Managing Sick Leave and Payment Subrogation in 2025: A Comprehensive Guide

Introduction: Sick Leave and Subrogation, Complex but Essential Mechanisms

Managing sick leave within payroll is one of the most complex operations for payroll managers. It involves mastering the calculation of indemnités journalières de sécurité sociale (IJSS) (daily sickness benefits), the mechanism of subrogation, salary maintenance by the employer (either legal or conventional), and the impacts on social contributions and the social security ceiling.

The BOSS (Official Bulletin of the Social Security) provides crucial clarifications on these topics, particularly regarding the reduction of the ceiling in cases of subrogation and the maintenance of complementary social protection (PSC) during the suspension of the employment contract. This guide will assist you in the complete management of sick leave within payroll for 2025.

Waiting Period and Calculation of IJSS

The 3-Day Waiting Period

In the case of ordinary sick leave, social security applies a 3-day waiting period during which no IJSS is paid. This period begins from the first day of absence as prescribed by the doctor. IJSS is paid from the 4th day of absence.

Exceptions to the waiting period include:

• Sick leave for long-term illness (ALD): the waiting period applies only to the first absence.
• Work-related accidents and occupational diseases: no waiting period; IJSS is paid from the day following the absence.
• Maternity: no waiting period.

Employers may be required to compensate for this waiting period depending on the provisions of the applicable collective agreement. Many agreements stipulate a salary maintenance from the first day of absence, thus eliminating the effect of the waiting period for the employee.

Calculation of Sick Leave IJSS

Sick leave IJSS are calculated using the following formula:

IJSS = 50% of the daily reference salary (SJB)

The daily reference salary is calculated based on the last 3 months of gross salary prior to the leave, capped at 1.8 times the monthly SMIC (minimum wage).

In 2025, with a gross monthly SMIC of €1,801.80 (based on 35 hours), the ceiling is:

1,801.80 x 1.8 = €3,243.24

The SJB is calculated as follows: salary of the last 3 months (capped) / 91.25 days.

Concrete Example:

• Employee with a gross monthly salary of €2,800 (below the cap of €3,243.24)
• SJB = (2,800 x 3) / 91.25 = €92.05
• IJSS = 92.05 x 50% = €46.03 per day

For an employee with a salary of €4,000 (above the cap):

• SJB = (3,243.24 x 3) / 91.25 = €106.63
• IJSS = 106.63 x 50% = €53.31 per day (maximum IJSS).

Subrogation: The Employer Receives IJSS Instead of the Employee

Definition and Principle of Subrogation

Subrogation is the mechanism by which the employer substitutes for the employee to directly receive IJSS from social security. In return, the employer advances the corresponding salary maintenance for the period of absence.

The BOSS specifies that subrogation is possible when two conditions are met:

1. The employer maintains all or part of the salary during the absence (legal, conventional, or voluntary obligation).
2. The salary maintenance is at least equal to the amount of IJSS for the same period.

Subrogation is not mandatory but is widely practiced as it simplifies management for the employee, who receives a regular salary without interruption.

Total vs Partial Subrogation

Two situations are distinguished:

• Total subrogation: the employer maintains 100% of the salary and receives IJSS as reimbursement. The employee does not suffer any salary loss.
• Partial subrogation: the employer maintains only part of the salary (e.g., 90% or 66.66%) and receives the corresponding IJSS.

The distinction is important as it has consequences for the applicable social security ceiling.

Impact on the Social Security Ceiling

The Ceiling Reduction Rule

The BOSS provides essential clarifications on the management of the social security ceiling in cases of subrogation:

• If the employer fully maintains the salary (total subrogation with supplement), the ceiling is not reduced. The employee is treated as if they were in normal activity.
• If the employer pays only the IJSS through subrogation (without employer supplement), the ceiling is reduced in proportion to the period of absence. The subrogated IJSS are only subject to CSG/CRDS at the reduced rate.

This distinction is fundamental for calculating capped contributions (basic retirement, Agirc-Arrco tranche 1) during the sick leave period.

Example of Ceiling Reduction

Let’s consider an employee absent for the entire month of March 2025 (31 calendar days) with a usual gross salary of €3,500.

Case 1: Full Salary Maintenance

• The employer pays €3,500 gross.
• They receive IJSS via subrogation (approximately €1,380).
• The social security ceiling remains at €3,925 (no reduction).
• Contributions are calculated normally on €3,500.

Case 2: Only Subrogated IJSS (without additional maintenance)

• The employer pays only the subrogated IJSS (approximately €1,380).
• The ceiling is reduced: €0 (total absence for the month, no remuneration for activity).
• The IJSS are only subject to CSG/CRDS at the reduced rate (6.20% CSG + 0.50% CRDS).

Employer Salary Maintenance: Legal and Conventional Obligations

Legal Maintenance (Monthlyisation Law)

Under Article L.1226-1 of the Labour Code, the employer is required to supplement the IJSS for employees who have at least one year of seniority in the company. The maintenance is as follows:

• From the 1st to the 30th day: 90% of the gross remuneration the employee would have received if they had worked.
• From the 31st to the 60th day: 66.66% (two-thirds) of the same remuneration.

These periods are increased by 10 days for every 5 years of seniority, up to a maximum of 90 days at 90% and 90 days at 66.66%.

Salary maintenance is understood after deducting IJSS: the employer only pays the difference between the IJSS and the guaranteed maintenance level.

Conventional Maintenance

Many collective agreements provide more favourable provisions than the law:

• Maintenance at 100% from the 1st day of absence (no waiting period).
• Longer maintenance durations.
• Reduced seniority conditions (6 months, or no condition at all).

