Sick Leave and Payroll Subrogation in France: A Complete 2026 Employer Guide

Introduction: sick leave and subrogation, complex but essential mechanisms

Managing sick leave in payroll is one of the most complex operations for payroll administrators. It requires simultaneously mastering the calculation of daily social security allowances (indemnités journalières de sécurité sociale, or IJSS), the mechanism of subrogation (subrogation, i.e. the employer receiving the IJSS directly), employer salary maintenance (maintien de salaire, whether statutory or provided by a collective agreement), and the impacts on social security contributions and the social security ceiling.

The BOSS (Bulletin Officiel de la Sécurité Sociale, the official social security bulletin) provides decisive clarifications on these subjects, notably on the reduction of the ceiling in the event of subrogation and the continuation of supplementary social protection (protection sociale complémentaire, or PSC) during suspension of the employment contract. This guide walks you through the complete management of a sick leave in payroll in 2026.

The waiting period and the calculation of IJSS

The 3-day waiting period

In the event of ordinary sick leave, the social security system applies a 3-day waiting period (délai de carence) during which no IJSS is paid. This period runs from the first day of leave prescribed by the doctor. IJSS are paid from the 4th day of leave.

Exceptions to the waiting period:

• Sick leave for a long-term illness (affection de longue durée, or ALD): the waiting period applies only to the first leave
• Work accident and occupational illness (accident du travail et maladie professionnelle): no waiting period, IJSS are 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 1st day of leave, thereby eliminating the effect of the waiting period for the employee.

Calculating sickness IJSS

Sickness IJSS are calculated according to the following formula:

IJSS = 50% of the basic daily wage (salaire journalier de base, or SJB)

The basic daily wage is calculated on the basis of the last 3 months of gross salary preceding the leave, up to a limit of 1.4 times the monthly SMIC (minimum wage). This ceiling was lowered from 1.8 to 1.4 SMIC by Decree No. 2025-160 of 20 February 2025, for sick leave beginning on or after 1 April 2025.

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

1,867.02 x 1.4 = €2,613.83

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

Practical 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 taken into account is capped:

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

Subrogation: the employer receives the IJSS in place of the employee

Definition and principle of subrogation

Subrogation is the mechanism by which the employer stands in for the employee to receive the IJSS directly from the social security system. In return, the employer advances to the employee the salary maintenance corresponding to the leave period.

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 (statutory, contractual, or voluntary obligation)
2. The salary maintenance is at least equal to the amount of the IJSS over the same period

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

Full subrogation vs. partial subrogation

Two situations can be distinguished:

• Full subrogation: the employer maintains the entire remuneration (100% of gross salary) and receives the IJSS as reimbursement. The employee suffers no loss of salary.
• Partial subrogation: the employer maintains only part of the remuneration (for example 90% or 66.66%) and receives the corresponding IJSS.

This distinction is important because it has consequences for 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 maintains remuneration in full (full subrogation with top-up), the ceiling is not reduced. The employee is treated as if in normal activity.
• If the employer pays only the IJSS through subrogation (without an employer top-up), the ceiling is reduced on a pro rata basis for the absence period. The subrogated IJSS are subject only 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 us take 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
• It receives the IJSS through 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 the IJSS alone (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: statutory and contractual obligations

Statutory maintenance (the monthly payment law, loi de mensualisation)

Under Article L.1226-1 of the French Labour Code, the employer is required to top up the IJSS for employees who can demonstrate at least 1 year of seniority in the company. The maintenance is provided as follows:

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

These durations are increased by 10 days for each 5-year period of seniority, up to a limit of 90 days at 90% and 90 days at 66.66%.

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

Contractual maintenance

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

• Maintenance at 100% from the 1st day of leave (without a waiting period)
• Longer maintenance durations
• Reduced seniority conditions (6 months, or even no condition)

It is essential to check the applicable collective agreement to determine the exact level of maintenance. Where the agreement contains more favourable provisions, these prevail over the statutory scheme.

