How to Apply the General Employer Contribution Reduction (Formerly Fillon Reduction) and Its URSSAF/Agirc-Arrco Attributions?

What is the General Employer Contribution Reduction and What is Its Legal Framework in 2026?

The general employer contribution reduction, formerly known as the “Fillon reduction,” is a common law provision codified in Articles L.241-13 and D.241-7 of the French Social Security Code. This mechanism allows employers to benefit from a decreasing reduction of their employer contributions on earnings not exceeding 1.6 times the minimum wage (SMIC). As of the decree of December 31, 2025, the parameters for 2026 are in effect and significantly modify the calculation, particularly with the increase of the uncapped old-age contribution rate to 2.11% effective January 1, 2026.

The uniform decreasing general reduction (RGDU) is a major tool in employment policy: it represents several tens of billions of euros in annual relief for French companies. Mastering this mechanism is essential for any payroll manager. For a comprehensive approach to payroll mechanisms, please refer to our complete payroll guide.

Which Employer Contributions Are Eligible in the Scope T of the General Reduction?

The scope T refers to all employer contributions considered for the calculation of the reduction coefficient. In 2026, this scope includes:

Sickness-maternity-disability-death (MMID): common law rate of 13.00% (before a 6-point reduction for salaries below 2.5 SMIC);
Capped old-age contribution: 8.55%;
Uncapped old-age contribution: 2.11% from January 1, 2026 (up from 1.90% previously), in accordance with the decree of December 31, 2025;
Family allowances: common law rate of 5.25% (before a 1.80-point reduction for salaries below 3.5 SMIC);
Occupational accidents and diseases (AT/MP): lump sum of 0.49 points, rather than the company’s actual rate. This point is fundamental and a frequent source of errors;
FNAL: 0.10% (for companies with fewer than 50 employees) or 0.50% (for companies with 50 employees and more);
Unemployment insurance: common law rate of 4.05%.

Why is the AT/MP Rate Fixed at a Lump Sum of 0.49 Points and Not the Actual Rate?

The legislator chose a lump sum rate for the calculation of the general reduction to prevent companies with high accident rates (and thus high AT/MP rates) from benefiting disproportionately. The fixed rate of 0.49 points is set by regulation and does not vary according to industry sector or the company’s individual rate. This rule is expressly provided for in Article D.241-7 of the French Social Security Code. For an in-depth discussion on AT/MP, refer to our ATMP guide.

How is the Unemployment Insurance Bonus-Malus Neutralised in the Calculation of the General Reduction?

Since the implementation of the bonus-malus system on the employer’s unemployment insurance contribution (relevant sectors: accommodation-restoration, agri-food, transport, etc.), the relationship with the general reduction has been questioned. The answer is clear: the bonus-malus is neutralised for the calculation of coefficient T. In other words, the common law unemployment insurance rate (4.05%) is applied in the scope T, not the variable rate (which can range 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. Any surplus (or reduction) in unemployment contributions related to the bonus-malus is added (or deducted) to the effective unemployment contribution, but without affecting the calculation of the general reduction.

Which Contributions Are Excluded from the General Reduction Scope?

Several employer contributions are expressly excluded from scope T:

CSG and CRDS: these contributions are not strictly employer contributions and are thus excluded from the calculation;
Professional Training Contribution: this contribution (0.55% or 1% depending on the workforce) is not included in the reduction scope;
Apprenticeship Tax: excluded from scope T;
Mobility Contribution (formerly transport contribution): excluded, although it represents a significant burden for companies located within the jurisdiction of a mobility organizing authority;
Contribution to Social Dialogue: excluded.

This exclusion means that these employer charges remain fully payable, with no possibility of reduction via the general reduction. Employers must ensure that they do not include these in their calculation of coefficient C, to avoid unduly increasing the reduction amount.

How to Calculate the Coefficient C of the General Reduction Step by Step?

The calculation of coefficient C follows a precise regulatory formula, detailed in Article D.241-7 of the French Social Security Code. Here’s 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 employees or more and an FNAL of 0.50%:

T = 7.00% (reduced MMID) + 8.55% (capped old-age) + 2.11% (uncapped old-age) + 3.45% (reduced family allowances) + 0.49% (lump sum AT/MP) + 0.50% (FNAL) + 4.05% (unemployment) + eligible complementary retirement contributions.

The total T rate with eligible Agirc-Arrco contributions is approximately 0.4021 (or 40.21%) for an FNAL of 0.50%, and approximately 0.3981 (or 39.81%) for an FNAL of 0.10%.

Step 2: Calculate the Coefficient C

The formula for the coefficient is:

C = (T ÷ 0.6) × \[ (1.6 × Annual SMIC ÷ Annual Gross Salary) − 1 \]

The coefficient C must be calculated with four decimal places, applying the rounding rule to the nearest ten-thousandth. The coefficient C cannot exceed the maximum value Cmax = T. If the calculation results in a coefficient greater than T, T is retained.

