One of Emmanuel Macron’s electoral promises, the tripling of the purchasing power bonus, was readjusted in the Purchasing Power bill after an opinion from the Council of State issued on Friday.
Set up in response to the Yellow Vests movement, then made permanent with the Coronavirus pandemic, the “Macron” bonus, which allowed companies to pay their employees up to 1,000 euros entirely tax-free, will increase to 3,000 euros, and to 6,000 euros in companies that have set up a profit-sharing and/or profit-sharing agreement, but under certain conditions.
A 100% tax-free bonus for employees earning less than 3 minimum wage
While initially the government proposed extending its application until the end of 2024, the Council of State suggested limiting it to a period of 17 months, considering that this tax regime must remain ” exceptional and temporary insofar as it represents a departure from the principle of equality before public charges », all employees can benefit from it at the same level without distinction of income.
To meet these constitutional requirements, the executive has therefore set up two different regimes, one temporary, the other permanent. The first – the new version Macron premium, renamed ” value sharing bonus », offers total tax exemption from the premium, but remains reserved for people earning up to less than 3 SMIC per month (i.e. less than €4,936.74 gross, at the level of the current gross monthly minimum wage of €1,645.58) and will only be applicable until December 31, 2023. Companies will also have to pay the social package on these premiums.
Reduction of social charges
The second, without time limit, and accessible to all employees regardless of their income, will not be tax exempt. Employees will have to pay social charges and tax on their payments.
But to encourage companies to pay more bonuses, they will however be exempt from paying social charges, with the exception of the “social package”: a scheme modeled on that of profit-sharing and participation, which the executive has been trying to develop for several years in small structures, for the time being, without great success.
Despite the Pacte law – which in 2019 abolished the “social package” for companies with fewer than 250 employees for the amounts paid as profit-sharing, and for those with fewer than 50 employees for those paid under the participation – employee savings in small structures remains underdeveloped. According to Dares, 4% of companies with 10 to 49 employees have set up a participation agreement, and 9.5% of them a profit-sharing.
New relaxation in sight for profit-sharing
Tax relief for premiums is a way of plugging these loopholes, even if, at the same time, the government does not intend to let go of this other lever for sharing value between companies and employees, while tensions on employment and the lack of attractiveness of certain branches is shaping up to be the great workhorse of the new school year.
The Purchasing Power Bill also provides for a relaxation of the profit-sharing system in small businesses, by allowing employers of companies with fewer than 50 employees to set it up unilaterally, if negotiations with the authorities staff representatives have failed, or that there are no such bodies.
As for the duration of profit-sharing agreements, this will be extended from three to five years to allow “acompanies to adopt a longer-term projection […] in setting their goals », Explains the text of the government.