Participation

Verified 01 January 2026 - Entreprendre Public Service / Directorate of Legal and Administrative Information (Prime Minister)

Participation is an employee savings scheme. It is a mechanism for redistributing company profits to employees. Participation is mandatory in companies that employ minimum 50 employees. She is optional for the other. We present you the applicable rules.

Participation is an employee savings scheme that allows a bonus to be distributed to employees based on benefits made by the company. Participation ensures that employees right to participate in company performance.

The overall share of profits to be redistributed to employees is called the special reserve of participation.

For each accounting year, the amount of the special participation reserve is calculated according to a formula provided for by law.

Participation is mandatory, or not, depending on the number of employees in the company.

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Companies with at least 50 employees

Participation must be mandatory in companies that have used without interruption at least 50 employees per month during the Last 5 years.

These companies must set up participation during the 1er accounting year open after the 5-year period of employment of at least 50 employees.

Companies with less than 50 employees

Companies with less than 50 employees may choose to set up the participation, if they wish.

Since 1er December 2023 and for a period of 5 years, an experimental system is set up.

It allows companies to voluntarily a participation scheme through a company or branch agreement with a formula for calculating the derogating special participation reserve (SPR) the legal formula which may lead to a lower result.

FYI  

Companies having at least 11 employees and less than 50 employees, which have achieved for three consecutive financial years a net tax profit at least equal to 1% of turnover, shall henceforth, in respect of the following financial year:

This obligation applies to financial periods beginning on or after 1er January 2025. Individual undertakings are not subject to this obligation.

The financial years 2022, 2023 and 2024 are taken into account for the assessment of compliance with the condition relating to the realization of the net tax profit.

Participation must be set up by a agreement between the company and employee representatives and, in the cases provided for by law, by a Unilateral Employer Decision (UEL).

How to draw up the participation agreement?

The situation varies depending on whether or not the company is legally obliged to set up a participation scheme:

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Company obliged to set up participation

The situation varies depending on whether or not there is an agreement between the employer and the employees:

Agreement between employer and employees

Participation shall be established by agreement between the company and the employees or their representatives.

The participation agreement may be concluded in one of the following ways:

  • Collective labor agreement or agreement concluded at professional or branch level
  • Agreement between the employer and representatives of representative trade union organizations
  • Agreement within the Social and Economic Committee (ESC) between the employer and the staff representatives
  • Draft agreement proposed by the employer and adopted by referendum by a majority of 2/3 of the employees.

The company may also use a standard format for a participation agreement which includes, point by point, the mandatory clauses to be included in a participation agreement. The choice of the calculation formula and the allocation arrangements are negotiated by the company with the employees' representatives.

Standard model for assistance in negotiating a participation agreement

Lack of agreement between employer and employees

In the absence of agreement in companies legally obliged to establish a participation regime, a mandatory regime is imposed on the company. This diet, says of authority, is set up on the initiative of the Labor Inspectorate. This scheme shall be put in place if no agreement is reached within one year of the closure of the beneficiary accounting year.

Other case

The situation varies depending on whether or not there is an agreement between the employer and the employees:

Agreement between employers and employees

Participation shall be established by agreement between the company and the employees or their representatives. The participation agreement may be concluded in one of the following ways:

  • Collective labor agreement or agreement concluded at professional or branch level
  • Agreement between the employer and representatives of representative trade union organizations
  • Agreement within the Social and Economic Committee (ESC) between the employer and the staff representatives
  • Draft agreement proposed by the employer and adopted by referendum by a majority of 2/3 of the employees.

The company may also use a standard format for a participation agreement which includes, point by point, the mandatory clauses to be included in a participation agreement. The choice of the calculation formula and the allocation arrangements are negotiated by the company with the employees' representatives.

Standard model for assistance in negotiating a participation agreement

Employer's decision

If negotiations fail, the company may decide to apply unilaterally a participation regime that complies with the legal requirements.

