French General Employer Contribution Reduction (RGDU): 2026 Rules, URSSAF and Agirc-Arrco Allocation

What is the general reduction of employer contributions and what is its legal framework in 2026?

The réduction générale dégressive unique (RGDU) (single degressive general reduction) is a general-law mechanism codified in Articles L.241-13 and D.241-7 of the French Social Security Code. Since 1 January 2026, it has absorbed the three general relief schemes that previously coexisted: the so-called “Fillon” general reduction, the reduced health insurance contribution rate and the reduced family allowance rate (Article 18 of Law No. 2025-199 of 28 February 2025). It applies to annual remuneration not exceeding 3 times the SMIC (the French statutory minimum wage) — and no longer 1.6 times the SMIC. Decree No. 2025-1446 of 31 December 2025 sets its parameters, notably raising the uncapped old-age (retirement) contribution rate to 2.11%.

The RGDU is a major tool of French employment policy: it represents several tens of billions of euros in annual relief for French companies. Technical mastery of the mechanism is essential for any payroll manager. For an overall approach to payroll mechanisms, see our complete payroll guide.

Which employer contributions fall within scope “T” of the general reduction?

Scope T refers to all employer contributions and levies taken into account for calculating the reduction coefficient. In 2026, this scope includes:

Sickness-maternity-invalidity-death (MMID): 13.00%, a single rate since the reduced rate was abolished on 1 January 2026;
Capped old-age insurance: 8.55%;
Uncapped old-age insurance: 2.11% since 1 January 2026, in accordance with Decree No. 2025-1446 of 31 December 2025;
Family allowances: 5.25%, a single rate since the reduced rate was abolished on 1 January 2026;
Workplace accidents / occupational diseases (AT/MP): a flat rate of 0.49 points, and not the company’s actual rate. This point is fundamental and a frequent source of errors;
FNAL (national housing assistance fund): 0.10% (companies with fewer than 50 employees) or 0.50% (companies with 50 or more employees);
Unemployment insurance: the general-law rate without bonus-malus, i.e. 4.00%;
Autonomy solidarity contribution (CSA): 0.30%;
Legally mandatory supplementary pension: 6.01%.

Why is the AT/MP rate used a flat rate of 0.49 points rather than the actual rate?

The legislature chose a flat rate for calculating the general reduction in order to prevent companies with high claims experience (and therefore a high AT/MP rate) from benefiting from a disproportionate reduction. The flat rate of 0.49 points is set by regulation and does not vary according to the sector of activity or the company’s individual rate. This rule is expressly provided for by Article D.241-7 of the French Social Security Code. To explore the AT/MP topic further, see our AT/MP guide.

How is the unemployment insurance bonus-malus neutralised in the calculation of the general reduction?

Since the introduction of the bonus-malus mechanism on the employer’s unemployment insurance contribution (affected sectors: hospitality and catering, food processing, transport, etc.), the question of its interaction with the general reduction has arisen. The answer is clear: the bonus-malus is neutralised for the purpose of calculating coefficient T. In other words, it is the general-law unemployment insurance rate (4.00%) that is used within scope T, and not the modulated rate (which may vary from 3.00% to 5.05% depending on the company’s separation performance).

This neutralisation ensures equal treatment among companies for the calculation of the general reduction, regardless of their separation rate. The surplus (or reduction) in unemployment contribution linked to the bonus-malus is added to (or subtracted from) the effective unemployment contribution, but without affecting the calculation of the general reduction.

Which contributions are excluded from the scope of the general reduction?

Several employer contributions and levies are expressly excluded from scope T:

CSG and CRDS (general social contribution and social debt repayment contribution): these levies are not employer contributions in the strict sense and are therefore excluded from the calculation;
Vocational training contribution: this contribution (0.55% or 1% depending on headcount) does not fall within the scope of the reduction;
Apprenticeship tax: excluded from scope T;
Mobility levy (formerly transport levy): excluded, even though it represents a significant charge for companies located within the perimeter of a mobility organising authority;
Social dialogue contribution: excluded.

