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

The French Social Security Official Bulletin (Bulletin officiel de la Sécurité sociale, or “BOSS”) sets out the social security treatment of the severance payments you make: exemption from contributions within certain limits, liability to the CSG and CRDS social levies, and reintegration into the contribution base above thresholds indexed to the Annual Social Security Ceiling (Plafond annuel de la Sécurité sociale, or “PASS”). In practice, the statutory dismissal indemnity is exempt from social security 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 severance payroll. The BOSS has been binding on the administration since 1 April 2021: you can rely on it, but the URSSAF (French social security collection agency) also uses it during an audit. Mastering these rules is essential to the security of your employer account.

What the BOSS Governs for Severance Payments

In its dedicated section on severance payments, the BOSS consolidates the administrative doctrine applicable to the social security 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 for, or on the occasion of, work is liable 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, mutually agreed termination indemnity (indemnité de rupture conventionnelle), settlement indemnity, retirement indemnity, indemnity for dismissal without real and serious cause, etc. Each type is subject to its own regime.
Determine whether the sum is indemnity-based or salary-based: sums that have the nature of salary (payment in lieu of notice, payment in lieu of paid leave, salary arrears) are always liable to contributions, with no exemption limit.
Apply the exemption thresholds for contributions, CSG/CRDS and, where applicable, the “forfait social” (a specific employer social charge).

The BOSS specifies that these rules are assessed indemnity by indemnity for CSG/CRDS purposes, 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 security treatment depends on the nature of the indemnity. Below are the operational rules to build into your payroll configuration.

Dismissal Indemnity (Outside a 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.

Note: if the total indemnity exceeds 10 PASS (€471,000 in 2025), it becomes fully liable to contributions, from the very first euro. This “cliff-edge threshold” mechanism is a frequent source of reassessment.

Mutually Agreed Termination Indemnity

For an employee not entitled to a pension under a legally mandatory scheme, the indemnity paid on an approved mutually agreed termination (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, replacing the former 20% forfait social.

Retirement Indemnity

This is exempt up to 2 PASS 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 Indemnity

The BOSS provides that the indemnity portion of a settlement — the part that compensates 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 the CSG and CRDS levies. This regime, which is more restrictive, follows its own rules.

Basis of liability to CSG/CRDS: severance payments are liable 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 liable. 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 greater than the amount exempt from contributions. The BOSS requires you to apply the limit that is most favourable to collection.

Forfait social and the 30% contribution: for mutually agreed terminations, the 30% employer contribution applies to the portion exempt from contributions. You must declare it on the DSN (nominative social declaration) under the correct staff category code to avoid any reassessment.

The URSSAF Audit Points to Secure Within Your Company

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

The precise characterisation of each sum: rigorously distinguish salary-based elements (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 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 undermines 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 exactly does the BOSS say about the mutually agreed termination indemnity?

The BOSS confirms that the mutually agreed termination indemnity 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 is, however, subject to the 30% employer contribution. If the employee is entitled to a pension, the indemnity is fully liable to contributions.

Is the 2 PASS ceiling assessed per indemnity or globally?

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

Is payment in lieu of notice exempt?

No. Payment in lieu of notice, like payment in lieu of paid leave, has the nature of salary. It is fully liable 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 a loss follows the social security regime of severance payments. The portion corresponding to salary elements is liable to contributions. You must document the breakdown in the settlement agreement. In the event of an audit, the burden of proving the compensatory nature lies with 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 liable to contributions, CSG and CRDS on its entire 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 depending on 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 three-year URSSAF reassessment.

DAIRIA Law assists HR directors and executives of mid-sized companies in auditing and securing their terminations: reviewing the calculation of exempt portions, drafting enforceable settlement agreements, configuring payroll and providing support during URSSAF audits. Contact us to make the social security treatment of your next terminations reliable.