All participation agreements - with the exception of those set up in cooperative production businesses (Scop) - must provide for the possibility of allocating the funds resulting from the participation in an employee savings plan (PEE: titleContent, IEP: titleContent, Perco: titleContent, Pereco: titleContent…).

If the company does not have one, it must negotiate in parallel the establishment of a company Savings Plan (PEE) in order to allocate all or part of the distributed participation.

The agreement must provide for the conditions under which the employee may benefit from the amount due to him in respect of the participation:

  • Date of conclusion, entry into force and duration for which the agreement is concluded
  • Formula used as the basis for calculating the Special Participation Reserve (SPR) or, in the case of an agreement that does not use this calculation formula, an equivalence clause with the legal formula
  • Duration of unavailability of beneficiaries' rights and cases of early release
  • Conditions and time limits within which beneficiaries may request, at each allocation, the immediate availability of all or part of their participation
  • Conditions and time limits within which beneficiaries may choose the allocation(s) of the sums due to them under the participation (specifying that without an election expressed by them, half of these sums will be allocated automatically in a Perco when it has been set up in the company)
  • Methods of allocation of the reserve between beneficiaries and ceilings
  • Nature and method of managing the rights of beneficiaries.

Mandatory deposit

The company must deposit the participation agreement, the unilateral decision to participate or the unilateral document of accession on the “TeleAgreements” platform:

TeleAgreements - company Collective Agreement Filing Service

The company must also submit documents to monitor the way in which the introduction of participation has been decided.

In the absence of the deposit of the agreement, the company cannot benefit from the tax and social exemptions linked to participation.

Control

Following the deposit of the agreement and the documents on the platform “TeleAccords”, the competent service of the Ministry of Labor issues the company with a receipt and transmits the agreement and its annexes to the Urssaf.

The Urssaf has a period of 3 months from the filing to verify whether the clauses of the deposited agreement comply with the law and regulations.

If the Urssaf considers that there is a lack of documents necessary for the control, it can claim them from the company.

In this case, the period of 3 months runs from the date of receipt of the requested documents.

If, during the 3-month period, the Urssaf asks the company to withdraw or modify clauses of the agreement that it considers to be in breach of the law and regulations, the company must do so in order to benefit from the tax and social exemptions linked to the participation.

FYI  

The Urssaf cannot ask the company to modify the rules concerning the modalities of denunciation and revision of agreements.

If the Urssaf does not request any changes to the company during the 3-month period, the company may benefit from the social and tax benefits of the agreement for current or previous accounting years.

Collective information

The participation agreement is displayed unless another means of information is provided for by the agreement itself (for example, delivery of the text of the agreement to each employee).

Each year, within 6 months after the close of the exercise, one report on the follow-up of the participation agreement shall be established. It shall be subject to Social and Economic Committee (ESC), if there is one. Otherwise, it is addressed directly to each employee.

Individual information

Upon arrival in the company, the employee must receive a employee savings account which presents the various devices put in place in the company.

At each payment linked to the participation, the company must give the employee a individual sheet information, separate from the pay slip.

This sheet specifies in particular the amount of rights granted to the employee as part of the participation and the references of the institutions authorized to manage the amounts saved. In the annex, the sheet includes a note to recall the calculation and allocation rules provided for in the participation agreement. Unless the employee objects, this form can be submitted electronically.

When the employee leaves the company, he receives a summary report of all sums and securities saved or transferred. This document shall specify whether the custody account keeping are covered by the company or by a levy on assets.

FYI  

If the employee is a beneficiary of the participation agreement or could benefit from it after leaving the company, the business must continue to inform him of his rights.

The amounts paid in respect of the participation must not replace the remuneration of employees.

Amount of funds allocated to participation

Participation bonus

The amount paid in respect of the participation is the result of the profits made by the company during the the exercise has elapsed and may therefore vary from year to year.

