Since summer 2024, the French government has experienced a degree of instability, resulting in the failure to vote on the 2025 budget.
This situation has led to some uncertainties regarding various temporary social and tax schemes that were announced to be abolished but were finally renewed by the legislator at the last minute.
This article is an opportunity to review the most important changes for your employees and your company.
- luncheon vouchers
The “France’s purchasing power” law of 2022 opened the possibility for employees benefiting from luncheon vouchers to use them to do their grocery shopping in food shops without limiting their use to directly consumable food preparations.
This measure was only due to apply until 31 December 2024 and, as it was not renewed in a new budget law, its end was announced.
The legislator finally intervened at the beginning of 2025 to approve the continuation of this derogation until 31 December 2026.
- Subscription to public transport or public bicycle services
For the years 2022 to 2024, the public authorities had allowed employers to increase the coverage of their employees’ public transport or public bicycle rental costs to 75%, with the same social security and tax rules applying to the optional portion (from 50% to 75%) as to the mandatory 50%.
This possibility has just been renewed for 2025!
Therefore, the reimbursement by employers of employees’ season tickets for public transport services or public bicycles is still exempt from social security contributions and tax up to a limit of 75% of the cost of the season ticket.
Please note that for employees working in the ILE DE FRANCE (Paris region) area, the price of the Navigo public transportation pass has been increased for 2025. The annual rates are set as follows:
All zones: €976.80
Zones 2-3: €910.80
Zones 3-4: €886.60
Zones 4-5: €864.60
- Value-sharing scheme
As a reminder, for financial years beginning on or after January 1st, 2025, companies with at least 11 employees that are not obliged to set up a profit-sharing bonus (i.e. mainly companies with between 11 and 50 employees) will be required to set up a value-sharing scheme as soon as they achieve a net taxable profit equal to at least 1% of turnover for 3 consecutive financial years – please, refer to our newsletter “Value-sharing in small and medium-sized businesses with regular profits : A new obligation under a French experimental scheme”.
Among the profit-sharing schemes that can be set up are:
- voluntary profit-sharing bonus (called in French “participation”);
- non-mandatory profit-sharing plan (called in French “intéressement”);
- employer “matching” contributions to a “PEE”, “PEI”, “Perco” or “PERECO” plan, i.e. company savings / retirement schemes.
- the distribution of a value-sharing bonus (“PPV” French Scheme).
Regarding the value-sharing bonuses granted by employers to eligible employees, they are unconditionally exempt from social security contributions up to a limit of €3,000 per employee per calendar year.
This cap is raised to €6,000 in companies with at least 50 employees implementing a non-mandatory profit-sharing plan and in companies with fewer than 50 employees implementing a non-mandatory profit-sharing plan and/or a voluntary profit-sharing bonus.
The value-sharing bonuses are also exempt from all the other social charges and income tax under the following cumulative conditions:
- Bonuses are paid between January 1st, 2024, and December 31st, 2026;
- They are paid to employees receiving a gross salary of less than 3 times the minimum wage (i.e. currently < € 5,405.50 per month);
- The company has less than 50
Finally, please note that if the value-sharing bonuses are allocated to a company savings / retirement scheme, they are exempt from income tax within the respective caps of €3,000 or €6,000.
Should you have any questions, please do not hesitate to contact us.