French government helps companies to pay their employees « under the table »

The french government vote a key measure for HR and payroll departments, the value-sharing bonus (VSP). It perpetuates the "exceptional purchasing power bonus" from 2021, with a preferential social regime. With a max threshold of 6.000 euros, this bonus will be effective until the 31st of december 2023. Following specific circumstances, this bonus can also be exempted of personnal tax and social contributions.

Lets go deep into the understanding of this bonus.

For which companies : Any company, regardless of its size, can decide to pay a value sharing bonus (VSP). This bonus is not mandatory and can be activated according to the company's wishes.

For who : The company can grant this bonus to its employees. However, it can be decided to put a wage limit for the VSP attribution

How much : the VSP can be exempt of social contribution in case the amount does not go over 3.000 euros (6.000 euros under specific circumstances). The amount of the bonus may be modulated according to criteria such as : remuneration / level of classification / actual presence during the past year / seniority in the company.

When : The VSP can be granted starting 1st July 2022 until the 31st december 2022.

Why : This VSP is like paying the employee « under the table ». Indeed, it is not subject to any social contribution if below 3000 euros (6.000 euros if the company have a profit sharing agreement). The VSP is also not taxable for the employees for who the yearly gross paid is less than around 60.000 euros.

Point of attention : The bonus may not replace element of remuneration paid by the employer. Likewise, it cannot replace increases in remuneration or bonuses according to a wage agreement, the employment contract or the practices in force in the company.

Tobili can provide you with more information and accompany you in setting up such bonus. Feel free to contact us !