French General Payroll Tax Relief (RGDU): How to Apply It and Allocate Between URSSAF and Agirc-Arrco in 2026

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

The réduction générale dégressive unique (RGDU) — the single degressive general reduction of employer contributions — 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 reliefs that previously coexisted: the general reduction known as the “Fillon” reduction, the reduced sickness 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) — no longer 1.6 SMIC. Decree No. 2025-1446 of 31 December 2025 sets its parameters, including in particular the increase of the uncapped old-age contribution rate to 2.11%.

The RGDU is a major instrument of employment policy: it represents several tens of billions of euros in annual relief for French companies. A solid technical command of it is essential for any payroll manager. For an overall overview of payroll mechanisms, see our complete payroll guide.

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

The T scope designates all employer contributions and levies taken into account when calculating the reduction coefficient. In 2026, this scope comprises:

Sickness-maternity-invalidity-death (MMID): 13.00%, a single rate since the reduced rate was abolished on 1 January 2026;
Capped old-age: 8.55%;
Uncapped old-age: 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;
Work accidents / occupational diseases (AT/MP): a flat rate of 0.49 point, not the company’s actual rate. This point is fundamental and a frequent source of error;
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%;
Solidarity contribution for autonomy (CSA): 0.30%;
Legally mandatory supplementary pension: 6.01%.

Why is the AT/MP rate applied a flat 0.49 point rather than the actual rate?

The legislator chose a flat rate for calculating the general reduction in order to prevent companies with high accident rates (and therefore high AT/MP rates) from benefiting from a disproportionate reduction. The 0.49-point flat rate 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 in Article D.241-7 of the French Social Security Code. For a deeper look at AT/MP matters, see our AT/MP guide.

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

Since the introduction of the bonus-malus mechanism on the employer’s unemployment insurance contribution (sectors concerned: hospitality/catering, food industry, transport, etc.), the question of its interaction with the general reduction has arisen. The answer is clear: the bonus-malus is neutralised for the purposes of calculating the T coefficient. In other words, it is the general-law unemployment insurance rate (4.00%) that is used within the T scope, 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 between companies for the calculation of the general reduction, regardless of their separation rate. The additional (or reduced) 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 the T scope:

CSG and CRDS: 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 the T scope;
Mobility levy (versement mobilité, formerly transport levy): excluded, even though it represents a significant charge for companies located within the area 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 via the general reduction. The employer must take care not to include them in the calculation of the C coefficient, failing which the reduction amount would be unduly inflated.

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

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

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 a FNAL rate 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 mutualised portion) + 0.30% (CSA) + 6.01% (supplementary pension) + 4.00% (unemployment) + FNAL

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

Step 2: Calculate the C coefficient

The coefficient formula is:

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

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

Step 3: Calculate the amount R of the reduction

The amount of the reduction is:

R = C × gross annual remuneration

The amount R is rounded to the nearest euro cent. In practice, the calculation is carried out month by month with a progressive or annual adjustment (the progressive adjustment 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 a distribution key set by regulation. This allocation is detailed in the following section.

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

The reduction R calculated above is a single amount that must be charged against two sets of contributions: those paid to URSSAF and those paid to Agirc-Arrco (the mandatory supplementary pension body). The distribution key depends on the FNAL rate applicable to the company:

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

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

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

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

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

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

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

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 bearing on a contribution already included in the T scope. Where such a 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 exemption (urban tax-free zone) bearing on the same contributions: one or the other must be chosen.

On the other hand, combinations are permitted with measures bearing on contributions or levies located outside the T scope. Thus, the general reduction may be combined with:

The flat-rate employer deduction on overtime (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 mandatory monthly social declaration) follows specific codes:

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

Attachment is made to the month worked (and not the month of payment). In the case of progressive adjustment, the corrections are declared month by month with the corresponding adjustment CTPs. The employer must ensure that the amounts declared correspond exactly to the calculations performed, 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 strictly followed:

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

This order is mandatory. Any reversal (for example, allocating before rounding R) can create significant cumulative discrepancies over a full financial year, potentially triggering DSN anomalies.

What are the common errors in applying the general reduction?

URSSAF audits regularly reveal the following errors:

1. Use of the actual AT/MP rate instead of the 0.49-point flat rate. This is the most costly error: it artificially inflates or reduces the T coefficient and therefore the amount of the reduction. A URSSAF reassessment can result in either direction.

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

3. Decimal error in calculating the C coefficient. 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 at 1 January 2026. The increase in 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 bearing on the same risk. The employer must systematically check for the absence of a double benefit on the same risk covered by the T scope.

FAQ — Frequently asked questions about the general reduction of contributions

Does the general reduction apply to apprentices?

No. Since 1 January 2019, apprenticeship contracts benefit from a specific exemption (Article L.6243-2 of the French Labour Code) that replaces the general reduction. Apprentices are therefore not eligible for the RGDU, but benefit from their own regime 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 C coefficient formula is prorated according to the contractual working time relative to the statutory working time. For example, an employee working 80% will see the reference annual SMIC multiplied by 0.80. This proration is automatic in most payroll software.

What happens if the calculated C coefficient is negative?

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

Is the general reduction combinable with the CICE?

The CICE (tax credit for competitiveness and employment) was abolished on 1 January 2019 and converted into a permanent reduction of employer contributions in the form of a reduced sickness 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 make an adjustment at year-end if the progressive method was not applied?

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

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