French Labour Law

How to Manage Employee Savings Plans in Payroll in 2025: A Comprehensive Guide

DAIRIA Law · 2026-06-09 · 10 min

How to Manage Employee Savings Plans in Payroll in 2025: A Comprehensive Guide

Introduction: Employee Savings, A Tool for Loyalty and Social Optimization

Employee savings includes all schemes that allow companies to involve their employees in their financial results and provide them with medium or long-term savings: profit-sharing (intéressement), participation, company savings plans (PEE), collective retirement savings plans (PERCO/PERECO), and more recently, the Value Sharing Premium (PPV). In 2025, these schemes benefit from favorable social and tax treatment, the specifics of which are detailed in the Official Bulletin of Social Security (BOSS, boss.gouv.fr).

This comprehensive guide is intended for payroll managers, HR directors, and financial executives looking to master the treatment of employee savings in payroll: exemption conditions, social security contributions by headcount, CSG/CRDS, employer contribution, PPV, and reporting in DSN.

Profit-Sharing: Conditions, Caps, and Social Regime

Definition and Implementation Conditions

Profit-sharing is an optional scheme that allows companies to pay a collective bonus to employees based on the company’s results or performance. It is established by a company agreement (or unilateral decision in companies with fewer than 50 employees since the PACTE law) for a duration of 1 to 5 years. The calculation formula must be random (the payment is not guaranteed) and collective (all employees must benefit, possibly with a maximum seniority condition of 3 months).

Payment Caps

The total amount of profit-sharing cannot exceed 20% of the company’s gross payroll. The individual amount is capped at 75% of the Annual Social Security Ceiling (PASS), which equals 75% × 47,100 € = 35,325 € in 2025.

Social Regime of Profit-Sharing

Profit-sharing is exempt from social security contributions (excluded from the base of Article L.242-1 of the French Social Security Code), in accordance with BOSS. However, it remains subject to:

  • CSG: 9.20% calculated on 100% of the amount (without the 1.75% deduction as the deduction for professional expenses does not apply to employee savings income)
  • CRDS: 0.50% on 100% of the amount
  • Social forfait: variable depending on the headcount (see dedicated section)

Note: Unlike salaries, the 1.75% deduction for professional expenses does not apply to the base of CSG/CRDS on profit-sharing and participation.

Example Calculation

An employee receives a profit-sharing amount of 3,000 € in a company of 200 employees:

  • Social Security Contributions: 0 € (exempt)
  • CSG: 3,000 × 9.20% = 276 €
  • CRDS: 3,000 × 0.50% = 15 €
  • Employer’s social forfait: 3,000 × 20% = 600 €
  • Net received by the employee: 3,000 – 276 – 15 = 2,709 € (if not placed in a savings plan)

Participation is mandatory in companies with at least 50 employees that have generated a sufficient net taxable profit. The legal formula for calculating the special participation reserve (RSP) is:

RSP = ½ × (B – 5% C) × S / VA
Where:

  • B = net taxable profit
  • C = equity
  • S = gross payroll
  • VA = value added

The participation agreement may provide for a derogatory formula, provided that it is at least as favorable as the legal formula.

Distribution Among Employees

The distribution can be uniform, proportional to salary, proportional to the duration of presence, or a combination of these criteria. The individual cap is the same as for profit-sharing: 75% of the PASS = 35,325 € in 2025.

Social Regime of Participation

Participation follows the same social regime as profit-sharing:

  • Exemption from social security contributions
  • CSG 9.20% + CRDS 0.50% without deduction
  • Social forfait according to headcount

Blocking of Amounts

Amounts resulting from participation are blocked for 5 years (PEE) or until retirement (PERCO/PERECO), except in cases of early release (marriage, birth of the third child, primary residence acquisition, divorce, over-indebtedness, etc.). The employee can request immediate payment of the participation, but in this case, the amounts are subject to income tax.

