Introduction: Sick Leave and Subrogation, Complex but Essential Mechanisms

Managing sick leave in payroll is one of the most complex operations for payroll managers. It involves the simultaneous mastery of calculating daily social security benefits (indemnités journalières de sécurité sociale or IJSS), the mechanism of subrogation, employer salary maintenance (legal or contractual), and the impacts on social contributions and the social security ceiling.

The BOSS (Bulletin Officiel de la Sécurité Sociale) provides essential clarifications on these topics, particularly regarding the reduction of the ceiling in the event of subrogation and the maintenance of complementary social protection (protection sociale complémentaire, PSC) during the suspension of the employment contract. This guide will assist you in the comprehensive management of sick leave in payroll for 2025.

The 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 on the first day of sick leave prescribed by the doctor. IJSS is paid starting from the 4th day of absence.

Exceptions to the waiting period include:

Sick leave for a long-term condition (affection de longue durée, ALD): the waiting period applies only to the first leave.
Work-related accidents and occupational diseases: no waiting period, IJSS is paid from the day after the leave begins.
Maternity: no waiting period.

The employer may be required to compensate for this waiting period depending on the applicable collective agreement. Many agreements provide for salary maintenance from the first day of absence, thereby nullifying the impact of the waiting period for the employee.

Calculation of IJSS for Illness

IJSS for illness is calculated as follows:

IJSS = 50% of the daily reference salary (salaire journalier de base, SJB)

The SJB is calculated based on the 3 most recent months of gross salary prior to the leave, subject to a limit of 1.8 times the gross monthly minimum wage (SMIC).

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 ceiling 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 ceiling):

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 the IJSS from social security. In return, the employer advances the employee the salary maintenance corresponding to the period of leave.

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

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

Subrogation is not mandatory, but it 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 the entire salary (100% of the gross salary) and receives the IJSS in reimbursement. The employee does not suffer any loss of salary.
Partial subrogation: The employer maintains only part of the salary (e.g., 90% or 66.66%) and receives the corresponding IJSS.

This distinction is important as it has consequences on the applicable social security ceiling.

The Ceiling Reduction Rule

The BOSS provides essential clarifications on managing the social security ceiling in the event of subrogation:

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

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

Example of Ceiling Reduction

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.
Receives IJSS by subrogation (approximately €1,380).
The SS ceiling remains €3,925 (no reduction).
Contributions are calculated normally on €3,500.

Case 2: Subrogation of IJSS Only (without supplementary maintenance)

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

Employer Salary Maintenance: Legal and Contractual Obligations

Legal Maintenance (Monthlyization Law)

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

From the 1st to the 30th day: 90% of the gross remuneration that 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 extended 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 the IJSS: the employer pays only the supplement to bridge the gap between the IJSS and the guaranteed maintenance level.

Contractual Maintenance

Many collective agreements provide for more favorable provisions than the law:

Maintenance at 100% from the 1st day of absence (without waiting period).
Longer maintenance durations.
Reduced seniority requirements (6 months, or even no requirement).

It is imperative to check the applicable collective agreement to determine the exact level of maintenance. In cases where the contract includes more favorable provisions, those take precedence over the legal framework.

Numerical Example 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.
SS waiting period: 3 days (IJSS from the 4th day).
Daily IJSS: €46.03.
Number of days compensated by SS: 25 days.
Total gross IJSS: 46.03 x 25 = €1,150.75.
Maintenance at 90%: 2,800 x 90% = €2,520.
Employer supplement: 2,520 – 1,150.75 = €1,369.25.

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

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 employment income).
CRDS of 0.50%.

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

Treatment of Employer Supplement

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

The BOSS clarifies that complementary social protection (mutuelle and prévoyance) must be maintained for the entire duration of the suspension of the employment contract due to illness, as long as the employee benefits from a salary maintenance (total or partial) or IJSS.

Contributions to mutuelle and prévoyance continue to be deducted from the payslip. The basis for these contributions is generally calculated based on the reconstructed salary (what the employee would have earned if they had worked).

This maintenance is a condition for the mandatory and collective nature of the regime, necessary for benefiting from the social exemption on employer contributions. Any interruption of the regime during sick leave would jeopardize the exemptions for all staff.

Practical Management in Payroll Software

Step 1: Entering the Absence

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

The deduction for absence (using the method of working days, business days, or calendar days as per configuration).
The waiting period.
The compensated days.

Step 2: Estimating and Entering IJSS

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

Step 3: Salary Maintenance Calculation

The software applies the maintenance rules (legal or contractual) and calculates the employer supplement by subtracting the IJSS (estimated or actual) from the guaranteed amount.

Step 4: Regularization

Upon receipt of the definitive statement from the CPAM, the payroll manager regularizes any discrepancies between the estimate and the actual amount of IJSS. This regularization may occur on a subsequent payslip.

Long-Term Leaves: Caution Points

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

End of employer maintenance: Beyond the duration of contractual maintenance, only IJSS and possibly pre-accident compensation are paid.
Portability of mutuelle: In case of termination of the contract, the employee benefits from portability for 12 months.
Return Visit: Mandatory after a leave of more than 60 days (non-professional illness) or 30 days (work-related accident).
Employee’s Medical Re-examination: The employer may have the leave checked by an appointed physician.

FAQ: Your Questions About Sick Leave and Payroll Subrogation

Is Subrogation Mandatory for the Employer?

No, subrogation is not mandatory per se. However, it becomes automatic when the employer maintains the salary at a level at least equal to the IJSS during the leave period. In practice, once the employer maintains salary (legal or contractual), it is in their interest to establish subrogation to recover IJSS directly from the CPAM rather than passing them through the employee. The subrogation request is made via the DSN.

How to Calculate the Employer Supplement When the Employee is on Partial Therapeutic Leave?

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

No, the ceiling is not reduced if the employer fully maintains the salary. The reduction of the ceiling only occurs when the employer pays only the subrogated IJSS without any supplements or when the supplement does not allow for the full reconstruction of the usual salary. The BOSS specifies that maintaining the full salary neutralizes the ceiling reduction.

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

Must the Mutuelle Be Maintained During the Entire Sick Leave?

Yes, the complementary social protection (mutuelle and prévoyance) must be maintained for the entire duration of the suspension of the work contract due to illness, in accordance with the provisions of the BOSS. This maintenance concerns both the employer’s and the employee’s share of the contributions. Interrupting the regime during the leave could challenge the collective and mandatory nature of the arrangement, leading to an URSSAF correction affecting all social exemptions on employer contributions.

Managing Sick Leave and Payroll Subrogation in France: A Comprehensive Guide for Employers in 2025