After the end of the financial year, the company must calculate the share of profits to be distributed to employees, which is called special reserve of participation (RSP).

The company must use the legal calculation formula. Participation agreements may opt for a company-specific formula, but the outcome of the calculation must be equal to or greater than that obtained by the legal formula.

It shall take into account the following:

  • B: net profit
  • C: equity
  • S: salaries
  • V: company added value

The legal calculation formula is: RSP = [½(B – 5% C)] x [S/V].

Regardless of the formula used, the amount of the participation premium paid to each employee may not exceed a ceiling that is revalued each year according to social security benefits. For the year 2025, the individual ceiling is €36,045.

Additional participation

In the event of significant profits, the Head of company may decide to pay employees an additional contribution in respect of the last accounting year ended.

Distribution among employees

The sums paid out of the special participation reserve (RSP) are distributed among all employees of the company according to the allocation criteria laid down in the agreement.

As long as there are still sums to be distributed and all beneficiaries of the contribution have not reached their individual annual ceiling, the distribution of the excess sums must be renewed over year N.

However, if all the beneficiaries of the participation agreement have reached their individual ceiling of entitlements in year N, the excess sums must remain in the special participation reserve to be distributed to the beneficiaries of year N+1.

Participation bonus

Each beneficiary acquires a right to a share of the special participation reserve (RSP) calculated by the company.

The distribution of PSR among employees may:

  • be uniform, i.e. all employees receive the same amount,
  • be proportional to the salary or attendance time of each employee,
  • or combine several of these criteria.

Please note

Where the allocation is proportional to the salary or time spent in the company, absences relating to maternity leave, paternity and child-care leave, adoption leave, bereavement leave, an occupational disease or quarantine shall not be counted.

The amount of the premium is capped.

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Premium paid for 2026

Maximum amount of the premium: €36,045

Premium paid for 2025

Maximum amount of the premium: €35,325

Additional participation

The company may decide to pay an additional contribution.

The amount of this participation supplement is free, but the total amount distributed to the same employee may not exceed €36,045 for 2026.

Employees' rights to participate can only be known on the closing date of the the exercise, after the balance sheet has been drawn up and the annual accounts of the company have been drawn up.

The deadline for payment of the participation bonus is fixed by the last day of the 5the month which follows the end of the financial year (i.e. no later than 31 May of the following year for a financial year which ends on 31 December).

Before that date, the company may also make advances on the amount of the participation premium.

The employee has a 15-day reflection period to decide to receive or invest all or part of the sums allocated to it.

In order to respect this reflection period, in addition to the delivery of the individual form, the company must inform the employee of the amount allocated to him by sending a registered letter with acknowledgement of receipt or by a delivery against receipt.

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Payment of advance on participation

If the participation agreement so provides, the company may pay the employee quarterly advances on the annual participation bonus, after obtaining his agreement.

The employer must inform the employee of the possibility of receiving an advance on participation and of the time available to him to give his consent.

If the participation agreement does not provide for any time limit, the employee must give his response within 15 days of the date of receipt of the letter informing him of the possibility of receiving an advance.

In the event that the employee does not agree to receive an advance on his participation bonus, the company must not pay him in advance.

If the employee agrees to receive an advance on his participation bonus, the company must issue him a individual sheet, separate from the pay slip, which shall include the following elements;

  • Amount of entitlements granted as advance on participation premium
  • Deductions made for the Generalized Social Contribution (CSG) and the Social Debt Repayment Contribution (CRDS)
  • Information on the obligation of the employee to repay the overpayment to the employer, in the event that the annual contribution premium is less than the amount of the advances received, and the terms of the repayment
  • Information on the inability to request the early release of the overpayment, when it was paid into an employee savings plan
  • Information on whether an overpayment on an employee savings plan is considered a voluntary payment that is not tax deductible
  • Unavailability periods for amounts paid into an employee savings plan and exceptional early release cases authorized by law
  • Procedure for the default payment of advances on the participation premium on the collective retirement savings plan (Perco) or on the collective company retirement savings plan (collective company PER)
  • Agreement of the employee to receive the advance.