This exclusion means that these employer charges remain fully payable, with no possibility of reducing them through the general reduction. The employer must be careful not to include them in the calculation of coefficient C, failing which the amount of the reduction would be unduly increased.

How to calculate coefficient C of the general reduction step by step?

The calculation of coefficient C follows a precise regulatory formula, set out in Article D.241-7 of the French Social Security Code. Here is the four-step methodology:

Step 1: Determine the value of T

T corresponds to the sum of the eligible employer contribution rates. In 2026, for a company with 50 or more employees and an FNAL of 0.50%:

Sum = 13.00% (MMID) + 8.55% (capped old-age) + 2.11% (uncapped old-age) + 5.25% (family allowances) + 0.49% (AT/MP pooled share) + 0.30% (CSA) + 6.01% (supplementary pension) + 4.00% (unemployment) + FNAL

The total amounts to 40.21% for an FNAL of 0.50%, and to 39.81% for an FNAL of 0.10%. This total corresponds to the maximum coefficient, reached at the level of the SMIC: in the terminology of the 2026 formula, this is the sum Tmin + Tdelta (Tmin being 0.0200 in all cases).

Step 2: Calculate coefficient C

The coefficient formula is:

C = Tmin + Tdelta × [ ½ × (3 × annual SMIC ÷ annual gross remuneration − 1) ]^1.75

Coefficient C must be calculated to four decimal places, applying the rule of rounding to the nearest ten-thousandth. Coefficient C can under no circumstances exceed the maximum value Cmax = Tmin + Tdelta (0.3981 or 0.4021). If the calculation gives a higher coefficient, this cap is applied. Symmetrically, as long as the remuneration remains below 3 times the SMIC, the coefficient cannot fall below the floor Tmin of 0.0200.

Step 3: Calculate the reduction amount R

The reduction amount is:

R = C × annual gross remuneration

The amount R is rounded to the nearest euro cent. In practice, the calculation is carried out month by month with progressive or annual regularisation (the progressive regularisation method recommended by URSSAF).

Step 4: Allocate the reduction between URSSAF and Agirc-Arrco

The single amount R must be allocated between URSSAF and Agirc-Arrco according to an allocation key set by regulation. This allocation is detailed in the following section.

How to allocate the reduction R between URSSAF and Agirc-Arrco according to the 2026 allocation key?

The reduction R calculated above is a single amount that must be applied against two sets of contributions: those paid to URSSAF and those paid to Agirc-Arrco. The allocation key depends on the FNAL rate applicable to the company:

Companies with an FNAL of 0.10% (fewer than 50 employees)

URSSAF share = R × (33.80 ÷ 39.81) ≈ R × 84.90%

Agirc-Arrco share = R − URSSAF share ≈ R × 15.10%

Companies with an FNAL of 0.50% (50 or more employees)

URSSAF share = R × (34.20 ÷ 40.21) ≈ R × 85.05%

Agirc-Arrco share = R − URSSAF share ≈ R × 14.95%

Rounding is done to the nearest cent. The difference between the two formulas is minimal, but it must be respected, failing which it may be rejected by the collecting bodies.

What are the rules on non-combination and combination of the general reduction with other schemes?

The principle of non-combination on the same risk prohibits combining the general reduction with another relief scheme applying to a contribution already included in scope T. Where such combination is possible, the employer must opt for the more favourable scheme. For example, an employer cannot combine the general reduction with a ZFU-TE (urban tax-free zone) exemption applying to the same contributions: they must choose one or the other.

Conversely, combinations are permitted with measures applying to contributions or levies located outside scope T. Thus, the general reduction may be combined with:

The flat-rate employer deduction on overtime hours (companies with fewer than 20 employees, then those with 20 to 249 employees);
Exemptions from vocational training contributions;
Specific overseas exemptions (LODEOM), under the conditions provided for by the applicable texts.

How to declare the general reduction in the DSN?