It is imperative to check the applicable collective agreement to determine the exact level of maintenance. If the collective agreement contains more favourable provisions, these prevail over the legal scheme.

Example Calculation of Salary Maintenance

An employee with 3 years of seniority, a gross salary of €2,800, on sick leave from February 1 to February 28, 2025:

• Calendar days of absence: 28 days
• Waiting period for social security: 3 days (IJSS from the 4th day)
• Daily IJSS: €46.03
• Number of days compensated by social security: 25 days
• Total gross IJSS: 46.03 x 25 = €1,150.75
• Maintenance at 90%: 2,800 x 90% = €2,520
• Employer’s supplement: 2,520 – 1,150.75 = €1,369.25

On the payslip will appear: subrogated IJSS (€1,150.75), employer’s supplement (€1,369.25), for a reconstructed gross of €2,520.

Social Contributions During Sick Leave

Treatment of Subrogated IJSS

Subrogated IJSS are not subject to standard social contributions. They are only subject to:

• CSG at the reduced rate of 6.20% (instead of 9.20% for income from activity).
• CRDS of 0.50%.

The base for CSG/CRDS on IJSS is 100% of the amount of IJSS (no 1.75% reduction).

Treatment of Employer’s Supplement

The salary supplement paid by the employer is subject to all social contributions under standard conditions (employee and employer contributions). It is included in the contribution base just like an activity salary.

Complementary Social Protection (PSC) During Sick Leave

The BOSS specifies that complementary social protection (mutuelle and provident insurance) must be maintained for the entire duration of suspension of the employment contract due to illness, provided that the employee benefits from salary maintenance (total or partial) or IJSS.

Contributions for mutual insurance and provident insurance continue to be deducted from the payslip. The base for these contributions is generally calculated based on the reconstructed remuneration (what the employee would have received had they worked).

This maintenance is a condition for the mandatory and collective nature of the scheme, necessary for the benefit of social exemption of the employer’s contributions. Interrupting the scheme during sick leave would jeopardise the exemptions for all staff.

Practical Management in Payroll Software

Step 1: Entering the Absence

The first step is to enter the sick absence into the payroll software with the precise start and end dates of the absence. The software automatically calculates:

• The deduction for absence (method of working days, calendar days, or based on parameter settings).
• The waiting period.
• The compensated days.

Step 2: Estimating and Entering IJSS

In the absence of a return from the CPAM (a common delay of 2 to 4 weeks), the employer must estimate the IJSS to prepare the payslip. Payroll software includes an estimation calculation engine. A regularisation will be made upon receipt of the definitive statement from the CPAM.

Step 3: Calculating Salary Maintenance

The software applies the maintenance rules (legal or conventional) and calculates the employer’s supplement by deducting the IJSS (estimated or actual) from the guaranteed amount.

Step 4: Regularisation

Upon receipt of the definitive statement from the CPAM, the payroll manager adjusts any discrepancies between the estimate and the actual amount of IJSS. This regularisation can occur in a subsequent payslip.

Long-Term Sick Leaves: Points of Caution

For long-term sick leaves (beyond 6 months), several points require attention:

• End of Employer Maintenance: beyond the duration of conventional maintenance, only IJSS and possibly provident allowances are paid.
• Portability of the mutual scheme: in case of contract termination, the employee benefits from portability for 12 months.
• Return to Work Visit: mandatory after an absence of more than 60 days (non-professional illness) or 30 days (work-related accident).
• Employer-Ordered Medical Check: the employer may have the leave checked by an appointed doctor.

FAQ: Your Questions About Sick Leave and Subrogation in Payroll

Is subrogation mandatory for the employer?

No, subrogation is not mandatory as such. However, it becomes automatic when the employer maintains the salary at a level at least equal to the IJSS during the absence period. In practice, once the employer practices salary maintenance (legal or conventional), they have an interest in implementing subrogation to directly recover IJSS from the CPAM rather than allowing it to pass through the employee. The request for subrogation is made via the DSN.

How to calculate employer supplement when the employee is on therapeutic part-time?

In the case of therapeutic part-time, the employee receives both a salary for the hours worked and IJSS for the hours not worked. The calculation of the employer’s supplement is based on the actual loss of remuneration. The employer compares the reconstructed remuneration (what the employee would have received at full time) with the sum of the part-time salary and IJSS and supplements the difference according to the guaranteed maintenance level.

Is the social security ceiling always reduced during sick leave?

No, the ceiling is not reduced if the employer fully maintains the salary. The ceiling reduction only occurs when the employer pays only the subrogated IJSS without a supplement, or when the supplement does not allow for the total reconstructed usual remuneration. The BOSS specifies that the full maintenance of remuneration neutralises the reduction of the ceiling.

Do subrogated IJSS count towards the net social amount (MNS)?

Yes, IJSS paid by subrogation are included in the calculation of the MNS. They are part of the total gross remuneration according to the order of January 31, 2023. Conversely, IJSS paid directly to the employee by the CPAM (without subrogation) are excluded from the MNS shown on the payslip since they do not pass through the employer.

Must the mutual scheme be maintained throughout the sick leave?

Yes, complementary social protection (mutuelle and provident insurance) must be maintained for the entire duration of suspension of the work contract due to illness, in accordance with the provisions of the BOSS. This maintenance applies to both the employer’s and employee’s contributions. Interrupting the scheme during the leave could jeopardise the collective and mandatory nature of the system, resulting in an URSSAF audit relating to all social exemptions for the employer’s contributions.