PEE, PERCO, and PERECO: Savings Plans and Employer Contributions

Company Savings Plan (PEE)

The PEE is a collective savings plan allowing employees to build a portfolio of securities with the help of the company. The amounts paid (profit-sharing, participation, voluntary contributions) are blocked for a minimum of 5 years. The company can match employee contributions.

PERCO and PERECO

The PERCO (Collective Retirement Savings Plan) and the PERECO (Collective Corporate Retirement Savings Plan, “PACTE law” version) are plans geared toward retirement. Amounts are blocked until retirement of the employee, with limited early release cases (acquisition of the primary residence, life accidents).

Employer Contribution

The employer contribution (abondement) is the amount paid by the employer in addition to employee contributions. It is exempt from social security contributions within the following limits:

  • PEE: maximum contribution of 8% of the PASS per year and per employee, i.e. 8% × 47,100 = 3,768 € in 2025, within the limit of 300% of the employee contribution
  • PERCO/PERECO: maximum contribution of 16% of the PASS per year and per employee, i.e. 16% × 47,100 = 7,536 € in 2025, within the limit of 300% of the employee contribution

The employer contribution is subject to CSG (9.20%) and CRDS (0.50%) without deduction, as well as to the social forfait.

Example: PEE Contribution

An employee contributes 1,000 € to their PEE, and the company matches at 200%:

  • Employer contribution: 1,000 × 200% = 2,000 € (within the limit of 3,768 €)
  • CSG on the contribution: 2,000 × 9.20% = 184 €
  • CRDS on the contribution: 2,000 × 0.50% = 10 €
  • Employer’s social forfait: 2,000 × 20% = 400 €
  • Net received by the employee on their PEE: 2,000 – 184 – 10 = 1,806 €

Social Forfait: Rates Based on Company Headcount

General Principle

The social forfait is an employer contribution based on employee savings amounts exempt from social security contributions. The standard rate is 20%. It applies notably to participation, profit-sharing (in companies with 250 or more employees), and contributions.

Exemptions Based on Headcount

HeadcountProfit-SharingParticipationPEE ContributionPERCO/PERECO Contribution
Fewer than 50 employees0%0%20%20% (or 16% for PERECO)
50 to 249 employees0%20%20%20% (or 16% for PERECO)
250 employees and more20%20%20%20% (or 16% for PERECO)

Key Points:

  • Companies with fewer than 50 employees are exempt from the social forfait on both profit-sharing AND participation.
  • Companies with fewer than 250 employees are exempt from the social forfait on profit-sharing only.
  • The social forfait on the PERECO contribution may be reduced to 16% (instead of 20%) under certain conditions.

Value Sharing Premium (PPV) in 2025

Payment Conditions

The Value Sharing Premium (formerly Macron/PEPA premium) can be paid by any employer to its employees, regardless of headcount. It is optional and can be established by company agreement or unilateral decision by the employer. The amount is free, with an exemption ceiling of 3,000 € per employee per year (increased to 6,000 € if the company has an agreement for profit-sharing or voluntary participation).

Social Regime of PPV in 2025

In 2025, the social regime of the PPV is as follows:

  • Exemption from social security contributions (within the limit of the ceiling)
  • CSG (9.20%) and CRDS (0.50%) due on 100% of the amount
  • Specific exemption for companies with fewer than 50 employees paying PPV to employees earning less than 3 times the minimum wage: total exemption including CSG/CRDS and income tax (prolonged until December 31, 2026)

PPV Example

Company with 30 employees, employee earning 2,500 € gross/month (< 3 times minimum wage at 1,801.80 × 3 = 5,405.40 €):

  • PPV paid: 2,000 €
  • Social Security Contributions: 0 €
  • CSG/CRDS: 0 € (exemption < 50 employees and < 3 times minimum wage)
  • Income Tax: 0 € (exemption)
  • Net received: 2,000 €

Same company, employee earning 6,000 € gross/month (> 3 times minimum wage):

