Sick Leave & Subrogation in France: Social Security Daily Benefits, Waiting Period & Payroll

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 simultaneous mastery of the calculation of social security daily benefits (indemnités journalières de sécurité sociale — IJSS), the subrogation mechanism (whereby the employer collects the benefits directly), the employer salary top-up (maintien de salaire) (statutory or set by collective bargaining agreement), and the impacts on social 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, in particular on the reduction of the ceiling in the event of subrogation and the maintenance of supplementary social protection (protection sociale complémentaire — PSC) during the 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 — ALD): the waiting period applies only to the first leave
• Work-related accident and occupational illness: 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 bargaining agreement. Many agreements provide for a salary top-up from the 1st day of leave, thereby removing the effect of the waiting period for the employee.

Calculation of Sick Leave IJSS

Sick leave IJSS are calculated according to the following formula:

IJSS = 50% of the base daily wage (salaire journalier de base — SJB)

The base daily wage is calculated on the basis of the last 3 months of gross salary preceding the leave, within the limit of 1.4 times the monthly SMIC (French 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 monthly gross SMIC of €1,867.02 (as of 1 June 2026, on a 35-hour basis), 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.

Concrete example:

• Employee with a monthly gross 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 whereby the employer takes the place of the employee to collect the IJSS directly from the social security system. In return, the employer advances to the employee the salary top-up 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 top-up is at least equal to the amount of the IJSS over the same period

Subrogation is not mandatory, but it is very widely practised because it simplifies management 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 collects 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 collects the corresponding IJSS.

The distinction is important because 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 the management of the social security ceiling in the event of subrogation:

• If the employer maintains the remuneration in full (full subrogation with top-up), the ceiling is not reduced. The employee is treated as if working normally.
• If the employer pays only the IJSS by subrogation (without employer top-up), the ceiling is reduced pro rata to the period of absence. The subrogated IJSS are subject only to CSG/CRDS at the reduced rate.

This distinction is fundamental to the calculation of 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 collects the IJSS by subrogation (approximately €1,380)
• The SS ceiling remains at €4,005 (no reduction)
• Contributions are calculated normally on €3,500

Case 2: Subrogation of IJSS only (without supplementary top-up)

• 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 Top-Up: Statutory and Contractual Obligations

Statutory Top-Up (Monthly Payment Act)

Under Article L.1226-1 of the French Labour Code, the employer is required to top up the IJSS for employees with at least 1 year of seniority in the company. The top-up is carried out 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 per 5-year period of seniority, up to a limit of 90 days at 90% and 90 days at 66.66%.

The salary top-up is understood net of IJSS: the employer pays only the difference between the IJSS and the guaranteed level of maintenance.

Contractual Top-Up

Many collective bargaining agreements provide for terms more favourable than the law:

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

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

Numerical Example of Salary Top-Up

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
• SS waiting period: 3 days (IJSS from the 4th day)
• Salary €2,800 > ceiling of 1.4 SMIC (€2,613.83): the IJSS is capped
• Daily IJSS: €42.97 (maximum amount)
• Number of days indemnified by the SS: 25 days
• Total gross IJSS: 42.97 x 25 = €1,074.25
• Top-up 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 Contributions During Sick Leave

Treatment of Subrogated IJSS

Subrogated IJSS are not subject to standard social 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 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 cover) must be maintained throughout the duration of the suspension of the employment contract due to illness, provided the employee benefits from a salary top-up (total or partial) or IJSS.

Health insurance and provident cover contributions continue to be deducted on the payslip. The base for these contributions is generally calculated on the basis of 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. Interruption of the scheme during sick leave would jeopardise the exemptions for all staff.

Practical Management in Payroll Software

Step 1: Entering the Absence

The first step is to enter the sick leave absence into the payroll software with the precise start and end dates of the leave. 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

In the absence of a response from the CPAM (a frequent delay of 2 to 4 weeks), the employer must estimate the IJSS in order 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 the Salary Top-Up

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 reconciles 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 of Vigilance

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

• End of employer top-up: beyond the contractual maintenance duration, only the IJSS and, where applicable, provident-cover benefits are paid
• Portability of health insurance: in the event of termination of the contract, 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-related accident)
• Employer counter-examination: the employer may have the leave checked by a mandated physician

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 the IJSS during the leave period. In practice, as soon as the employer applies a salary top-up (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 (nominative social declaration).

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

In the case of therapeutic part-time work (temps partiel thérapeutique), the employee receives both a salary for the time worked and IJSS for the time not worked. The calculation of the employer top-up is based on the actual loss of remuneration. The employer compares the reconstituted remuneration (what the employee would have received on a full-time basis) with the sum of the part-time salary and the IJSS, and tops up the difference according to the guaranteed level of maintenance.

Is the social security ceiling always reduced during sick leave?

No, the ceiling is not reduced if the employer maintains the remuneration in full. The reduction of the ceiling occurs only when the employer pays solely the subrogated IJSS without a top-up, or when the top-up does not allow the total usual remuneration to be reconstituted. The BOSS specifies that full maintenance of remuneration neutralises the reduction of the ceiling.

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

Yes, the IJSS paid by subrogation are taken into account in the calculation of the MNS. They form part of the total gross remuneration within the meaning of the order of 31 January 2023. On the other hand, 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 entire sick leave?

Yes, supplementary social protection (health insurance and provident cover) 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 concerns both the employer’s share and the employee’s share of the contributions. Interruption of the scheme during the leave could jeopardise the collective and mandatory nature of the arrangement, resulting in an URSSAF reassessment covering all social exemptions on employer contributions.