French Payroll: How to Apply the Single Sliding-Scale General Reduction (RGDU) and Its URSSAF / Agirc-Arrco Allocation

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

The single sliding-scale general reduction (réduction générale dégressive unique, RGDU) 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-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 (French minimum wage) — no longer 1.6 SMIC. Decree No. 2025-1446 of 31 December 2025 sets its parameters, including the increase of the uncapped old-age insurance contribution rate to 2.11%.

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

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

The “T” scope refers to all employer contributions and charges taken into account when calculating the reduction coefficient. In 2026, this scope includes:

Sickness-maternity-invalidity-death (MMID): 13.00%, a single rate since the abolition of the reduced rate 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 abolition of the reduced rate on 1 January 2026;
Work accidents / occupational diseases (AT/MP): a flat rate of 0.49 point, 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: standard 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 used a flat rate of 0.49 point and not the actual rate?

The legislature opted for 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 by Article D.241-7 of the French Social Security Code. For further detail on 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 scheme on the employer’s unemployment-insurance contribution (affected sectors: hospitality-catering, agri-food, transport, etc.), the question of its interaction with the general reduction has arisen. The answer is clear: the bonus-malus is neutralised for the calculation of the T coefficient. In other words, it is the standard unemployment-insurance rate (4.00%) that is used within the T scope, and not the adjusted rate (which may vary from 3.00% to 5.05% depending on the company’s performance in terms of employment separations).

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

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

Several employer contributions and charges are expressly excluded from the T scope:

CSG and CRDS: these charges 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 the transport levy): excluded, although 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 ensure they are not included in the calculation of the C coefficient, failing which the amount of the reduction will be unduly increased.

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 an 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 pooled share) + 0.30% (CSA) + 6.01% (supplementary pension) + 4.00% (unemployment) + FNAL

The total amounts to 40.21% for an FNAL rate of 0.50%, and to 39.81% for an FNAL rate of 0.10%. This total corresponds to the maximum coefficient, reached at the SMIC level: in the terminology of the 2026 formula, it 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 ÷ annual gross 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 under no circumstances exceed the maximum value Cmax = Tmin + Tdelta (0.3981 or 0.4021). If the calculation yields a higher coefficient, this cap is applied. Symmetrically, as long as remuneration remains below 3 SMIC, the coefficient cannot fall below the floor of Tmin = 0.0200.

Step 3: Calculate the amount R of the reduction

The amount of the reduction is:

R = C × annual gross remuneration

The amount R is rounded to the nearest euro cent. In practice, the calculation is performed 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 under the 2026 allocation key?

The reduction R calculated above is a single amount that must be allocated 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 rate 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 rate 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 performed to the nearest cent. The difference between the two formulas is minimal, but it must be observed, failing which the filing may be rejected by the collection bodies.

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

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

By contrast, combinations are permitted with measures applying to contributions or charges falling 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 (Déclaration Sociale Nominative, the standardised social security declaration) uses 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 of work (and not the month of payment). In the case of progressive regularisation, adjustments are declared month by month using the corresponding regularisation 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) Calculate the C coefficient: to 4 decimal places, verifying that C ≤ Cmax (= T);
(ii) Calculate the amount R: C × gross remuneration, rounded to the nearest euro cent;
(iii) Allocate under the key: split 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 (adjusting the residual share if necessary to avoid rounding discrepancies).

This order is mandatory. Any inversion (for example, allocating before rounding R) can create significant cumulative discrepancies over a full financial year, liable to trigger 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 increases or decreases the T coefficient and therefore the amount of the reduction. A URSSAF reassessment may result in either direction.

2. Use of the unemployment bonus-malus rate instead of the standard rate. The bonus-malus must be neutralised within the T scope. Only the standard rate of 4.00% is applied.

3. Decimal-place error in the calculation of 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 of 1 January 2026. The increase of the uncapped old-age insurance 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 a single risk covered by the T scope.

FAQ — Frequently asked questions about the general reduction in 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) that replaces the general reduction. Apprentices are therefore not eligible for the RGDU but benefit from a specific regime that is at least as favourable.

How should part-time employees be treated 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 at 80% will have 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 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 SMIC. On the other hand, 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 regularisation, one month may therefore give entitlement to the reduction while another does not, with regularisation carried out by offsetting on an annual basis.

Can the general reduction be combined with the CICE?

The CICE was abolished on 1 January 2019 and converted into a permanent reduction in employer contributions, in the form of a reduced sickness-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 has not been applied?

If the employer has applied the monthly calculation method without progressive regularisation, an annual regularisation must be carried out in December (or on the last pay slip of the financial year). The annual amount of the reduction 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) to the final pay slip. This regularisation is declared in the DSN using CTPs 669 and 801.

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