One-time general degressive reduction (UGDR) in employer contributions

Verified 07 January 2026 - Entreprendre Public Service / Directorate of Legal and Administrative Information (Prime Minister)

The general employer contribution reduction scheme allows employers to reduce their contributions. Since 1er January 2026, the contribution relief scheme is renamed the “single general degressive reduction” (RGDU). This reduction is maximum for a remuneration at the level of Smic: titleContent (the gross monthly minimum wage is equal to €1,823.03 in 2026). For remuneration between the minimum wage and less than 3 minimum wage, the reduction is degressive. Reduction of contributions no longer applies from a remuneration equal to 3 Smic.

Please note

The reduced rates for health insurance and family allowances, which existed before the reform of the general employer contribution reductions, are being abolished.

They are maintained only for the beneficiaries of specific degressive exemptions (employers in the overseas departments and regions (‘Lodeom’), a scheme for the hiring of casual workers and job seekers in the agricultural sector (TO-DE), AADPA: titleContent and zoned exemptions - ZRD, ZFRR and ZFU).

All employers are affected.

Please note

The individual employers are excluded from this reduction.

The reduction may be applied to remuneration paid to employees holding an employment contract and for whom the employer is required to adhere to unemployment insurance. It applies to remuneration of less than 3 Smic: titleContent.

Types of contracts

The remuneration of employees who have an employment contract in a company may be eligible for a reduction in employer contributions.

All types of contracts are concerned, including part-time contracts and all types of alternating contracts.

Enrollment in unemployment insurance

The principle is that all remuneration of employees for which employers contribute à unemployment insurance are concerned.

Amount of remuneration

In order for the degressive reduction of contributions to apply, the salary must be less than 3 times the gross minimum wage.

The reduction is maximum at the minimum wage level.

Please note

Since 1er January 2026, the monthly gross minimum wage (base 35 hours per week) is set at €1,823.03.

The general degressive reduction therefore applies where wages are lower than the following amounts:

  • Gross hourly amount less than €36.06
  • Gross monthly amount less than €5,469.09
  • Gross annual amount less than €65,629.2

The amount of the reduction shall be deducted from the following contributions:

  • Social security contributions for sickness, maternity, invalidity, death and basic old-age insurance (retirement from the general scheme or the agricultural social protection scheme) 
  • Contribution to the National Housing Assistance Fund (Fnal)
  • Family Allowance Contributions
  • Contribution solidarité autonomy (CSA)
  • Employer contributions for supplementary pension schemes that are legally compulsory
  • Employer's contribution to unemployment insurance
  • Contributions for occupational accidents and diseases (the reduction may not exceed 0.49% of remuneration)

What is the basic principle?

The amount of the reduction shall be equal to the total annual gross remuneration multiplied by a coefficient.

What compensation elements are taken into account?

THEplate for the calculation, all elements of remuneration, in cash or in kind shall be included.

The following elements are taken into account: salary, bonuses, value-sharing premium (PPV), gratuities, overtime or overtime pay, time savings account (CET) pay, compensatory leave and notice, tips.

Please note

Reimbursements of professional expenses are excluded the remuneration taken into account.

How to take working time into account?

The calculation of working time shall be made in terms of annual hours as follows: [hours worked per week *52/12]

For a part-time contract, the income ceiling is reduced in proportion to the working time.

Example :

For a working time at 80%, the gross salary shall be eligible for the reduction if it is equal to 80% from €5,469.09.

How is the reduction coefficient applied to remuneration calculated?

The calculation formula depends on the size of the company and the contribution Final: titleContent to which the employer is subject.

Less than 50 employees

The amount of the reduction coefficient shall be determined by the following formula:

Coefficient = Tmin + (Tdelta × [(1/2) × (3 × SMIC calculated for one year / gross annual remuneration - 1)]P)

Where:

  • The maximum value of the coefficient is equal to the sum of the values Tminand Tdelta.
  • The values ‘Tminand ‘Tdelta” are defined as follows: Tmin = 0,0200 and Tdelta = 0,3781.
  • The "Minimum wage calculated for one year" corresponds to €21,876.40.
  • ‘Gross annual remuneration’ is the annual amount of remuneration subject to social security contributions
  • The value P is fixed at 1.75.

The result obtained by application of this formula is rounded to four decimal places, to the nearest ten thousandth.

However, the coefficient may not exceed the sum of the values Tmin and Tdelta, or 0.3981.

For remuneration between the minimum wage and less than 3 minimum wage, the reduction is degressive, with a minimum threshold, equal to 2%.

