The French Single Degressive General Reduction (RGDU): Calculation and URSSAF / Agirc-Arrco Allocation in 2026

What is the general reduction of employer contributions and what is its legal framework in 2026?

The réduction générale dégressive unique (RGDU) — the single degressive general reduction of employer social security contributions — is a general-law scheme codified in Articles L.241-13 and D.241-7 of the French Social Security Code. Since 1 January 2026, it has absorbed the three general reliefs that previously coexisted: the so-called “Fillon” general reduction, the reduced sickness contribution rate and the reduced family allowance rate (Article 18 of Law No. 2025-199 of 28 February 2025). It applies to annual remuneration not exceeding 3 times the SMIC (the French statutory minimum wage) — rather than the former 1.6 SMIC ceiling. Decree No. 2025-1446 of 31 December 2025 sets its parameters, notably raising the uncapped old-age contribution rate to 2.11%.

The RGDU is a major instrument of employment policy: it represents several tens of billions of euros in annual reliefs for French businesses. Mastering its technical aspects is essential for any payroll manager. For an overall view of payroll mechanisms, see our complete payroll guide.

Which employer contributions fall within the “T scope” of the general reduction?

The T scope designates all employer contributions and levies taken into account when calculating the reduction coefficient. In 2026, this scope comprises:

Sickness-maternity-invalidity-death (MMID): 13.00%, a single rate since the reduced rate was abolished on 1 January 2026;
Capped old-age contribution: 8.55%;
Uncapped old-age contribution: 2.11% since 1 January 2026, in accordance with Decree No. 2025-1446 of 31 December 2025;
Family allowances: 5.25%, a single rate since the reduced rate was abolished on 1 January 2026;
Workplace accidents / occupational illnesses (AT/MP): a flat rate of 0.49 point, and not the company’s actual rate. This point is fundamental and a frequent source of errors;
FNAL (national housing assistance fund): 0.10% (companies with fewer than 50 employees) or 0.50% (companies with 50 or more employees);
Unemployment insurance: the general-law rate without bonus-malus, i.e. 4.00%;
Autonomy solidarity contribution (CSA): 0.30%;
Legally mandatory supplementary pension: 6.01%.

Why is the AT/MP rate applied a flat 0.49 point rather than the actual rate?

The legislator chose a flat rate for calculating the general reduction in order to prevent companies with high claims records (and therefore high AT/MP rates) from benefiting from a disproportionate reduction. The flat rate of 0.49 point is set by regulation and does not vary according to the sector of activity or the company’s individual rate. This rule is expressly provided for in Article D.241-7 of the French Social Security Code. To explore the AT/MP topic further, see our AT/MP guide.

How is the unemployment insurance bonus-malus neutralised in the general reduction calculation?

Since the introduction of the bonus-malus mechanism on the employer unemployment insurance contribution (sectors concerned: accommodation and food services, agri-food, transport, etc.), the question of its interaction with the general reduction has arisen. The answer is clear: the bonus-malus is neutralised for the purposes of calculating the T coefficient. In other words, the general-law unemployment insurance rate (4.00%) is applied within the T scope, and not the modulated rate (which may vary from 3.00% to 5.05% depending on the company’s separation performance).

This neutralisation ensures equal treatment between companies for the calculation of the general reduction, regardless of their separation rate. The surplus (or reduction) in unemployment contribution linked to the bonus-malus is added to (or subtracted from) the actual unemployment contribution, but without affecting the general reduction calculation.

Which contributions are excluded from the scope of the general reduction?

Several employer contributions and levies are expressly excluded from the T scope:

CSG and CRDS: these levies are not employer contributions in the strict sense and are therefore excluded from the calculation;
Vocational training contribution: this contribution (0.55% or 1% depending on headcount) does not fall within the scope of the reduction;
Apprenticeship tax: excluded from the T scope;
Mobility levy (formerly the transport levy): excluded, even though it represents a significant charge for companies located within the area of a mobility-organising authority;
Social dialogue contribution: excluded.

