Background information

The government has taken several measures in favour of overtime to make "extra" work pay, for instance by increasing the annual income tax exemption ceiling for overtime or reducing the cost for the employer. The annual income tax exemption ceiling for overtime and additional hours is raised from €5,000 to €7,500. In companies with 20 to 249 employees, a flat-rate deduction of employers' social security contributions will be introduced for overtime worked from 1 October 2022.

Content of measure

Raising the ceiling for the tax exemption of overtime

The annual income tax exemption ceiling for overtime and additional hours is raised from €5,000 to €7,500. This new ceiling, introduced on a permanent basis, applies to overtime worked from 1 January 2022.

Introduction of a favourable social contribution reduction for overtime

In companies with 20 to 249 employees, a flat-rate deduction of employers' social security contributions will be introduced for overtime worked from 1 October 2022.

In practice, the deduction will be deducted from the amount of employers' social security contributions due in respect of salary increases associated with overtime. The amount of the fixed deduction per hour of overtime is equal to €1.50. This measure complements the increase in the tax exemption ceiling for overtime hours provided for in the Amending Finance Act for 2022.

Use of measure

As it is a new measure, there is no date available.

Target groups

Workers	Businesses	Citizens
Employees in standard employment Workers in non-standard forms of employment	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Company / Companies	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Direct consultation outside a formal body	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Peak or cross-sectoral level

Involvement

No detailed information. As the representative social partners participate in the management bodies of the social security branches, they are necessarily consulted, even if it is a formality as the government has already made a decision.

Views and reactions

About all the measures adopted to increase the purchase power of workers, all the trade union organisations, and in particular the five representative trade union confederations and the organisations representing young people, denounced, in a declaration of 21 July, the legislative measures announced by the government, including the generalisation of profit sharing.

They consider 'that wages are part of the sharing of wealth' and they 'are unanimous on the fact that the priority issue must be to increase wages, pensions, minimum social benefits and student grants'. However, the trade unions denounce the fact that 'a succession of one-off measures, mainly financed by the State, cannot constitute a sufficient package to respond to the emergency'. Moreover, the trade unions and youth organisations point out that 'these exemptions and reductions in contributions are undermining our collective social protection system'.

On the employers' side, the measures presented by the government are better accepted. The criticisms are more on the modalities. The Confédération des Petites et Moyennes Entreprises / Confederation of small and medium-sized employers’ organisations (CPME) reiterated the proposal to reduce employers' charges on overtime, 'a virtuous mechanism to increase the purchasing power of the French through work without weakening the cash flow of companies already tested by the health crisis and continuing inflation'. On the subject of value sharing, the CPME expressed its concern that the payment of the Macron bonus was not immediately included in the bill. The CPME once again pleaded for profit-sharing to be individualised, in addition to the collective part.

It has to be noticed that the government has issued a « package » of measure through 2 law adopted on 16 August. Instead of creating a factsheet of the package, the national correspondent has created FS for each relevant measure. But on their side, the trade unions have published a global and common position to the whole package and not measure by measure. This is why this comment about the social partners views has the same content. 

Sources

• 16 August 2022: Loi n° 2022-1158 du 16 août 2022 portant mesures d'urgence pour la protection du pouvoir d'achat (www.legifrance.gouv.fr)
• 16 August 2022: Loi n° 2022-1157 du 16 août 2022 de finances rectificative pour 2022 (www.legifrance.gouv.fr)
• 01 December 2022: Décret n° 2022-1506 du 1er décembre 2022 relatif à la déduction forfaitaire des cotisations patronales sur les heures supplémentaires pour les entreprises d'au moins vingt et de moins de deux cent cinquante salariés (www.legifrance.gouv.fr)