  • PPV paid: 2,000 €
  • Social Security Contributions: 0 €
  • CSG: 2,000 × 9.20% = 184 €
  • CRDS: 2,000 × 0.50% = 10 €
  • Income Tax: subject to withholding tax
  • Net before withholding tax: 1,806 €

CSG and CRDS on Employee Savings: Specific Rules

Assessment Without Deduction

Unlike salaries (assessment CSG/CRDS = 98.25% of gross), employee savings income (profit-sharing, participation, contributions, PPV) is subject to CSG and CRDS on 100% of their amount, without applying the 1.75% deduction for professional expenses. BOSS specifies that this deduction is reserved for income from employment stricto sensu.

Applicable Rates

  • Deductible CSG: 6.80% (deductible from taxable income if sums are taxable)
  • Non-deductible CSG: 2.40%
  • CRDS: 0.50% (non-deductible)
  • Total: 9.70%

Payroll Treatment and DSN Reporting

Payroll Slip Items

Employee savings appears on the payroll slip for the month of payment. Specific items include:

  • Gross amount of profit-sharing/participation/PPV
  • Deductible and non-deductible CSG
  • CRDS
  • Net paid or allocated to the savings plan

DSN Reporting

Employee savings amounts are reported in DSN in the following blocks:

  • Remuneration Block (S21.G00.51): with specific code types (profit-sharing, participation)
  • Contribution Block (S21.G00.78/79/81): social forfait, CSG/CRDS
  • Taxable Base Block (S21.G00.78): specific bases for social forfait

The social forfait is reported with the Personnel Type Code (CTP) 012 for the 20% rate. The employer must ensure consistency between the reported amounts and the amounts actually paid or allocated.

Impact on Taxable Net Income and Social Net Income

Amounts of employee savings paid directly to the employee (not placed in a savings plan) are included in the taxable net income. Amounts allocated to a PEE, PERCO, or PERECO are excluded from the taxable net income (exemption from income tax as long as the amounts remain blocked).

Key Considerations for Payroll Managers

Compliance with Caps

Exceeding the exemption caps leads to the re-integration into the contribution base of the excess fraction. The payroll manager must track annual accumulations per employee.

Payment Deadline

Profit-sharing and participation must be paid or allocated no later than the last day of the 5th month following the end of the fiscal year (i.e., May 31 for a fiscal year ending December 31). After this deadline, late interest is owed to employees.

Employee Information

The employer must provide each employee with an individual summary detailing the amounts attributed under profit-sharing and/or participation, investment options, and deadlines for exercising their choices (15 days from notification).

FAQ: Employee Savings in Payroll

Can an employee request immediate payment of their participation?

Yes, since the PACTE law (2019), an employee can request immediate payment of all or part of their participation. In this case, the amounts are subject to income tax (included in taxable net income). The request must be made within 15 days of notification of rights. The employer then has the legal deadline to make the payment.

Is the social forfait due on the PPV?

No. The PPV is not subject to the social forfait, regardless of the size of the company. It is exempt from social security contributions and, in certain cases, CSG/CRDS. The social forfait only applies to conventional employee savings schemes (profit-sharing, participation, contributions).

How to handle an employee who leaves the company before the profit-sharing payment?

An employee who leaves the company before the profit-sharing payment retains their rights. The company must pay them their share of profit-sharing, calculated pro-rata based on their duration of presence. Payment is sent to the last known address or to the bank account provided. If the employee cannot be located, the amounts are held by the French Caisse des dépôts et consignations.

Can the contribution differ for different categories of employees?

No, the contribution must be uniform for all employees. The rate and cap of the contribution must be identical, in accordance with the collective principle of savings plans. However, a specific contribution may be provided for voluntary contributions on one hand and contributions from profit-sharing/participation on the other.

Can the PPV be paid in multiple installments?

Yes, since the law of November 29, 2023, the PPV can be paid in one or more installments, limited to one payment per quarter, within the calendar year. This flexibility allows the employer to spread out the cash effort while maintaining the benefit of the exemption.

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