This exclusion means that these employer charges remain fully payable, with no possibility of reducing them via the general reduction. The employer must take care not to include them in the calculation of coefficient C, failing which the reduction amount would be unduly increased.

How to calculate coefficient C of the general reduction step by step

The calculation of coefficient C follows a precise regulatory formula, set out in Article D.241-7 of the French Social Security Code. Here is the methodology in four steps:

Step 1: Determine the value of T

T corresponds to the sum of the eligible employer contribution rates. In 2026, for a company with 50 or more employees and an FNAL rate of 0.50%:

Sum = 13.00% (MMID) + 8.55% (capped old-age) + 2.11% (uncapped old-age) + 5.25% (family allowances) + 0.49% (AT/MP pooled portion) + 0.30% (CSA) + 6.01% (supplementary pension) + 4.00% (unemployment) + FNAL

The total amounts to 40.21% with an FNAL rate of 0.50%, and to 39.81% with an FNAL rate of 0.10%. This total corresponds to the maximum coefficient, reached at SMIC level: in the terminology of the 2026 formula, this is the sum Tmin + Tdelta (Tmin being 0.0200 in all cases).

Step 2: Calculate coefficient C

The coefficient formula is:

C = Tmin + Tdelta × [ ½ × (3 × annual SMIC ÷ annual gross remuneration − 1) ]^1.75

Coefficient C must be calculated to four decimal places, applying the rule of rounding to the nearest ten-thousandth. Coefficient C may under no circumstances exceed the maximum value Cmax = Tmin + Tdelta (0.3981 or 0.4021). If the calculation gives a higher coefficient, this ceiling is applied. Symmetrically, as long as remuneration remains below 3 SMIC, the coefficient cannot fall below the floor Tmin of 0.0200.

Step 3: Calculate the reduction amount R

The reduction amount is:

R = C × annual gross remuneration

Amount R is rounded to the nearest euro cent. In practice, the calculation is carried out month by month with a progressive or annual regularisation (the progressive regularisation method being recommended by URSSAF).

Step 4: Allocate the reduction between URSSAF and Agirc-Arrco

The single amount R must be allocated between URSSAF and Agirc-Arrco according to an allocation key set by regulation. This allocation is detailed in the following section.

How to allocate reduction R between URSSAF and Agirc-Arrco using the 2026 allocation key

The reduction R calculated above is a single amount that must be allocated to two sets of contributions: those paid to URSSAF and those paid to Agirc-Arrco. The allocation key depends on the FNAL rate applicable to the company:

Companies with an FNAL rate of 0.10% (fewer than 50 employees)

URSSAF share = R × (33.80 ÷ 39.81) ≈ R × 84.90%

Agirc-Arrco share = R − URSSAF share ≈ R × 15.10%

Companies with an FNAL rate of 0.50% (50 or more employees)

URSSAF share = R × (34.20 ÷ 40.21) ≈ R × 85.05%

Agirc-Arrco share = R − URSSAF share ≈ R × 14.95%

Rounding is carried out to the nearest cent. The difference between the two formulas is minimal, but it must be respected, failing which the collecting bodies may reject the declaration.

What are the rules on non-combination and combination of the general reduction with other schemes?

The principle of non-combination on the same risk prohibits combining the general reduction with another relief bearing on a contribution already included in the T scope. Where such a combination is possible, the employer must opt for the more favourable scheme. For example, an employer cannot combine the general reduction with a ZFU-TE exemption (urban tax-free zone) bearing on the same contributions: it must choose one or the other.

Conversely, combinations are permitted with measures bearing on contributions or levies located outside the T scope. Thus, the general reduction may be combined with:

The flat-rate employer deduction on overtime (companies with fewer than 20 employees, then those with 20 to 249 employees);
Exemptions from vocational training contributions;
Specific overseas exemptions (LODEOM), under the conditions provided for by the applicable texts.

How to report the general reduction in the DSN?

Reporting the general reduction in the DSN (the French monthly employer social declaration) follows specific codes:

CTP 668: general reduction — URSSAF share (negative amount as a deduction);
CTP 669: regularisation of the general reduction — URSSAF share;
CTP 671: general reduction — Agirc-Arrco share;
CTP 801: regularisation of the general reduction — Agirc-Arrco share.

