We recently spoke to you about the benefits of corporate incentives. Today, we tell you all about participation, how it works, its advantages and how it is calculated.
Participation is an employee savings agreement “Providing for the redistribution to the benefit of employees of part of the profits that they have contributed, through their work, to achieve in the company. “ It is a mandatory device for all companies of 50 employees minimum. It must be in place for at least 12 months and concerns all employees. However, if your business has fewer than 50 employees, you can still choose to implement participation in the same way as other businesses.
Implementation and calculation
The participation agreement can be made in the form of a collective agreement. Otherwise, it is concluded between the entrepreneur and the unions. But also within the works council or following ratification by 2/3 of the employees. In addition, the participation agreement contains certain mandatory information listed on the model-type made available by the Ministry of the Economy and Finance and the Ministry of Labor.
The amount of participation varies each year depending on the results of the company. However, he must never « exceed 75% of the social security ceiling per year and per employee, i.e. € 30,852 in 2021 ». The calculation is therefore as follows: 1/2 [bénéfice net de l’entreprise – 5% des capitaux propres] x [salaires/valeur ajoutée de l’entreprise].
Funds and benefits
Once the sum has been defined and distributed among the employees, there are several ways of disposing of the funds. First, employees can directly benefit from the amount if they request it within 15 days of being informed of the amount. Otherwise, the funds go to the company’s investment fund or employee savings plans : PEE, PEI, PERCO, PER… In this case, the sum is blocked for 5 years.
Companies that set up participation are exempt from social contributions. In addition, the social package is abolished for companies with less than 50 employees. It can be reduced for others under certain conditions. Finally, it is possible to set up a provision for investment « equal to 50% of the sums entered in the special participation reserve ». Employees, for their part, are not taxable on this amount if they choose to block their funds. And they do not pay any social security contributions apart from the CSG and the CRDS.
To find out more about participation, meet right here.
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