New Exemption Threshold for Apprenticeship Contributions in France from March 2025

Introduction: A Major Reform of the Social Regime for Apprenticeships

The social regime governing apprenticeships in France will experience a significant transformation with the implementation of a new contribution exemption threshold set at 50% of the minimum wage (SMIC) from March 1, 2025. This measure, outlined in the Social Security Financing Law for 2025 (LFSS 2025) and specified in a subsequent decree, fundamentally alters the calculation of apprenticeship costs for companies and directly affects the pay Slips of apprentices.

For payroll managers, human resources officials, and accountants, this reform necessitates an immediate update of payroll parameters and a thorough understanding of the new applicable rules. This article provides a detailed analysis of the changes, their practical implications on pay slips, and key points for ensuring compliant remuneration processing for apprentices.

1. Recap of the Previous Regime: Exemption at 79% of the SMIC

1.1 Historical Principle of Wage Exemption

Before March 1, 2025, apprentices benefitted from a total exemption from social contributions, including the General Social Contribution (CSG) and the Social Debt Repayment Contribution (CRDS), on the portion of their remuneration not exceeding 79% of the gross monthly SMIC. This threshold, set by Article L. 6243-2 of the Labour Code in its previous wording, aimed to ensure that apprentices received a net remuneration as close as possible to their gross remuneration.

Specifically, for a gross monthly SMIC of €1,801.80 as of January 1, 2025 (based on 35 hours), the exemption threshold was established at €1,801.80 × 79% = €1,423.42. Nearly all apprentices received remuneration below this threshold, resulting in a full exemption covering their remuneration in the vast majority of cases.

1.2 A Particularly Favourable Regime

This exemption regime at 79% of the SMIC benefited from simplicity: for most apprentices, gross and net pay were equivalent (excluding mandatory complementary health insurance where applicable). Only older apprentices (aged 26 and over, earning 100% of the SMIC or the minimum standard salary) or those in their third year of apprenticeship could see their remuneration exceed the threshold and thus be subject to contributions on the excess portion.

2. The New Regime: Lowering the Threshold to 50% of the SMIC

2.1 Effective Date of March 1, 2025

The LFSS 2025 amended Article L. 6243-2 of the Labour Code to lower the exemption threshold for social contributions from 79% to 50% of the gross monthly SMIC. The application decree published in the Official Journal has established the effective date as March 1, 2025.

Thus, the new threshold is €1,801.80 × 50% = €900.90 (based on the SMIC as of January 1, 2025). This threshold applies monthly and must be prorated in cases of part-time work, absence, or incomplete months.

2.2 Implications of the Reduction

The reduction of the threshold directly results in a significantly broader base subject to CSG and CRDS for apprentices. Indeed, beyond 50% of the SMIC, the apprentice’s remuneration is now subject to the following deductions:

• CSG at a rate of 9.20% (of which 6.80% is deductible and 2.40% is non-deductible);
• CRDS at a rate of 0.50% (non-deductible).

The total deductions thus amount to 9.70% on the portion of remuneration exceeding 50% of the SMIC. The CSG/CRDS base is calculated on 98.25% of remuneration (after applying a 1.75% professional expense deduction), subject to a limit of four annual social security ceilings.

2.3 Other Employee Contributions

It is important to clarify that the exemption from employee contributions (for health insurance, old-age pensions, and unemployment) remains applicable up to 50% of the SMIC. Beyond this threshold, the general employee contributions become theoretically applicable. However, in practice, it is primarily the CSG and CRDS that represent the most significant impact for apprentices, with other employee contributions typically remaining limited in most remuneration configurations.

3. Impact on the Apprentices’ Remuneration Structure

3.1 Overview of the Legal Remuneration Grid

The minimum remuneration for apprentices is set as a percentage of the SMIC (or the minimum standard salary if it is more favourable) according to the apprentice’s age and year of contract execution. The grid applicable in 2025 is as follows:

Apprentices aged 16-17:

• 1st year: 27% of the SMIC (€486.49)
• 2nd year: 39% of the SMIC (€702.70)
• 3rd year: 55% of the SMIC (€990.99)

Apprentices aged 18-20:

• 1st year: 43% of the SMIC (€774.77)
• 2nd year: 51% of the SMIC (€918.92)
• 3rd year: 67% of the SMIC (€1,207.21)

Apprentices aged 21-25:

• 1st year: 53% of the SMIC (€954.95)
• 2nd year: 61% of the SMIC (€1,099.10)
• 3rd year: 78% of the SMIC (€1,405.40)

