The end of the social fxied fee for SMEs

By Arnaud Campion

This is a EUR 440 million gift to business. Incorporated into the Pacte law and effective from January 1, 2019, the end of the social package for companies with fewer than 250 employees is intended to encourage the bosses of VSEs and SMEs to enter into profit-sharing agreements with their employees.


Why remove the social package?


Many employees could see their purchasing power increase over the next few years thanks to the new measure announced by the government at theinterview with the President of the Republic in TF1's "13 heures".

Today, only 16% of companies with less than 50 employees, and 22% of companies with between 50 and 250 employees (i.e. slightly less than one employee in two), have a profit-sharing agreement. And with good reason: the social security lump-sum payment taxes 20% of the sums distributed by employers. Emmanuel Macron's measure should therefore potentially encourage 1.2 million French companies to better distribute bonuses to employees.


The social package: quite a story


Created in 2009 by Nicolas Sarkozy, the specific contribution (commonly known as the "forfait social") has evolved regularly since its creation, with the rate rising from 2% to 20% today. It taxes the sums paid by the employer in respect of profit-sharing and incentive schemes, including any supplements paid.

Intended to bail out the health insurance fund for salaried workers, the social package did not, however, achieve its objectives: its massive increase of 20% on 1 August 2012 brought less than expected to the Social Security. The additional revenues, which were supposed to generate 2.3 billion euros in 2013, nevertheless amounted to only 600 million euros under the Ayrault government.


How is this new government measure coming along?


Namely For companies with more than 49 employees, since profit-sharing is already compulsory, only profit-sharing agreements will be affected by the end of the social package.

On the other hand, in companies with fewer than 50 employees, profit-sharing and incentive schemes are concerned.

Company savings plans are unfortunately not subject to this measure and retain social packages of 8% for very small businesses and 20% for those with more than 50 employees.

Welcomed by the employers' organisations, the end of the social package consists in redistributing the company's profits to the employees with a zero-load profit-sharing scheme. This is practically the equivalent of a thirteenth month for the French who benefit from these agreements. According to the Confederation of Small and Medium-sized Enterprises (CPME), this measure is a "formidable tool for employee motivation, involvement and loyalty".

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