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

The Bulletin officiel de la Sécurité sociale (BOSS – the official social security bulletin consolidating administrative guidance) sets out the social security treatment of the severance payments you make: exemption from social contributions within certain limits, liability to CSG/CRDS (social welfare levies), and reintegration into the contribution base above thresholds indexed to the Plafond annuel de la Sécurité sociale (PASS – annual social security ceiling). In practice, statutory severance pay is exempt from social contributions up to 2 PASS (i.e. €94,200 for 2025), subject to conditions, but becomes fully liable to contributions if its amount exceeds 10 PASS.

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

What the BOSS Governs for Severance Payments

In its section dedicated to severance payments, the BOSS consolidates 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 any remuneration paid in consideration of, or in connection with, work is subject to contributions, together with the applicable exceptions.

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

Characterise the payment: statutory or contractual severance pay, rupture conventionnelle (mutually agreed termination) indemnity, settlement payment, mandatory retirement indemnity, indemnity for dismissal without real and serious cause, etc. Each type is governed by its own regime.
Verify whether the payment is compensatory or salary in nature: sums that constitute salary (indemnity in lieu of notice, indemnity in lieu of 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 (employer social package levy).

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

The Contribution Exemption Thresholds You Must Comply With

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

Severance Pay (excluding collective redundancy plans / PSE)

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

the amount of the statutory or contractual severance pay;
50% of the total indemnity paid;
twice the gross annual remuneration received during 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 “cliff-edge threshold” mechanism is a frequent source of reassessment.

Rupture Conventionnelle Indemnity

For an employee who is not entitled to a pension under a legally mandatory scheme, the approved rupture conventionnelle indemnity follows the same exemption regime as statutory severance pay (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 contributions, which replaces the former 20% forfait social.

Mandatory Retirement Indemnity

It is exempt within the 2 PASS limit under the same terms, 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 Payment

The BOSS holds that the compensatory portion of a settlement — the part that repairs a loss rather than a salary component — follows the regime of the severance payment to which it relates. You must therefore be able to demonstrate, with supporting documents, 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 assessment base: severance payments are subject to CSG (9.20%) and CRDS (0.50%) on the portion exceeding the amount of the statutory or contractual severance pay. In other words, the contractual amount is exempt from CSG/CRDS, but any portion above it is subject to them. 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 one exempt from contributions. The BOSS requires you to apply the limit that is most favourable to collection.

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

The URSSAF Audit Checkpoints to Secure Within Your Company

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

The exact characterisation of each sum: rigorously distinguish salary-type items (notice, paid leave, bonuses) from compensatory indemnities. Any confusion leads to a contribution reassessment together with surcharges.
The calculation of the three exemption branches: keep the detailed calculation (contractual severance pay, 50% of the indemnity, twice the remuneration) to justify the exempt portion applied.
Compliance with the 10 PASS threshold: above this, 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 of the two limits.

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 exactly does the BOSS say about the rupture conventionnelle indemnity?

The BOSS confirms that the rupture conventionnelle indemnity paid to an employee who cannot draw a retirement pension is exempt from contributions within the limit of 2 PASS, under the same rules as statutory severance pay. The exempt portion, however, bears the 30% employer contribution. If the employee is entitled to a retirement pension, the indemnity is fully subject to contributions.

Is the 2 PASS ceiling assessed per payment or globally?

For social contributions, the 2 PASS limit is assessed on the total 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 linked to the same end of contract.

Is the indemnity in lieu of notice exempt?

No. The indemnity in lieu of notice, like the indemnity in lieu of paid leave, is salary in nature. It is fully subject to contributions, CSG and CRDS, without benefiting from any exemption threshold. It must never be included in the calculation of the exempt portion.

How should a settlement payment be treated in payroll?

Only the portion repairing a loss follows the social regime of severance payments. The portion corresponding to salary components 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 rests on the employer.

What happens if the indemnity exceeds 10 PASS?

Once 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 full amount, from the first euro. This mechanism mainly concerns indemnities paid to executives and highly remunerated managers.

The social security regime for severance payments combines several thresholds indexed to the PASS, distinct rules according to the nature of each sum, and BOSS doctrine that is binding but evolving. A single characterisation or calculation error is enough to trigger an 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 an URSSAF audit. Contact us to make the social treatment of your next terminations reliable.