As of January 1, 2019, the hourly rate of the SMIC is raised to €10.03, or €1,521.25 gross per month. The annual social security ceiling has been raised to €40,524 per year and €3,377 per month.
Social security exemptions
Employer's health insurance rate
Employers no longer benefit from the CICE and CITS, repealed for remuneration paid from January 1, 2019. In return, since January 1, 2019, employers benefit from a rate reduction on the employer's health insurance contribution for employees.
- The employer's contribution rate will be reduced by 6 points for employees earning up to 2.5 SMIC* from January 1, 2019: i.e. an employer's contribution of 7%.
- When remuneration exceeds 2.5 SMIC, the employer's contribution employer's contribution will be calculated at the "normal" rate13%, without any reduction, on all remuneration.
* 2.5SMIC = €25.075/hr in 2019
Social and tax exemption for overtime and complementary hours
The Loi portant mesures d'urgence économiques et sociales of 12/24/2018 anticipated the exemption of overtime and complementary and overtime on January 1, 2019 (vs. 09/01/2019).
Hours concerned (non-exhaustive list) :
- Overtime worked in excess of the legal working week (35hrs or equivalent).
- Hours worked in excess of 1,607 hours per year for employees with a fixed hours agreement.
- Overtime worked by part-time employees.
- Days worked in excess of 218 days per year for employees on fixed-term work contracts.
Calculation of salary reduction
The reduction rate is set at 11.31%. The reduction in employee contributions is calculated by multiplying this rate by the remuneration for overtime or complementary hours. There is also an income tax exemption of up to €5,000 per year.PLEASE NOTE: The reduction applies to employee contributions only. Companies with fewer than 20 employees will continue to benefit from the TEPA exemption.
Elimination of certain exemptions
Exemptions for apprenticeship contracts
The exemption from employer contributions for apprenticeship contracts will be abolished in the private sector on January 1, 2019. In return, employers benefit from the Fillon contribution reduction.
As of January 1, 2019, the hourly rate of the SMIC is raised to €10.03, or €1,521.25 gross per month. The annual social security ceiling is raised to €40,524 per year and €3,377 per month.
In addition contributions due on apprentices' remuneration will be calculated on their actual remuneration (and no longer on a base reduced by 11% of the SMIC). Until December 31, 2018, apprentices were exempt from all payroll taxes. From now on, apprentices' remuneration will be exempt from all statutory and collective bargaining contributions, up to a ceiling of €1,201.79 in 2019.
PLEASE NOTE: The CSG CRDS exemption will be maintained with no limit on remuneration.
Other exemptions from employer contributions abolished on 01/01/2019
- The exemption from employer contributions applicable within a certain limit to professionalization contracts concluded with jobseekers aged 45 and over will be abolished on January 1, 2019.
- Specific exemption for intermediary associations
- Exemption for employment support contracts (by way of exception, local authorities and public-sector entities will continue to be eligible).
- Specific exemption for integration workshops (ACI) (by way of exception, public-sector employers setting up ACIs will still be entitled to this exemption).
Until 2018, the benefit resulting from the provision of free computer equipment by the employer to employees was exempt from social security contributions and income tax up to a limit of €2,000 per year and per employee. The Finance Act abolished this exemption with effect from January 1, 2019.
AGIRC/ARRCO merger
The Agirc and Arrco supplementary pension schemes merged on January 1, 2019 into a single scheme, the Agirc Arrco scheme. This merger will result in a single reference to the supplementary pension on the pay slip, which will which will no longer distinguish between T1 and T2 (between 1 and 8 PMSS), with no mention of executive or non-executive schemes.
AGFF, GMP and CET contributions will be abolished on January 1, 2019. New contributions are introduced:
- Contribution d'équilibre général (CEG): o 2.15% of salary on the band between 0 and 1 PSS o 2.70% of salary on the band between 1 and 8 PSS
- Contribution d'équilibre technique (CET) o 0.35% of salary, from the first euro up to 8 PSS, for all employees whose salary exceeds the Social Security ceiling.
Employee Savings
To encourage companies to make greater use of employee savings, the "PACTE" bill intends in particular to play on the social flat-rate tax rate with effect from January 1, 2019 :
For companies with fewer than 50 employees:
- Elimination of social security contributions on profit-sharing, incentive schemes and employer contributions to employee savings plans (PEE, PEI, PERCO, PERCO-I).
For companies with 50 to 249 employees :
- Abolition of the social security flat-rate on profit-sharing including for existing agreements, from January 1, 2019.
- The standard social security rate continues to apply to sums distributed under the profit-sharing scheme profit-sharing or matching contributions.
A few figures...
Restaurant voucher exemption limit
The employer's contribution to the acquisition of luncheon vouchers is exempt from from contributions when it is between 50% and 60% of the value of the voucher and does not exceed €5.52 for vouchers acquired in 2019.
Hiring Assistance
A single apprenticeship contract grant has been introduced for contracts signed from January 1, 2019. It is reserved for companies with fewer than 250 employees and for contracts aimed at a diploma or professional qualification equivalent to the baccalaureate at the most.
The aid is set at :
- 4,125€ maximum for the 1st year of the contract;
- 2,000€ maximum for the 2nd year of the contract;
- 1,200€ maximum for the 3rd year of the contract.
Benefit in kind food
The benefit in kind for food is increased to €4.85 per meal. In the HCR (Hotels, Cafés, Restaurants) sector, the Guaranteed Minimum is set at €3.62.
Flat-rate meal allowances
The lump-sum meal allowances exempted are revalued for 2019 as follows:
- Restaurant meal: €18.80
The employee is away on business and unable to return to his residence or usual place of work. - Catering at the workplace: €6.60
The employee is obliged to take a meal at his actual place of work, due to particular organizational conditions or work schedules: shift work, continuous work, staggered working hours, night work... - Catering outside company premises: €9.20
These are employees working on construction sites, warehouses, outside workshops, or traveling to another company site.
Minimum wage for trainees
The minimum bonus paid to interns on a placement lasting more than 2 months may not be less than €3.75 per hour.
Fixed allowance for long-distance travel in mainland France
| 2019 exemption limit in € (in €) | |||
| Type of benefits | The first 3 months | More than 3 months | Beyond 24 months |
| Restaurant meals (per meal) | 18,80 € | 16 € | 13,20 € |
| Accommodation and breakfast (per day) : Departments : Paris, Hauts de Seine, Seine-Saint Denis, Val de Marne | 67,40 € | 57,30 € | 47,20 € |
| Lodging and breakfast (per day): other departments | 50,00 € | 42,50 € | 35,00 € |
Carpooling allowance
The Finance Law has created a lump-sum car-sharing allowanceexempt from social security contributions and taxes, under the following conditions:
- Employees concerned: passengers.
- Amount of assistance: up to €200 per year. Optional coverage.
- It can be combined with the compulsory coverage of public transport season tickets or bike hire.
