Managing Sick Leave and Salary Subrogation in Payroll for Employers in 2026: Comprehensive Guide

Introduction: Sick Leave and Subrogation, Complex Yet Essential Mechanisms

Managing sick leave in payroll is one of the most complex operations for payroll managers. It involves simultaneously mastering the calculation of daily social security allowances (IJSS), the mechanism of subrogation, employer salary maintenance (legal or contractual), and the impacts on social contributions and the social security ceiling.

The BOSS (Official Bulletin of Social Security) provides critical clarifications on these topics, notably on the reduction of the ceiling in the case of subrogation and the maintenance of supplementary social protection (PSC) during the suspension of the employment contract. This guide will assist you in comprehensively managing sick leave in payroll for 2026.

The Waiting Period and the 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 starts from the first day of leave prescribed by the doctor. IJSS is paid starting from the 4th day of leave.

Exceptions to the waiting period include:

• Sick leave for long-term illnesses (ALD): the waiting period applies only to the first absence.
• Work 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 provisions of the applicable collective agreement. Many agreements provide for salary maintenance from the first day of absence, thereby eliminating the effect of the waiting period for the employee.

The Calculation of IJSS for Illness

IJSS for illness is calculated using the following formula:

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

The daily base salary is calculated based on the 3 last months of gross salary prior to the leave, limited to 1.4 times the monthly minimum wage (SMIC). This ceiling was reduced from 1.8 to 1.4 SMIC by Decree No. 2025-160 of February 20, 2025, for work stoppages beginning on April 1, 2025.

In 2026, with a gross monthly SMIC of €1,867.02 (as of June 1, 2026, based on 35 hours), the ceiling is:

1,867.02 x 1.4 = €2,613.83

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

Concrete Example:

• Employee with a gross monthly salary of €2,400 (below the ceiling of €2,613.83)
• SJB = (2,400 x 3) / 91.25 = €78.90
• IJSS = 78.90 x 50% = €39.45 per day

For an employee with a salary of €4,000 (above the ceiling of €2,613.83), the salary considered is capped:

• SJB = (2,613.83 x 3) / 91.25 = €85.93
• IJSS = 85.93 x 50% = €42.97 per day (maximum IJSS for a stoppage beginning on or after July 1, 2026)

Subrogation: The Employer Receives IJSS Instead of the Employee

Definition and Principle of Subrogation

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

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

1. The employer maintains all or part of the remuneration during the leave (legal, contractual, 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 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 remuneration (100% of gross salary) and receives the IJSS as reimbursement. The employee does not suffer any loss of salary.
• Partial subrogation: the employer only maintains part of the remuneration (for example, 90% or 66.66%) and receives the corresponding IJSS.

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

The Impact on the 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 remuneration (total subrogation with a supplement), the ceiling is not reduced. The employee is treated as if they were in normal activity.
• If the employer only pays IJSS through subrogation (without employer supplement), the ceiling is reduced pro-rata 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 pension, Agirc-Arrco tranche 1) during the sick leave period.

Example of Ceiling Reduction

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

Case 1: Full Salary Maintenance

• The employer pays €3,500 gross.
• They receive IJSS by subrogation (approximately €1,380).
• The social security ceiling remains at €4,005 (no reduction).
• Contributions are calculated normally on €3,500.

Case 2: Subrogation of IJSS Only (Without Additional 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 rate (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 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 durations are increased by 10 days for every 5 years of seniority, capped at 90 days at 90% and 90 days at 66.66%.

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

Contractual Maintenance

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

• 100% maintenance from the first day of leave (without waiting period).
• Longer maintenance durations.
• Reduced seniority conditions (6 months, or even none).

It is imperative to verify the applicable collective agreement to determine the exact maintenance level. In the case of more favorable provisions in the agreement, those will prevail over the legal provisions.

Example Calculation of Salary Maintenance

An employee with 3 years of seniority, a gross salary of €2,800, in sick leave from February 1 to February 28, 2026:

• Calendar days of leave: 28 days.
• SS waiting period: 3 days (IJSS starting from the 4th day).
• Salary €2,800 > ceiling 1.4 SMIC (€2,613.83): the IJSS is capped.
• Daily IJSS: €42.97 (maximum amount).
• Number of days compensated by SS: 25 days.
• Total gross IJSS: €42.97 x 25 = €1,074.25.
• 90% maintenance: €2,800 x 90% = €2,520.
• Employer supplement: €2,520 – €1,074.25 = €1,445.75.

On the payslip, the following will appear: the subrogated IJSS (€1,074.25), the employer supplement (€1,445.75), for a reconstructed gross of €2,520.

Social Contributions During Sick Leave

Treatment of Subrogated IJSS

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

Treatment of Employer Supplement

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

Supplementary Social Protection (PSC) During Sick Leave

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

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

This maintenance is a condition for the mandatory and collective nature of the regime, necessary for benefit from the social exemption of employer contributions. Interrupting the regime during the sick leave would jeopardize the exemptions for the entire 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 exact start and end dates. The software automatically calculates:

• The absence deduction (method of working days, weekdays, or calendar days depending on settings).
• The waiting period.
• Compensated days.

Step 2: Estimation and Entry of IJSS

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

Step 3: Calculation of Salary Maintenance

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

Step 4: Regularization

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

Long-Term Sick Leave: Points of Vigilance

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

• End of employer maintenance: beyond the contractual maintenance duration, only IJSS and possibly provident allowances are paid.
• Mutual insurance portability: in the event of contract termination, 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 accident).
• Employer check-up: the employer can have the leave verified by a designated doctor.

FAQ: Your Questions About Sick Leave and Subrogation in Payroll

Is Subrogation Mandatory for Employers?

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 leave period. In practice, as soon as the employer practices salary maintenance (legal or contractual), they have an interest in implementing subrogation to recover the IJSS directly from the CPAM rather than letting them pass through the employee. The request for subrogation is made via the DSN.

How to Calculate the Employer Supplement When the Employee is on Therapeutic Part-Time?

In 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 real loss of remuneration. The employer compares the reconstructed remuneration (what the employee would have received full-time) with the sum of the part-time salary and IJSS, and completes 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 remuneration. The ceiling reduction only occurs when the employer pays only the subrogated IJSS without a supplement, or when the supplement does not allow for full reconstruction of the usual total remuneration. The BOSS specifies that full maintenance of remuneration neutralizes the ceiling reduction.

Do Subrogated IJSS Count in the Social Net Amount (MNS) Calculation?

Yes, IJSS paid by subrogation are included in the MNS calculation. They are part of the total gross remuneration as per the decree of January 31, 2023. In contrast, 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 Supplementary Insurance Be Maintained During Entire Sick Leave?

Yes, supplementary social protection (mutual insurance and provident) must be maintained for the entire duration of the suspension of the employment contract due to illness, according to the provisions of the BOSS. This maintenance includes both the employer and employee share of contributions. Interrupting the regime during the leave could jeopardize the collective and mandatory nature of the system, leading to an URSSAF adjustment concerning all social exemptions for employer contributions.