Apprentices aged 26 and over:

• All years: 100% of the SMIC (€1,801.80)

3.2 Identification of Affected Apprentices

With the new threshold set at 50% of the SMIC (€900.90), apprentices whose remuneration exceeds this amount will now be subject to CSG/CRDS on the excess portion. The following apprentices are directly impacted:

• 16-17 year-olds in their 3rd year (55% of the SMIC = €990.99);
• 18-20 year-olds from the 2nd year (51% of the SMIC = €918.92);
• 21-25 year-olds from the 1st year (53% of the SMIC = €954.95);
• Apprentices aged 26 and over (100% of the SMIC = €1,801.80).

Conversely, 16-17 year-olds in their 1st year (27% = €486.49) and 2nd year (39% = €702.70), as well as 18-20 year-olds in their 1st year (43% = €774.77), remain completely exempt as their remuneration is below 50% of the SMIC.

4. Concrete Impact on Pay Slips

4.1 Numerical Example: 21-Year-Old Apprentice in 2nd Year

Consider an example of a 21-year-old apprentice in their 2nd year, earning 61% of the SMIC, i.e. €1,099.10 gross monthly.

Before March 1, 2025 (threshold at 79% of the SMIC = €1,423.42):

• Gross remuneration: €1,099.10
• Remuneration below the 79% threshold → total exemption
• Net to pay: €1,099.10

Since March 1, 2025 (threshold at 50% of the SMIC = €900.90):

• Gross remuneration: €1,099.10
• Exempt portion: €900.90
• Portion subject to CSG/CRDS: €1,099.10 – €900.90 = €198.20
• CSG/CRDS base (after 1.75% deduction): €198.20 × 98.25% = €194.73
• CSG: €194.73 × 9.20% = €17.92
• CRDS: €194.73 × 0.50% = €0.97
• Total deducted: €18.89
• Net to pay: €1,080.21

The net loss for the apprentice amounts to €18.89 per month, or approximately €227 per year.

4.2 Numerical Example: Apprentice Aged 26 and Over

For an apprentice aged 26 and over, earning 100% of the SMIC, i.e., €1,801.80 gross monthly, the impact is much more significant:

• Subject portion: €1,801.80 – €900.90 = €900.90
• CSG/CRDS base: €900.90 × 98.25% = €885.13
• CSG + CRDS: €885.13 × 9.70% = €85.86
• Monthly net loss: €85.86, or around €1,030 per year.

This impact is far from negligible for older apprentices and represents a major consideration for HR departments when informing potential apprentices.

5. Employer Contributions: The General Reduction Applicable

5.1 Common Law Calculations

From the employer’s perspective, the contributions on the remuneration of apprentices are subject to the common law regime. The general reduction of employer contributions (known as the “Fillon reduction”) is applicable under the same conditions as for other employees. The reduction coefficient is calculated based on the ratio of annual gross remuneration to the annual SMIC, according to the usual formula.

5.2 Impact on the Total Cost of Apprenticeships

The general reduction allows for a significant reduction in the employer’s apprenticeship costs, particularly for apprentices whose remuneration is close to the SMIC. The calculation of the reduction coefficient takes into account the actual remuneration of the apprentice (rather than a reconstructed remuneration), resulting in a high coefficient for lower-paid apprentices.

For companies with fewer than 50 employees, the maximum coefficient for the general reduction reaches 0.3194 (2025 value), leading to a substantial reduction in employer contributions. For companies with 50 employees or more, the maximum coefficient is 0.3234 (including the FNAL contribution at the higher rate).

6. Recruitment Aid for Apprentices in 2025

6.1 Maintenance of the €6,000 Hiring Aid

The hiring aid for apprentices, set at €6,000 for the first year of the contract, is maintained in 2025. This aid is paid monthly (€500 per month for 12 months) and applies to all apprenticeship contracts signed between January 1 and December 31, 2025, regardless of the size of the company or level of diploma prepared.

6.2 Eligibility Conditions

To benefit from the aid, the employer must:

• Conclude an apprenticeship contract between January 1 and December 31, 2025;
• Submit the contract to the skill operator (OPCO) within the regulatory deadlines;
• Provide the monthly DSN allowing automatic payment of the aid by the ASP (the Payment Service Agency).

The aid is cumulative with the social contribution exemptions applicable to apprentices. It helps cover a significant portion of the salary cost of the apprentice in the first year, making apprenticeships financially attractive despite the reform of the exemption threshold.

