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France 2020: Renewal of the “Exceptional Bonus” on Purchasing Power

As we kick-start 2020, legislative updates across the globe are coming to light. At Immedis, we’re here to keep you up to date and remain compliant.

Substantial updates have been made available for France so if your organisation has payroll operations in the region,  then the following legislative information should be taken in to account.

 

Renewal of the “Exceptional Bonus” on Purchasing Power (prime sur le pouvoir d’achat)

This exceptional bonus is renewed for 2020 but with new prerequisites. Exceptional bonuses paid by the employer are exempt from income tax and any social contribution or contribution, up to a maximum of 1000 euros per beneficiary, under the following conditions:

• The bonus benefits employees whose compensation is less than 3 SMIC (over the 12 months preceding its payment)
• It is paid before June 30, 2020
• It does not replace any element of remuneration
• For employees with an employment contract on 31 December 2019 (an employee who joined the company in January 2020 will not be entitled to receive this bonus)

The new condition is that the company must conclude a profit-sharing agreement before 30 June 2020 in order to benefit from the exemption from social security contributions and taxes on this bonus. As in the previous year, the company will have to make a unilateral decision. At this date, there are no further details and we are awaiting the decrees. We therefore advise to wait for an additional communication if you attend to be paying this allowance.

 

DOETH – Declaration of workers with disabilities

This declaration, which was previously made by companies with more than 20 employees in paper format, will now be processed via the DSN (Declaration submitted every month and which is used for the declaration and payment of social security contributions and the payment of withholding tax).

 

A – Concerns all companies regardless of their workforce

From 2020 onwards, the declaration will be made through the DSN.

Here are the changes:

• Act No. 2018-771 on the freedom to choose one’s professional future simplifies the declaration of companies linked to the obligation to employ disabled workers (OETH), by integrating this formality into the DSN and transferring it to the URSSAF network.

Internago briefing – 2019-12-17

• As of the January 2020 employment period, all companies, regardless of their workforce, will have to declare their employees’ status as disabled workers on a monthly basis via the DSN.

This is why it was important to communicate employees who are affected by this before Dec 31, 2019 in order to update your payroll provider. NB: Companies with less than 20 employees do not pay taxes.

 

B – Tax payment for companies with more than 20 employees

For the year 2020, companies with 20 or more employees will be subject to the obligation to declare and, where applicable, pay an annual contribution to the URSSAF, which will be included in the DSN at the beginning of 2021.

This contribution will be due if the company does not employ a minimum of 6% of disabled workers among its workforce. The number of disabled workers will be calculated and notified by the URSSAF, based on the status of disabled employees declared in 2020. In order for this calculation to be carried out as accurately as possible, it is essential that companies anticipate the monthly declaration of the status of their disabled workers as early as January 2020.

This is why, for all companies with more than 20 employees, we suggest you contact your payroll provider to discuss how to act upon this new obligation.

NB: For the 2019 declaration no change, it will be made on the paper declaration

 

Rate changes 

The Social Security ceiling increases from €3377 per month to €3428 per month

Internago briefing – 2019-12-17

Scale of withholding tax: The withholding tax scale will be revalued by 1% in 2020 to take inflation into account.

 

Internship bonus

The revaluation of the social security ceiling for 2020 entails the revaluation of the bonus paid to trainees carrying out an internship of more than 2 months in the company. Unless there is a collective agreement or branch agreement providing for a more favourable amount, this bonus corresponds to 15% of the hourly social security ceiling (which is in this case €26 for 2020), i.e. €26 x 15% = €3.90 per hour (it was €3.75 in 2019). It is 2 consecutive months, or non-consecutive if the internship is carried out during the same school or university year. This rule also applies to internships of 2 months or less that give rise to voluntary gratification by the host organization. It should be noted that, within the limit of 15% of the hourly social security ceiling, the hours paid to trainees are not subject to contributions or to CSG/CRDS. On the other hand, the excess fraction is subject to the FNAL, the autonomy solidarity contribution and, where applicable, the transport payment.

 

Notification of occupational accident rate

As of 1 January 2020, there will no longer be any notification of occupational accident rates. It is expected that we will be able to download them ourselves but more information on this expected to be released.

 

To keep up to date with other legislative updates from across the globe, why not take  a look at some of our recent blogs.