The attachment is made to the month worked (and not the month of payment). In the case of progressive regularisation, adjustments are declared month by month using the corresponding regularisation CTPs. The employer must ensure that the amounts declared correspond exactly to the calculations performed, applying the regulatory rounding rules.

What is the complete operational sequence for calculating the general reduction?

To avoid any error, here is the sequence that must be strictly followed:

(i) Calculation of coefficient C: to 4 decimal places, verifying that C ≤ Cmax (= T);
(ii) Calculation of amount R: C × gross remuneration, rounded to the nearest euro cent;
(iii) Allocation using the key: split between the URSSAF share and the Agirc-Arrco share according to the applicable ratios;
(iv) Rounding: each share is rounded to the nearest cent. The sum of the two shares must equal amount R (with an adjustment of the residual share if necessary to avoid rounding discrepancies).

This sequence is mandatory. Any inversion (for example, allocating before rounding R) may create significant cumulative discrepancies over a full financial year, liable to trigger DSN anomalies.

What are the common errors in applying the general reduction?

URSSAF audits regularly reveal the following errors:

1. Using the actual AT/MP rate instead of the flat 0.49 point rate. This is the most costly error: it artificially increases or decreases coefficient T and therefore the reduction amount. A URSSAF reassessment may result in either direction.

2. Applying the bonus-malus unemployment rate instead of the general-law rate. The bonus-malus must be neutralised within the T scope. Only the general-law rate of 4.00% is applied.

3. Decimal-place error in the calculation of coefficient C. The coefficient must have exactly 4 decimal places. Rounding to 2 decimal places significantly distorts the calculation for remuneration close to the SMIC.

4. Failure to update parameters as of 1 January 2026. Raising the uncapped old-age rate to 2.11% changes the value of T. Payroll software must be updated accordingly.

5. Prohibited combination with an exemption bearing on the same risk. The employer must systematically check that there is no double advantage on a single risk covered by the T scope.

FAQ — Frequently asked questions on the general reduction of contributions

Does the general reduction apply to apprentices?

No. Since 1 January 2019, apprenticeship contracts have benefited from a specific exemption (Article L.6243-2 of the French Labour Code) which replaces the general reduction. Apprentices are therefore not eligible for the RGDU, but benefit from their own regime, which is at least as favourable.

How should part-time employees be treated in the reduction calculation?

For part-time employees, the SMIC used in the coefficient C formula is prorated according to the contractual working time relative to the statutory working time. For example, an employee working 80% will have the reference annual SMIC multiplied by 0.80. This proration is automatic in most payroll software.

What happens if the calculated coefficient C is negative?

Since 2026 the question arises differently: the coefficient does not become negative, but rests on the Tmin floor of 0.0200 as long as annual remuneration remains below 3 SMIC. However, as soon as remuneration reaches 3 SMIC, the employer is no longer eligible and the reduction falls to zero for the financial year. Under progressive regularisation, one month may therefore give entitlement to the reduction while another does not, with regularisation being carried out by offsetting on an annual basis.

Can the general reduction be combined with the CICE?

The CICE (competitiveness and employment tax credit) was abolished on 1 January 2019 and converted into a permanent reduction of employer contributions, in the form of a reduced sickness contribution rate. This reduced rate was itself abolished on 1 January 2026 and absorbed by the RGDU. The question of combination therefore no longer arises.

How to regularise at year-end if the progressive method was not applied?

If the employer applied the monthly calculation method without progressive regularisation, an annual regularisation must be carried out in December (or on the last payslip of the financial year). The annual reduction amount is recalculated on the basis of total annual remuneration, and the difference from the sum of the monthly reductions is applied (upwards or downwards) on the final payslip. This regularisation is reported in the DSN using CTP 669 and 801.

For any question on applying the general reduction in your company, contact our firm. We can audit your payslips and secure your calculations ahead of any URSSAF audit.