7. Specific Cases for the Public Sector

7.1 Specific Exemption Maintained

Employers in the public non-industrial and non-commercial sectors benefit from a specific exemption regime for apprentices, distinct from the common law regime. This regime, provided for in Article L. 6227-8-1 of the Labour Code, includes a total exemption from employer contributions (excluding additional retirement contributions of the public service) and is maintained unchanged by the LFSS 2025.

7.2 Coordination with the New Threshold

The lowering of the employee contribution exemption threshold to 50% of the SMIC also applies to apprentices in the public sector. However, the specific regime for employer contribution exemptions remains unchanged, thus retaining an advantage for public sector employers compared to common law.

8. DSN Impacts

8.1 Declaration of Employee Contributions

Implementing the new threshold requires adjustments to DSN parameters. Payroll software publishers have had to update calculation rules to differentiate between the exempt portion (up to 50% of the SMIC) and the portion subject to deductions (beyond 50% of the SMIC). Specific personnel type codes (CTP) for apprentices must be correctly reported to avoid any declaration anomalies.

8.2 Key Considerations

Payroll managers must be particularly vigilant about the following points:

• The prorated threshold in case of an incomplete month (hiring or leaving during the month);
• The prorated threshold for part-time work;
• Management of the transitional period (before and after March 1, 2025 within the same month of March);
• Correct allocation of CTPs on the contribution blocks in DSN;
• Verification of the applied CSG/CRDS rates (9.20% + 0.50% on the base after deduction).

9. Impact Analysis: A Paradigm Shift for the Attractiveness of Apprenticeships?

9.1 A Net Cost Increase for the Apprentice

The lowering of the exemption threshold represents a decrease in purchasing power for apprentices whose remuneration exceeds 50% of the SMIC. While the impact is modest for younger and less experienced apprentices, it can be significant for apprentices aged 26 and over, for whom the net loss exceeds €1,000 per year.

9.2 A Political Signal to Monitor

This measure is situated within a context of searching for revenue to fund social security. It reflects a desire to rationalise social exemptions by targeting them more specifically at the most vulnerable populations. Employer organizations and professional branches have expressed concerns regarding the potential impact on the use of apprenticeships, particularly for adult populations undergoing professional retraining.

9.3 Maintaining the €6,000 Aid as a Counterbalance

The maintenance of the €6,000 hiring aid in 2025 represents an important compensatory factor for employers. This aid, combined with the general reduction of employer contributions, allows for the sustained overall attractiveness of the net employment cost of apprentices, despite the increase in gross cost arising from the new employee contributions regime.

FAQ – Frequently Asked Questions on the New Apprenticeship Exemption Threshold

Does the new 50% threshold apply to ongoing contracts or only to new contracts?

The new 50% SMIC threshold applies to all ongoing apprenticeship contracts as of March 1, 2025, not just to contracts signed after that date. This is a modification to the applicable social regime by right, regardless of the contract conclusion date. Payroll managers must therefore update the processing of all apprentice pay slips from March 2025 onwards.

How do we manage payroll for March 2025, straddling the old and new regimes?

For March 2025, two methods are viable: either a prorated application (applying the old threshold from February 1 to February 28, then the new threshold starting March 1), or the application of the new threshold for the entire month of March. The BOSS and ministerial instructions recommend applying the new threshold for the entire month of March 2025 for simplification reasons. It is advisable to refer to your payroll software provider’s guidelines.

Is the specific exemption for employer contributions for apprentices changed?

No, the reform exclusively concerns the exemption threshold for employee contributions. The regime for employer contributions remains unchanged: the general reduction of employer contributions (Fillon reduction) continues to apply under the same modalities as before. Employers will continue to benefit from significant relief on apprentice remuneration charges.

What impact does this have on the apprentices’ mandatory health insurance?

The employee contribution to mandatory complementary health insurance is not modified by the reform of the exemption threshold. The employee portion of health insurance contributions remains payable under the same conditions as before. However, apprentices whose employee contribution to health insurance exceeds 10% of their gross remuneration may request an exemption from enrollment. This option remains unchanged and may be particularly relevant for younger apprentices with lower remuneration.

Is the €6,000 hiring aid affected by this reform?

No, the €6,000 hiring aid for apprentices is completely independent of the regime of employee contributions. It remains in place for 2025 for all apprenticeship contracts, regardless of the size of the company or the diploma level. The payment of the aid remains executed monthly by the ASP, based on the data transmitted in the DSN by the employer.