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1. What is the value sharing bonus?
As an employer, you have the option of paying a Value sharing bonus (PPV) to your employees.
The value-sharing bonus is exempt from social security contributions and income tax under certain conditions.
The maximum PPV exemption amount cannot exceed 3,000 euros per beneficiary and per calendar year. However, the amount can be increased to 6,000 euros in case of setting up:
• a profit-sharing agreement with the obligation to set up the participation;
• an incentive agreement or a participation agreement that is not subject to the obligation to set up the participation.
To note
There is also the plan for sharing the value of the company. This new bonus is paid in addition to the PPV if the value of the company has increased during the three years following the date set by a collective agreement.
The PPV does not replace a bonus provided for by collective agreement or wage agreement, by the employment contract or by use in the company. Moreover, PPV cannot be a substitute for pay increases.
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2. Which companies can pay the value-sharing bonus?
The payment of the value-sharing bonus is open to all:
• private law employers;
• public industrial and commercial establishments (EPIC) (RATP for example);
• public administrative establishments (EPA) (France Travail for example);
• work-based support establishments and services (ESAT).
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3. Which employees are eligible for the value sharing bonus?
The value-sharing bonus can be paid to:
• employees linked to your company by an employment contract (permanent contract, fixed-term contract, apprenticeship contract or professional development contract);
• public officials under an EPIC or EPA;
• temporary workers;
• disabled workers linked to an ESAT.
Good to know
Temporary employees must benefit from the PPV in the same way as the employees of the user company.
The person receiving the PPV must be linked to your business by a contract on the date of :
• payment of the bonus;
• filing the agreement with the Departmental Directorate for Employment, Labor and Solidarity (DDETS);
• the signature of the employer's unilateral decision (DUE).
The date chosen must be mentioned in the agreement or unilateral decision.
As an employer, you can decide to pay PPV to only a portion of your staff, excluding employees whose remuneration exceeds a ceiling determined by the agreement or the DUE.
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4. How does the value-sharing bonus work?
The payment of the PPV can be provided by:
• a business agreement;
• an incentive agreement;
• a decision made by the employer.
The Social and Economic Committee (CSE) should be consulted if you opt for a unilateral decision.
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The agreement or decision must mention the fixing of the amount of the PPV, the maximum level of remuneration for eligible employees and the conditions for varying the level of the bonus according to the beneficiaries.
As an employer, you are free to choose the amount of the premium. Its amount can be adjusted according to the beneficiaries according to:
• remuneration;
• the level of classification;
• seniority;
• the length of effective presence during the past year;
• the duration of work provided for in the employment contract.
The bonus can be paid in one or several installments, without being able to exceed one payment per quarter.
You will be able to award the PPV twice a year within the limit of the total exemption limits.
Good to know
If an employee leaves your company before receiving a planned payment under the PPV, he will still benefit from the full bonus.
You will have to mention the PPV on the payslip of the employees and you will also have to file a declaration with URSSAF.
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5. What are the conditions for exemption from the value sharing bonus?
The Official Social Security Bulletin (BOSS) specified the new exemption terms applied since January 1, 2024.
This new regime will apply for bonuses paid between January 1, 2024 and December 31, 2026, including for payments made to your private employees on January 1, 2024 and December 31, 2026.
Two different regimes apply depending on the number of employees you employ.
Employers with less than 50 employees
Your employees with a salary of less than three SMIC during the 12 months preceding the payment of the bonus will benefit from a Exemption from social security contributions.
The bonus will also be exempt from income tax until December 31, 2026.
Employers with more than 50 employees
Your employees will benefit from a Exemption from social security contributions, but no CSG and CRDS.
In addition, the PPV must be allocated to an employee savings plan (PEE, PERCO, etc.) to be able to take advantage of the income tax exemption.
To note
The bonus is also not subject to payroll tax according to the Ministry of Labor.
As a reminder, if the value-sharing bonus was paid between July 1, 2022 and December 31, 2023, the PPV was exempt from income tax, employee contributions and social security contributions (including CSG and CRDS) within the limit of the authorized amounts for employees with remuneration less than three times the annual minimum wage (SMIC). Beyond that, the bonus was only exempt from employee contributions and social security contributions.
On the other hand, the social package applies to PPV under the same conditions as the amounts paid as profit-sharing.
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