Example :

For an employee full-time (35 hours per week) and paid at the minimum wage, or €1,823.03 per month and €21,876.40 over the year

Calculation of the coefficient:

0,0200 + (0,3781 × [(1/2) × ((3 × 12,02 € × 1 820 h / 21 876,40) – 1)]1,75)

0,0200 + (0,3781 × [(1/2) × ((65 629,2 / 21 876,40) – 1]1,75)

0,0200 + (0,3781 × [(1/2) × (3 – 1)]1,75)

0,0200 + (0,3781 × [0,5 × 2]1,75)

0,0200 + (0,3781 × 1) = 0,3981

The reduction for the year will therefore be €8,708.99 (21,876.40 x 0.3981)

Example :

For an employee full-time (35 hours per week) and paid €3,500 per month (€42,000 over the year)

Calculation of the coefficient:

0,0200 + (0,3781 × [(1/2) × ((3 × 12,02 € × 1 820 h / 42 000) – 1)]1,75)

0,0200 + (0,3781 × [(1/2) × ((65 629,2 / 42 000) – 1]1,75)

0,0200 + (0,3781 × [(1/2) × (1,5626 – 1)]1,75)

0,0200 + (0,3781 × [0,5 × 0,5626]1,75)

0,0200 + (0,3781 × 0,1086) = 0,0611

The reduction for the year will therefore be €2,566.20 (42,000 x 0.0611)

The coefficient shall be distributed over the contributions paid to institutions for supplementary retirement provision (IRC), on the one hand, and on the contributions paid to the Urssaf, on the other.

The reduction coefficient on contributions to KPIs shall not exceed 6.01% (value of 0.0601).

Reminder

The rate of Final: titleContent applicable is from 0.1%. The unemployment insurance rate is 4%, with or without bonus or malus.

From 50 employees

The amount of the reduction coefficient shall be determined by the following formula:

Coefficient = Tmin + (Tdelta × [(1/2) × (3 × SMIC calculated for one year / gross annual remuneration - 1)]P)

Where:

  • The maximum value of the coefficient is equal to the sum of the values Tmin and Tdelta
  • The values ‘Tminand ‘Tdelta” are defined as follows: Tmin = 0,0200 and Tdelta = 0,3821
  • The ‘SMIC calculated for one year’ corresponds to €21,876.40
  • ‘Gross annual remuneration’ is the annual amount of remuneration subject to social security contributions
  • The value P is fixed at 1.75.

The result obtained by application of this formula is rounded to four decimal places, to the nearest ten thousandth.

However, the coefficient may not exceed the sum of the values Tmin and Tdelta, or 0.4021.

For remuneration between the minimum wage and less than 3 minimum wage, the reduction is degressive, with a minimum threshold, equal to 2%.

Example :

For an employee full-time (35 hours per week) and paid at the minimum wage, or €1,823.03 per month and €21,876.40 over the year

Calculation of the coefficient:

0,0200 + (0,3821 × [(1/2) × ((3 × 12,02 € × 1 820 h / 21 876,40) – 1)]1,75)

0,0200 + (0,3821 × [(1/2) × ((65 629,2 / 21 876,40) – 1]1,75)

0,0200 + (0,3821 × [(1/2) × (3 – 1)]1,75)

0,0200 + (0,3821 × [0,5 × 2]1,75)

0,0200 + (0,3821 × 1) = 0,4021

The reduction for the year will therefore be €8,796.50 (21,876.40 x 0.4021)

Example :

For an employee full-time (35 hours per week) and paid €3,500 per month (€42,000 over the year)

Calculation of the coefficient:

0,0200 + (0,3821 × [(1/2) × ((3 × 12,02 € × 1 820 h / 42 000) – 1)]1,75)

0,0200 + (0,3821 × [(1/2) × ((65 629,2 / 42 000) – 1]1,75)

0,0200 + (0,3821 × [(1/2) × (1,5626 – 1)]1,75)

0,0200 + (0,3821 × [0,5 × 0,5626]1,75)

0,0200 + (0,3821 × 0,1086) = 0,0615

The reduction for the year will therefore be €2,583.70 (42,000 x 0.0615)

The coefficient is then distributed over the contributions paid to the institutions for supplementary retirement provision (IRC), on the one hand, and on the contributions paid to the Urssaf, on the other.

The reduction coefficient on contributions to KPIs shall not exceed 6.01% (value of 0.0601).

Reminder

The rate of Final: titleContent applicable is from 0.5%.

The unemployment insurance rate is 4% with or without bonus or malus.

What is cumulative

The general reduction in employer contributions can be combined with the following reductions:

  • Lump-sum employer's deduction for overtime and paid rest days
  • Under certain conditions, with the exemption for home help employees
  • Reduced rates of social security contributions for professional, freelance and related journalists
  • Reduced rates of old-age insurance contributions for multi-card VRPs and medical professionals
  • Specific flat-rate deduction for business expenses

What is not cumulative

An employer may not accumulate, for the same employee, the general reduction of employer contributions withother exemptionstotal or partial employer contributions.

Finally, it cannot be combined with the application of specific rates,plates or lump sums of contributions.

Example :

This is the case for the rates specific to performing artists, which cannot be combined with the reduction.

To obtain the overall degressive reduction, a declaration via the NSN is required.

Registered Social Declaration (DSN)

You must register the employees concerned, their remuneration and the corresponding reduction in contributions.

The collection agency shall monitor the calculation of the reduction when it receives the declaration.

In the event of an audit, all information relevant to an audit shall be made available to the recovery inspectors.

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