Would you like to increase your employees' purchasing power while benefiting from a favourable tax and social security regime? Opt for the payment of the value sharing bonus (VSP)!
The law of 16 August 2022 on emergency measures to protect purchasing power allows employers to pay their employees a value-sharing bonus that is exempt from all social security contributions and income tax, under certain conditions.
1. The preferential social and tax regime
‌For Value Sharing Premiums (VSP) paid between 1 July 2022 and 31 December 2022
They are exempt from:
✓ from social security contributions, training contribution, apprenticeship tax and construction participation up to a limit of 3,000 euros per beneficiary and per calendar year or 6,000 euros for employers who, on the date of payment of the PPV, implement or have concluded, for the same financial year as that of the payment of the bonus, either:
a profit-sharing agreement when they are subject to participation,
a profit-sharing or incentive agreement when they are not subject to participation.
The employee is exempt from CSG-CRDS and income tax.
This favourable regime only applies to employees who received, during the 12 months preceding the payment of the PPV, a remuneration lower than 3 times the annual SMIC.
For other employees who received remuneration of more than 3 times the annual SMIC during the 12 months preceding the payment of the PPV, the bonus will only be exempt from social security contributions, subject to compliance with the aforementioned ceilings.
For value-sharing bonuses paid after 31 December 2023
The premiums will only be exempt from social security contributions within the limits indicated above.
PPVs will be subject to CSG-CRDS (9.7%) and income tax.
For companies with at least 250 employees, PPVs will also be subject to the 20% social security flat rate.
2. The employers and beneficiaries concerned
All employers under private law, self-employed workers, mutual societies, associations, trade unions, public industrial and commercial establishments (EPIC), public administrative establishments (EPA) when they employ staff under private law, may pay a PPV, regardless of the number of employees in the structure.
All employees of the company, contractual employees under public or private law, civil servants in the case of an EPIC or EPA, linked by an employment contract to the company or belonging to the public establishment, temporary workers made available to the user company, disabled workers linked to an ESAT, on the date of payment of the bonus, on the date of submission of the agreement or signature of the unilateral decision, may benefit from the PPV.
3. The modalities for the implementation of the value-sharing bonus and the modulation criteria
‌There are two ways to set up the PPV:
by company agreement concluded under the same conditions as profit-sharing agreements
-by unilateral decision of the employer after prior consultation of the social and economic committee if it exists.
The company agreement or the unilateral decision of the employer provides for the amount of the bonus, and where applicable, the maximum level of remuneration of eligible employees and the conditions for modulating the bonus.
The amount of the PPV may be the same for all beneficiaries or may be modulated according to pay, classification level, seniority in the company, the length of actual presence during the previous year or the length of time worked under the beneficiary's employment contract.
The PPV cannot replace any element of remuneration paid by the employer or made compulsory pursuant to legal, contractual or customary rules. Nor can it replace salary increases or bonuses provided for by agreement, by employment contract or by custom in force within the company.
The PPV may be paid in one or more instalments, up to a maximum of once per quarter during the calendar year.
The Employment Law Department of our law firm Clarelis Avocats is at your disposal to assist you in setting up this bonus.