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 requires simultaneous mastery of calculating daily social security benefits (IJSS), the mechanism of subrogation, employer-paid salary maintenance (whether legal or conventional), and the impacts on social contributions and the ceiling of social security.

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 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 payments start from the 4th day of leave.

Exceptions to the waiting period include:

Sick leave due to a long-term illness (ALD): the waiting period only applies to the first leave.
Occupational accidents and diseases: no waiting period, IJSS is paid from the day after the incident.
Maternity: no waiting period.

The employer may be obliged to compensate for this waiting period depending on the provisions of the applicable collective agreement. Many agreements provide for salary maintenance starting from the first day of leave, thus eliminating the effect of the waiting period for the employee.

Calculation of IJSS for Illness

IJSS for illness is calculated using the following formula:

IJSS = 50% of the daily basic salary (SJB).

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

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

1,801.80 x 1.8 = €3,243.24.

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 €2,800 (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 earning €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 replaces the employee to directly receive IJSS from social security. In return, the employer advances the salary maintenance corresponding to the period of sick 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 (either legally, conventionally, or voluntarily).
The maintenance of salary 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 Subrogation vs Partial Subrogation

Two situations are distinguished:

Total Subrogation: the employer maintains the entire salary (100% of the gross salary) and receives the IJSS as reimbursement. The employee does not experience any loss of salary.
Partial Subrogation: the employer only maintains a portion of the salary (e.g., 90% or 66.66%) and receives the corresponding IJSS.

This distinction is important as it affects the applicable social security ceiling.

Rule for Reducing the Ceiling

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

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

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 an usual gross salary of €3,500.

Case 1: Full Salary Maintenance

The employer pays €3,500 gross.
They receive IJSS through 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 complementary maintenance)

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

Employer’s Salary Maintenance: Legal and Conventional Obligations

Legal Maintenance (Monthly Law)

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

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

These durations are extended by 10 days for each 5 years of seniority, up to a maximum of 90 days at 90% and 90 days at 66.66%.

Salary maintenance is understood to be after deduction of IJSS: the employer pays only the difference between the IJSS and the level of maintenance guaranteed.

Conventional Maintenance

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

100% maintenance starting from day 1 of leave (without a waiting period).
Longer maintenance durations.
Reduced seniority conditions (6 months or no condition).

It is essential to verify the applicable collective agreement to determine the exact level of maintenance. In cases where the agreement provides more favorable terms, these will prevail over the legal provisions.

Numerical Example of Salary Maintenance

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

Calendar days of leave: 28 days.
SS waiting period: 3 days (IJSS paid 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.
90% maintenance: 2,800 x 90% = €2,520.
Employer complement: 2,520 - 1,150.75 = €1,369.25.

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

Treatment of Subrogated IJSS

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

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

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

Treatment of Employer Complement

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

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

Mutual and provident contributions continue to be deducted from the pay slip. The base for these contributions is generally calculated 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 plan, necessary for the benefit of the social exemptions on employer contributions. An interruption of the plan during sick leave would jeopardize the exemptions for all personnel.

Practical Management in Payroll Software

Step 1: Inputting the Absence

The first step is to input the sick leave into the payroll software with the exact start and end dates of the leave. The software automatically calculates:

The deduction for absence (using business days, working days, or calendar days based on configuration).
The waiting period.
The days compensated.

Step 2: Estimation and Inputting of IJSS

In the absence of a response from the CPAM (often taking 2 to 4 weeks), the employer must estimate the IJSS for the payslip. Payroll software includes an estimating calculation tool. A regularization will occur upon receipt of the final breakdown from CPAM.

Step 3: Calculation of Salary Maintenance

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

Step 4: Regularization

Upon receipt of the final breakdown from 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 sick leave (beyond 6 months), several points require attention:

End of employer maintenance: beyond the duration of conventional maintenance, only IJSS and possibly provident benefits are paid.
Portability of the mutual: in the event of contract termination, the employee benefits from portability for 12 months.
Return-to-work visit: mandatory after a leave of more than 60 days (non-occupational illness) or 30 days (occupational accident).
Employer’s medical control: the employer can have the leave checked by a mandated doctor.

FAQ: Your Questions on 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 IJSS during the leave period. In practice, as soon as the employer implements salary maintenance (whether legal or conventional), they should set up subrogation to directly recover IJSS from CPAM rather than routing it through the employee. The request for subrogation is made through the DSN.

How do I calculate the employer complement 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 complement 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 the IJSS, and covers the difference based on the guaranteed maintenance level.

No, the ceiling is not reduced if the employer fully maintains the remuneration. The reduction only occurs when the employer pays only the subrogated IJSS without complement, or when the complement does not allow for full reconstruction of the normal remuneration. The BOSS specifies that full maintenance of remuneration neutralizes the reduction of the ceiling.

Yes, subrogated IJSS are included in the calculation of MNS. 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 CPAM (without subrogation) are excluded from the MNS appearing on the payslip, as they do not transit through the employer.

Must the mutual be maintained throughout the sick leave?

Yes, complementary social protection (mutual and provident) must be maintained throughout the duration of the suspension of the employment contract due to illness, in accordance with the provisions of the BOSS. This maintenance applies to both the employer’s and employee’s shares of contributions. Interrupting the scheme during the leave could jeopardize the collective and mandatory nature of the provision, leading to a URSSAF audit affecting all social exemption contributions.

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