The terms and conditions of payment of the exceptional bonus
What is it about ?
The premium may be for an amount greater than this limit, but only the portion up to 1,000 euros will benefit from tax and social benefits.
Let's be specific: what exemptions?
When can the premium be paid?
Time limits have been set by the legislator: the payment of the exceptional bonus must take place between December 11, 2018 and March 31, 2019.
Any bonus paid outside this period will normally be subject to tax and social security contributions.
Who are the beneficiaries?
The legislator expressly limits the benefit of the bonus “to employees bound by an employment contract on December 31, 2018 or on the date of payment, if this is earlier”.
Are thus excluded:
- Company directors not bound to the company by an employment contract;
- Employees hired after December 31, 2018 and those whose remuneration is greater than 4,495.41 euros gross.
What can the employer do?
Reserve the exceptional bonus for certain employees:
The employer can decide to pay the exceptional bonus to all employees (those who meet the legal conditions) or reserve it for those whose remuneration is below a ceiling that he has set.
It may thus, by way of illustration, decide that the exceptional bonus will be paid to those employees whose remuneration is less than 3,000 euros gross.
Adjust the amount of the exceptional bonus:
The employer can also modulate the amount of the exceptional bonus according to the beneficiaries, according to the following objective criteria: remuneration, classification level, duration of effective presence during the year 2018 or the duration of work provided for in the employment contract.
How to set up this bonus?
The exceptional bonus can be implemented in two ways:
- Either by unilateral decision of the employer:
in this case, the unilateral decision must be taken by January 31, 2019 at the latest and the employer must inform the staff representatives by March 31, 2019 at the latest.
- Either by collective company or group agreement:
in this case, the collective agreement must be concluded according to the procedures provided for profit-sharing agreements.
Can an annual bonus or another bonus be replaced by the exceptional bonus?
The legal text expressly provides that the exceptional bonus cannot replace increases in remuneration or bonuses provided for by a salary agreement, an employment contract or the practices in force in the company or, more generally, any element of compensation.
Reduction of employee social security contributions and tax exemption for overtime and additional hours
What is it about ?
As of January 1, 2019, compensation for overtime and additional hours will benefit from the following tax and social benefits:
- Said remuneration will be exempt from income tax, up to an annual limit of
5,000 euros; - It will be subject to a reduction in social security contributions, relating solely to employee social security contributions for old-age insurance and supplementary pensions.
The effective application of the reduction in social security contributions is however subject to the publication of a decree fixing, in particular, the rate of reduction which will be applied.
Let's be precise: what remuneration?
- Remuneration, including increases (at the applicable legal or conventional rates), for the following items:
- the hours worked beyond the legal weekly duration of 35 hours or, for employees who have concluded an annual flat-rate agreement in hours, the hours worked beyond 1607 hours;
- where applicable, the overtime hours deducted at the end of the reference period in the event of the implementation of a working time arrangement over a reference period longer than a week;
- for employees who fall under a fixed day package, the remuneration for the days worked beyond the said flat rate;
- overtime worked by part-time employees.
Labor law – Arst Avocats presents its news report on the law of December 24, 2018 providing for the conditions of tax and social exemptions from the so-called exceptional bonus and overtime and additional hours. Note on the exceptional bonus_00475845 Download