If the total of the advances paid exceeds the amount of the annual participation premium, the company is entitled to recover the overpayment by way of a payroll deduction.

Payment of the participation premium

At the time the company informs the employee of the amount of his participation bonus, the employee may ask to immediately collect the money or to place it.

Immediate payment of the premium

If the employee wishes to obtain immediate payment of the premium (in whole or in part), he must make the request within 15 days from the date on which he is informed of the amount awarded.

After that period, the company must pay him default interest.

The individual sheet, issued by the company within 6 months of the end of each financial year, indicates the amount allocated to the employee as an application to the participation agreement. This form, which is separate from the pay slip, must contain the following information:

  • Total amount of the special participation reserve for the previous financial year
  • Total amount of rights granted to the employee
  • If advances have already been paid, the amount of money already received and the amount still to be received (or the amount of overpayment to be repaid to the company)
  • Deductions made for the Generalized Social Contribution (CSG) and the Social Debt Repayment Contribution (CRDS)
  • Organization that will manage these participation rights
  • Date of availability of these sums
  • Exceptional early release cases permitted by law
  • Procedure for default payment of participation premiums on the Group Retirement Savings Plan (Perco) or the Group company Retirement Savings Plan (Group company PER)
  • Reminder note of the calculation and allocation rules provided for in the participation agreement.
Placement of the premium

The employee may request that the participation bonus be paid into an employee savings plan, (PEE: titleContent, IEP: titleContent, Perco: titleContent or Pereco: titleContent).

The sums placed on an employee savings plan will be unavailable for 5 years for the PEE and the IAP or until retirement for Perco and the Collective company RIP.

But there are early release case.

Lack of employee response

The situation varies depending on whether the participation agreement provides for the premium to be placed on an employee savings plan or not:

There's a participation agreement

If the employee does not request immediate payment or placement in a PEE: titleContent or a IEP: titleContent of the sums allocated to it, they are automatically allocated half in a Perco or in a Collective company loss if there is one in the company.

The other half shall be placed under the conditions laid down in the participation agreement.

The money invested is unavailable, but there are early release case.

There is no participation agreement

If the employee does not request immediate payment of the bonus, and if no participation agreement has been concluded in the company, the bonus is paid into a blocked current account.

In this case, the “authority scheme” applies and the premium is blocked for 8 years.

The starting point for the 8-year period is 1er day of 6e next month the exercise. For example, the 1er June 2021 for a financial year ended December 31, 2020.

But there are early release case.

Amounts received as part of the participation are exempt from employee contributions, except the CSG and the CRDS.

They are subject to income tax if they are collected immediately. If the employee places these sums on a PEE: titleContent, one IEP: titleContent, one Perco: titleContent or a collective company PER within 15 days of their payment, they benefit from a exemption of income tax within the limit of €36,045 for 2025.

Benefits

Social contributions

All companies are exempt from social security contributions on contributions paid to employees as part of the participation.

Social Package

The situation varies depending on the size of the company:

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Company with less than 50 employees

It is exempt from social package on the amounts paid in connection with the participation.

Company of 50 or more employees

She has to pay one social package from 20%on the amounts paid in connection with the participation.

However, a reduced rate of 16% applies subject to conditions payments to a Perco: titleContent or a Father: titleContent.

Contribution to vocational training and apprenticeship tax

Amounts allocated to the special participation reserve are exempt from contributions to vocational training and apprenticeship tax.

Tax benefits

Companies that set up the participation benefit from the following tax advantages:

  • Amounts paid in connection with the participation are deducted from taxable profit
  • If the company is a Scop: titleContent, the sums allocated to the special participation reserve may be subject to a provision for investment.

FAQ