Exceptional purchasing power bonus : how can your employees benefit from it in 2020?

The system allowing you to pay your employees an exceptional bonus, exempt from income tax and social security contributions, is being extended in 2020. However, the conditions for using it are changing!

We will explain how to make your employees benefit from this exceptional bonus.

I- Exceptional bonus purchasing power : what are the advantages for the employer and the employee?

Up to an amount of €1,000, the exceptional purchasing power bonus is exempt:

  • income tax

  • Of employee and employer contributions

  • Social security contributions (CSG and CRDS).

It is also excluded from the resources taken into account for the calculation of the activity bonus and for the allocation of the disabled adult allowance.

II- Exceptional purchasing power bonus : what are the conditions for benefiting from the scheme?

This exemption scheme is subject to several conditions :

- Be the subject of a company agreement or a unilateral decision by the employer, who must then inform the social and economic committee.

- The monthly remuneration of the beneficiary employee must be less, during the 12 months preceding the payment of the bonus, than 3 times the amount of the minimum wage (Smic)

- The premium must be paid before 30 June 2020

- The premium may not replace an increase in remuneration or a premium provided for in a wage agreement, an employment contract or customary practice in the undertaking

If the premium is paid to only some of the undertaking's employees, only employees whose remuneration exceeds a ceiling freely fixedby the employer or by an agreement within the undertaking may be excluded from receiving the premium

- The company must have a profit-sharing agreement in place by the date of payment of the bonus. Exceptionally, profit-sharing agreements concluded between 1 January and 30 June 2020 may be concluded for a minimum period of 1 year instead of 3 years.

If you want know more about the profit-sharing agreement, feel free to contact our chartered-accountant, we will be happy to help you set it up in your company.

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