Worked example of salary maintenance

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

• Calendar days of leave: 28 days
• Social security waiting period: 3 days (IJSS from the 4th day)
• Salary €2,800 > 1.4 SMIC ceiling (€2,613.83): the IJSS is capped
• Daily IJSS: €42.97 (maximum amount)
• Number of days indemnified by social security: 25 days
• Total gross IJSS: 42.97 x 25 = €1,074.25
• Maintenance at 90%: 2,800 x 90% = €2,520
• Employer top-up: 2,520 – 1,074.25 = €1,445.75

The payslip will show: the subrogated IJSS (€1,074.25), the employer top-up (€1,445.75), for a reconstituted gross amount of €2,520.

Social security contributions during sick leave

Treatment of subrogated IJSS

Subrogated IJSS are not subject to standard social security contributions. They are subject only 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 the IJSS is 100% of the amount of the IJSS (no 1.75% allowance).

Treatment of the employer top-up

The salary top-up paid by the employer is subject to all social security contributions under ordinary law conditions (employee and employer contributions). It falls within the contribution base in the same way as activity salary.

Supplementary social protection (PSC) during sick leave

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

Health insurance and provident scheme contributions continue to be deducted on the payslip. The base for these contributions is generally calculated on the reconstituted remuneration (what the employee would have received had they worked).

This maintenance is a condition of the mandatory and collective nature of the scheme, which is necessary to benefit from the social exemption on employer contributions. Interrupting the scheme during sick leave would jeopardise the exemptions for the entire workforce.

Practical management in payroll software

Step 1: Recording the absence

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

• The deduction for absence (working days, business days, or calendar days method depending on configuration)
• The waiting period
• The indemnified days

Step 2: Estimating and entering the IJSS

Pending the response from the CPAM (frequently taking 2 to 4 weeks), the employer must estimate the IJSS to prepare the payslip. Payroll software includes an estimation calculation engine. An adjustment will be made upon receipt of the CPAM’s final statement.

Step 3: Calculating salary maintenance

The software applies the maintenance rules (statutory or contractual) and calculates the employer top-up by deducting the IJSS (estimated or actual) from the guaranteed amount.

Step 4: Adjustment

Upon receipt of the CPAM’s final statement, the payroll administrator adjusts any discrepancies between the estimate and the actual amount of the IJSS. This adjustment may take place on a subsequent payslip.

Long-term leave: points requiring vigilance

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

• End of employer maintenance: beyond the contractual maintenance period, only the IJSS and possibly provident scheme benefits are paid
• Health insurance portability: in the event of contract termination, the employee benefits from portability for 12 months
• Return-to-work medical examination: mandatory after leave of more than 60 days (non-occupational illness) or 30 days (work accident)
• Employer counter-examination: the employer may 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 salary at a level at least equal to the IJSS during the leave period. In practice, once the employer applies salary maintenance (statutory or contractual), it is in its interest to set up subrogation in order to recover the IJSS directly from the CPAM rather than have them pass through the employee. The subrogation request is made via the DSN (the nominative social declaration).

How is the employer top-up calculated when the employee is on a therapeutic part-time arrangement?

In the event of a therapeutic part-time arrangement (temps partiel thérapeutique), the employee receives both a salary for the time worked and IJSS for the time not worked. The employer top-up is calculated on the basis of the actual loss of remuneration. The employer compares the reconstituted remuneration (what the employee would have received full-time) with the sum of the part-time salary and the IJSS, and tops up 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 maintains remuneration in full. The ceiling reduction applies only when the employer pays solely the subrogated IJSS without a top-up, or when the top-up does not allow the usual total remuneration to be reconstituted. The BOSS specifies that maintaining full remuneration neutralises the ceiling reduction.

Do subrogated IJSS fall within the base of the net social amount (montant net social, or MNS)?

Yes, IJSS paid through subrogation are taken into account in the calculation of the MNS. They form part of total gross remuneration within the meaning of the decree of 31 January 2023. In contrast, 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 health insurance be maintained throughout the sick leave?

Yes, supplementary social protection (health insurance and provident coverage) must be maintained throughout the period of suspension of the employment contract due to illness, in accordance with the provisions of the BOSS. This maintenance concerns both the employer’s share and the employee’s share of contributions. Interrupting the scheme during the leave could jeopardise the collective and mandatory nature of the arrangement, leading to a URSSAF reassessment covering all social exemptions on employer contributions.