Prime Macron > Prime partage de la valeur 2022!
After a long wait, countless parliamentary debates and draft laws, Prime Macron has finally been voted in for 2022 and the coming years: a new fiscally interesting opportunity in France to give employees a boost as an employer!
The purchasing power bonus (“Prime exceptionnelle pouvoir d'achat” or PEPA) has been in place for several years now and allows employers to pay an exceptional, exempt bonus to their employees under certain conditions. The law of 16/08/2022 brings an important change, in that it introduces and perpetuates a permanent value sharing bonus. In other words, there is a change of name from the Exceptional Purchasing Power Bonus (PEPA) to the Value Sharing Bonus (PPV), and in future years this law of 16 August will remain the fixed legal framework for the payment of the bonus, without a separate decree setting annual conditions.
The payment of the value sharing bonus remains optional: employers have the possibility, but are not obliged, to pay it. In addition, as expected, the basic conditions of this new PPV are similar to those of previous years, but not exactly the same:
- In theory, you can pay the new value sharing premium at the earliest as of 01/07/2022 to employees who are employed at that time with a valid employment contract and to the employees who are employed on an interim basis at that time.
- The bonus may never replace an existing wage element on the basis of the law, conventional agreements, the collective agreement or practices within the company.
- The bonus is collective and thus must be paid to all eligible employees within the company. However, it is possible to modulate the amount according to a limited number of criteria (working hours, presence, classification and salary)
- Only employees who have earned less than 3x the national minimum wage (SMIC) in the 12 months prior to the payment of the bonus are eligible to receive the premium. If the premium is paid on 01/08/2022, this wage limit is approximately EUR 57,682 gross. Please note: the SMIC increases on 1 August from 10.85 EUR gross per hour to 11.07 EUR gross per hour. For employees who fall above this ceiling, the premium is only partially exempted.
- It is possible to pay the premium spread out over the year, instead of at once. This is possible up to 4 times a year (quarterly payment).
Exemption of the premium
The law stipulates that the value sharing bonus is generally exempted from social and fiscal contributions up to EUR 3,000 per employee and per calendar year, provided that the employee thus earned less than 3 times the SMIC over the 12 months preceding the payment of the bonus (pro rata for some workers).
If the employer wishes to grant more than EUR 3,000, the excess will, in principle, be subject to contributions and taxes as usual.
However, there are still 4 exceptional cases, where the premium could reach up to 6000 EUR per employee, fully exempted before 2022:
- Companies with an " accord d'intéressement " (profit-sharing agreement), on the date of payment of the bonus or companies that conclude a profit-sharing agreement for the same financial year as the bonus payment;
- Companies with less than 50 employees and therefore no compulsory profit sharing ("participation volontaire"), but which nevertheless have a "accord de participation", or companies which conclude such a profit sharing agreement for the same financial year as that in which the bonus is paid;
- Certain associations and foundations of public benefit which are authorised to receive donations giving entitlement to tax relief;
- The so-called "ESAT" (établissements et services d'aide par le travail), for employees with a disability.
On the other hand, compared to the previous purchasing power allowance, the increased exemption is no longer accessible to employers with less than 50 employees or who are committed to measures promoting the value of so-called "second-line" workers.
Please note: from 2024 onwards, the rules regarding the PPV’s exemption from social security/taxation charges will change.
If you have any questions, our legal and payroll services are there for you!