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Employee contributions: principle and characteristics

Employee contributions: definition

Employee contributions refer to social security contributions payable by employees. They are deducted by employers from the gross salary of their employees and are then paid to collection organizations such as Urssaf. Employee contributions, like employer contributions, are used to finance social benefits such as:

  • health insurance,
  • unemployment insurance,
  • retirement pensions,
  • family allowances,
  • housing allowances,
  • social minima,
  • workers’ compensation benefits.

The employee contributions are part of the social charges with the employers’ charges. An employee’s net salary is equal to his gross salary plus paid vacation allowances, bonuses and overtime less employee contributions. Employee contributions include social security contributions paid to Urssaf, social security contributions paid to Urssaf, unemployment contributions paid to Urssaf, supplementary pension contributions paid to pension and provident organisations.

To note: the unemployment insurance employee contribution has been abolished since 1 October 2018.

Employee contributions: social security contributions

Social security contributions include health, maternity, death and disability insurance contributions and old-age insurance.

The rate and base of social security contributions are as follows:

  • Uncapped old-age insurance (retirement from the general scheme): the amount of the contribution is 0.40% of the amount of the salary.
  • Capped old-age insurance (retirement from the general scheme): the amount of the contribution is 6.90% of the amount of the salary up to 3,428 euros per month.

Employee contributions: social contributions

Social security contributions include the CSG (generalized social contribution) which is partly deductible from taxable income up to 6.80% and the CRDS (contribution to the repayment of the social debt) which is not deductible from taxable income.

The rate and basis of social security contributions are as follows:

  • The general social contribution (CSG): the amount of the contribution is 9.20% calculated on 98.25% of the gross salary within the limit of 164,544 euros and on 100% beyond this amount.
  • Contribution to the repayment of social debt (CRDS): the amount of the contribution is 0.50% calculated on 98.25% of the gross salary within the limit of 164,544 euros and on 100% beyond this amount.

Employee contributions: supplementary pension contributions

Supplementary pension contributions are paid to pension and provident organizations and include the Agirc-Arcco contribution, the general balance contribution and the technical balance contribution.

The rate and basis of supplementary pension contributions are as follows:

  • Agirc-Arrco: the amount of the contribution is 3.15% of the salary up to 3,438 euros per month and 8.64% of the salary between 3,428 euros and 27,424 euros per month.
  • The generalized equilibrium contribution (CEG): the amount of the contribution is 0.86% of the salary up to 3,428 euros per month, 1.08% of the salary between 3,428 euros and 27,424 euros per month.
  • The technical equilibrium contribution (CET): the amount of the contribution is 0.14% of the salary between 3,428 euros and 27,424 euros per month.

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