The declaration of the general reduction in the DSN (the French nominative social declaration) is subject to specific codes:

CTP 668: general reduction — URSSAF share (negative amount as a deduction);
CTP 669: regularisation of the general reduction — URSSAF share;
CTP 671: general reduction — Agirc-Arrco share;
CTP 801: regularisation of the general reduction — Agirc-Arrco share.

The attachment is made to the month worked (and not the month of payment). In the case of progressive regularisation, adjustments are declared month by month with the corresponding regularisation CTPs. The employer must ensure that the amounts declared correspond exactly to the calculations carried out, with the regulatory rounding.

What is the complete operational order for calculating the general reduction?

To avoid any error, here is the order that must be followed:

(i) Calculation of coefficient C: to 4 decimal places, verifying that C ≤ Cmax (= T);
(ii) Calculation of amount R: C × gross remuneration, rounded to the nearest euro cent;
(iii) Allocation according to the key: distribution between the URSSAF share and the Agirc-Arrco share according to the applicable ratios;
(iv) Rounding: each share is rounded to the nearest cent. The sum of the two shares must equal the amount R (with adjustment of the residual share if necessary to avoid rounding differences).

This order is mandatory. Any reversal (for example, allocating before rounding R) may create significant cumulative discrepancies over a full financial year, liable to trigger DSN anomalies.

What are the frequent errors in applying the general reduction?

URSSAF audits regularly reveal the following errors:

1. Using the actual AT/MP rate instead of the 0.49-point flat rate. This is the most costly error: it artificially increases or decreases coefficient T and therefore the amount of the reduction. An URSSAF reassessment may result in either direction.

2. Taking into account the unemployment bonus-malus rate instead of the general-law rate. The bonus-malus must be neutralised within scope T. Only the general-law rate of 4.00% is used.

3. Decimal-place error in the calculation of coefficient C. The coefficient must have exactly 4 decimal places. Rounding to 2 decimal places significantly distorts the calculation for remuneration close to the SMIC.

4. Failure to update the parameters as of 1 January 2026. Raising the uncapped old-age rate to 2.11% changes the value of T. Payroll software must be updated accordingly.

5. Prohibited combination with an exemption applying to the same risk. The employer must systematically verify the absence of a double benefit on the same risk covered by scope T.

FAQ — Frequently asked questions on the general reduction of contributions

Does the general reduction apply to apprentices?

No. Since 1 January 2019, apprenticeship contracts have benefited from a specific exemption (Article L.6243-2 of the French Labour Code) which replaces the general reduction. Apprentices are therefore not eligible for the RGDU, but benefit from a specific scheme that is at least as favourable.

How to handle part-time employees in the reduction calculation?

For part-time employees, the SMIC used in the coefficient C formula is prorated according to the contractual working time relative to the statutory working time. For example, an employee working 80% will have the reference annual SMIC multiplied by 0.80. This proration is automatic in most payroll software.

What happens if the calculated coefficient C is negative?

The question arises differently since 2026: the coefficient does not become negative, it stops at the Tmin floor of 0.0200 as long as annual remuneration remains below 3 times the SMIC. However, as soon as the remuneration reaches 3 times the SMIC, the employer is no longer eligible and the reduction drops to zero for the financial year. Under progressive regularisation, one month may therefore give rise to the reduction and another may not, the regularisation being carried out by offsetting on an annual basis.

Can the general reduction be combined with the CICE?

The CICE (competitiveness and employment tax credit) was abolished on 1 January 2019 and converted into a permanent reduction in employer contributions, in the form of a reduced health insurance contribution rate. This reduced rate was itself abolished on 1 January 2026 and absorbed by the RGDU. The question of combination therefore no longer arises.

How to regularise at year-end if the progressive method was not applied?

If the employer applied the monthly calculation method without progressive regularisation, an annual regularisation must be carried out in December (or on the last payslip of the financial year). The annual reduction amount is recalculated on the basis of total annual remuneration, and the difference from the sum of the monthly reductions is applied (as an increase or decrease) on the last payslip. This regularisation is declared in the DSN with CTPs 669 and 801.

For any question on applying the general reduction in your company, contact our firm. We can audit your payslips and secure your calculations ahead of a possible URSSAF audit.