Step 3: Calculate the Amount R of the Reduction

The amount of the reduction is:

R = C × Annual Gross Salary

The amount R is rounded to the nearest cent. In practice, the calculation is conducted month by month with progressive or annual regularisation (method of progressive regularisation 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 regulatory distribution key. This allocation is detailed in the following section.

How to Allocate the Reduction R between URSSAF and Agirc-Arrco According to the Attribution Key 2026?

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

Companies with FNAL at 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 FNAL at 0.50% (50 employees and more)

URSSAF Share = R × (34.20 ÷ 40.21) ≈ R × 85.05%
Agirc-Arrco Share = R − URSSAF Share ≈ R × 14.95%

Rounding is conducted to the nearest cent. The difference between the two formulas is minimal, but it must be adhered to, failing which the collecting agencies may reject the allocation.

What Are the Rules for Non-Cumul and Cumul of the General Reduction with Other Schemes?

The principle of non-cumul for the same risk prohibits the accumulation of the general reduction with another relief concerning a contribution already included in scope T. When such accumulation is possible, the employer must opt for the most favorable scheme. For instance, an employer cannot combine the general reduction with a ZFU-TE exemption covering the same contributions: they must choose one or the other.

However, cumul is allowed with measures concerning contributions or contributions located outside of scope T. Thus, the general reduction can be combined with:

The flat-rate deduction on overtime (for companies with fewer than 20 employees, then from 20 to 249 employees);
Exemptions for professional training contributions;
Specific exemptions in overseas territories (LODEOM), under the conditions provided for in the regulations.

How to Declare the General Reduction in DSN?

The declaration of the general reduction in DSN follows specific codes:

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

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

What is the Complete Operational Order for Calculating the General Reduction?

To avoid any errors, here is the order to be strictly followed:

(i) Calculate Coefficient C: with 4 decimal places, ensuring that C ≤ Cmax (= T);
(ii) Calculate Amount R: C × gross salary, rounded to the nearest cent;
(iii) Allocation According to the Key: distribution between URSSAF share and 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 discrepancies).

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

What Are the Frequent Errors in Applying the General Reduction?

URSSAF checks frequently reveal the following errors:

1. Use of the Actual AT/MP Rate Instead of the Lump Sum of 0.49 Points. This is the most costly error: it artificially increases or decreases the T coefficient and thus the reduction amount. An URSSAF correction may result in either direction.

2. Consideration of the Unemployment Bonus-Malus Rate Instead of the Common Law Rate. The bonus-malus must be neutralized within scope T. Only the rate of 4.05% is retained.

3. Decimal Errors in Calculating Coefficient C. The coefficient must have exactly 4 decimal places. Rounding to 2 decimal places significantly distorts the calculation for salaries near the minimum wage.

4. Non-Update of the Parameters as of January 1, 2026. The change in the uncapped old-age rate from 1.90% to 2.11% modifies the value of T. Payroll software must be updated accordingly.

5. Prohibited Cumul with an Exemption Covering the Same Risk. Employers must systematically check for any double advantage on the same risk covered by the scope T.

FAQ — Frequently Asked Questions About the General Employer Contribution Reduction

Does the General Reduction Apply to Apprentices?

No. Since January 1, 2019, apprenticeship contracts benefit from a specific exemption (Article L.6243-2 of the Labour Code) that replaces the general reduction. Apprentices are thus not eligible for the Fillon reduction but benefit from a regime at least as favorable.

How to Treat Part-Time Workers in the Calculation of the Reduction?

For part-time employees, the SMIC considered in the calculation of Coefficient C is prorated based on the contractual working duration relative to the legal duration. For example, a part-time employee 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 Coefficient C is Negative?

A negative Coefficient C means that the employee’s salary exceeds 1.6 SMIC. In this case, the reduction is null (C = 0). The employee does not qualify for the general reduction for the period concerned. In case of progressive regularisation, it is possible for one month to yield a positive C and another a negative C, with the regularisation occurring by offsetting.

Is the General Reduction Cumulative with CICE?

The CICE was abolished as of January 1, 2019, and transformed into a permanent reduction of employer contributions (a 6-point decrease in the sickness rate for salaries below 2.5 SMIC). This decrease is now integrated into the scope T of the general reduction. The question of cumul no longer arises.

How to Regularise at Year-End if Progressive Method Was Not Applied?

If the employer has applied the monthly calculation method without progressive regularisation, an annual regularisation must be performed in December (or during the last payslip of the fiscal year). The annual amount of the reduction is recalculated based on the total annual salary, and the difference from the sum of the monthly reductions is attributed (in addition or subtraction) to the last payslip. This regularisation is declared in DSN with CTPs 669 and 801.

For any questions regarding the application of the general reduction in your company, contact our firm. We can audit your payslips and secure your calculations before a potential URSSAF audit.