution: if the total indemnity exceeds 10 PASS (€471,000 in 2025), it is fully subject to contributions, from the first euro. This “cut-off threshold” mechanism is a frequent source of reassessment.

Indemnity for a Rupture Conventionnelle

For an employee who cannot claim a pension under a legally compulsory scheme, the indemnity for an approved rupture conventionnelle follows the same exemption regime as the dismissal indemnity (2 PASS limit, 10 PASS threshold). Since the Social Security Financing Act for 2023, the employer is liable for a single 30% contribution on the portion exempt from social security contributions, which replaces the former 20% forfait social.

Compulsory Retirement Indemnity

It is exempt up to 2 PASS under the same conditions, but remains subject to a specific 50% employer contribution on its entire amount, provided for by Article L.137-12 of the French Social Security Code.

Settlement Indemnity

The BOSS holds that the indemnity portion of a settlement — the portion compensating for a loss rather than an element of salary — follows the regime of the severance indemnity to which it relates. You must therefore be able to demonstrate, with supporting evidence, the compensatory nature of the sums paid. Failing this, the URSSAF will reclassify them as salary.

Even when exempt from contributions, a severance payment does not necessarily escape CSG and CRDS. This regime, which is more restrictive, follows its own rules.

CSG/CRDS taxable base: severance payments are subject to CSG (9.20%) and CRDS (0.50%) on the portion exceeding the amount of the statutory or contractual dismissal indemnity. In other words, the contractual amount is exempt from CSG/CRDS, but the portion above it is subject to it. This portion subject to CSG/CRDS does not benefit from the professional expenses allowance.

A key point of vigilance for your payroll: the indemnity can never be exempt from CSG/CRDS for an amount higher than the amount exempt from contributions. The BOSS requires that the limit most favourable to collection be applied.

Forfait social and the 30% contribution: for ruptures conventionnelles, the 30% employer contribution applies to the portion exempt from contributions. You must declare it on the DSN (the French unified social security declaration) under the correct staff category code to avoid any reassessment.

URSSAF Audit Points to Secure Within Your Company

Severance payments are among the most frequently audited items. To secure your employer account, DAIRIA Avocats recommends systematically checking:

The exact characterisation of each sum: rigorously distinguish elements of a salary nature (notice, paid leave, bonuses) from compensatory indemnities. Any confusion results in a contribution reassessment together with surcharges.
The calculation of the three exemption limbs: keep the detailed calculation (contractual indemnity, 50% of the indemnity, twice the remuneration) to justify the exempt portion applied.
Compliance with the 10 PASS threshold: above it, no exemption is possible. This point is decisive for senior executives.
The treatment of settlements: document the compensatory nature of the sums in the settlement agreement. A poorly drafted agreement weakens the exemption.
Consistency between CSG/CRDS and contributions: always apply the lower limit of the two regimes.

A poorly configured termination exposes your company to a reassessment covering three years, including surcharges and penalties. The firm intervenes upstream to audit your calculations and secure the configuration of your payroll software.

Frequently Asked Questions

What does the BOSS say exactly about the indemnity for a rupture conventionnelle?

The BOSS confirms that the indemnity for a rupture conventionnelle paid to an employee who cannot draw a pension is exempt from contributions up to 2 PASS, under the same rules as the dismissal indemnity. The exempt portion, however, bears the 30% employer contribution. If the employee can claim a pension, the indemnity is fully subject to contributions.

Is the 2 PASS ceiling assessed per indemnity or globally?

For social security contributions, the 2 PASS limit is assessed on the overall amount of all severance payments made to the same employee in respect of the same termination. You cannot therefore combine several 2 PASS ceilings for separate indemnities relating to the same end of contract.

Is the compensatory indemnity in lieu of notice exempt?

No. The compensatory indemnity in lieu of notice, like the compensatory indemnity for paid leave, has the nature of salary. It is fully subject to contributions, CSG and CRDS, with no exemption threshold. It must never be included in the calculation of the exempt portion.

How should a settlement indemnity be treated in payroll?

Only the portion compensating for a loss follows the social security regime of severance payments. The portion corresponding to elements of salary is subject to contributions. You must document the breakdown in the settlement agreement. In the event of an audit, the burden of proving the compensatory nature falls on the employer.

What happens if the indemnity exceeds 10 PASS?

As soon as the total amount of severance payments exceeds 10 times the PASS (€471,000 in 2025), the exemption disappears entirely: the indemnity is subject to contributions, CSG and CRDS on its entire amount, from the first euro. This mechanism mainly concerns indemnities of executives and highly remunerated senior staff.

The social security regime for severance payments combines several thresholds indexed on the PASS, distinct rules according to the nature of each sum, and a BOSS doctrine that is binding yet evolving. A single error in characterisation or calculation is enough to trigger a URSSAF reassessment over three years.

DAIRIA Avocats assists HR directors and executives of mid-sized companies in auditing and securing their terminations: verification of the calculation of exempt portions, drafting of enforceable settlement agreements, payroll configuration and assistance in the event of a URSSAF audit. Contact us to make the social treatment of your next terminations reliable.