Profit-sharing: agreement, 2026 limits and taxation

Profit-sharing is generally optional. It is based on an agreement concluded for a period of 1 to 5 years, filed on the TéléAccords platform. In 2026, the total bonuses cannot exceed 20% of the total gross salaries paid, and the amount received by an employee cannot exceed €36,045.

For the employee, the bonus is exempt from income tax if it is invested in an eligible plan within 15 days, up to the limit set. It remains subject to CSG and CRDS social security contributions.

This page does not deal with participation, details of savings plans, CSG and CRDS rates, nor the case of non-resident employees.

Implementing profit-sharing: the agreement

Who can sign?

A company whose sole employee is also the president, CEO, manager, or board member cannot sign a profit-sharing agreement. Otherwise, profit-sharing is implemented by agreement or, in some cases, by a unilateral decision of the employer (DUE).

The three ways to reach an agreement

• A collective agreement, with representative trade union organisations or within the social and economic committee (CSE).
• A ratification by a two-thirds majority of the staff of a draft agreement proposed by the employer.
• A unilateral decision, This procedure is reserved for certain companies with fewer than 50 employees. There must be no approved sectoral agreement in place. Furthermore, the company must have neither a union representative nor a works council (CSE), or have failed in its negotiations, which implies a record of disagreement. The works council (CSE) must be consulted at least 15 days before the application is filed.

Duration and renewal

The agreement is concluded for a period of between one and five years. It may provide for tacit renewal, for a period equal to the initial term, if neither party requests renegotiation within three months prior to the expiry date. This tacit renewal may occur multiple times.

The important deadline: the 7th month

The agreement must be concluded before the first day of the seventh month following its effective date. For an agreement that takes effect on January 1st, it must therefore be concluded before July 1st.

Furthermore, according to service-public.gouv.fr, profit-sharing bonuses are treated as salary, without exemption. The same information sheet specifies that an agreement concluded or filed after the deadline remains valid, but that social security and tax exemptions are only granted for calculation periods following the filing date.

Filing and control

The agreement, or unilateral decision, must be filed on the Ministry of Labor's TéléAccords platform. Filing is a prerequisite for receiving exemptions. The Urssaf (French social security agency) may request the withdrawal or modification of clauses that violate the law within a specified timeframe from the date of filing. The two official websites consulted do not indicate the same timeframe: this should be verified on service-public.gouv.fr and economie.gouv.fr.

What the agreement must contain

According to economie.gouv.fr, Articles L. 3313-1 and L. 3313-2 of the French Labor Code define its content. In particular, it specifies the calculation method and the allocation criteria.

• The profit-sharing scheme necessarily has a collective character.
• The formula is linked to the company's results or performance. The calculation period is expressed as a whole number of months, with a minimum of three months.
• For an agreement lasting more than one year, a review clause can reassess the objectives.
• The distribution can be uniform, proportional to salary or time spent at work, or a combination of these criteria.
• A minimum service requirement may be imposed, up to a maximum of three months.

The 2026 ceilings

If the bonus calculated according to the agreement is less than the annual limit, the company may pay a supplementary profit-sharing payment. The amount of this supplement is at the company's discretion, but the total, including the bonus, must not exceed the individual limit. Non-salaried managers can benefit from profit-sharing in companies with 1 to 249 employees. Their unpaid spouses and civil partners can also benefit when the agreement so provides.

The individual income tax exemption ceiling was €35,325 in 2025. The BOFiP specifies that the PASS used is that of the year in which the sums were received.

What the employee does with their bonus

The employee has 15 days from the date of notification of the bonus amount to request immediate payment. If no request is made, the bonus is automatically placed in a company savings plan (PEE) if one exists; otherwise, it is placed in an inter-company savings plan (PEI) or a group savings plan (PEG). The funds are paid or invested no later than the last day of the fifth month following the close of the fiscal year, i.e., May 31st for a fiscal year ending December 31st.

The invested funds are unavailable: for a minimum of 5 years for a PEE or PEI, and until retirement for a PERCO, PERECO, or PERO. Early withdrawal is permitted in certain cases, such as marriage or the birth of a third child.

Taxation

For tax exemption, the BOFiP (Official Bulletin of Public Finances) sets three conditions: investment within a maximum of fifteen days of receipt, filing of the agreement, and the unavailability of the funds. According to the BOFiP, amounts received immediately are "taxable under the standard rules." According to service-public.gouv.fr, amounts received in 2025 must be declared in 2026.

What will change in 2026

• Individual ceiling: €36,045 in 2026, compared to €35,325 in 2025.
• No more exemptions from age 70 on a PERECO or a PERO. According to the BOFiP (BOI-RSA-ES-10-10, version of 10/08/2026), the exemption no longer applies to sums allocated to a PERECO or PERO when the holder is 70 years of age or older on the date of allocation. This measure applies from 1 January 2026.
• Companies with 11 to 49 employees, experimental obligation: According to service-public.gouv.fr, this is a five-year pilot program, not a permanent rule. Companies that have generated a net taxable profit of at least 1% of their turnover for three consecutive fiscal years must choose a profit-sharing scheme. This includes profit-sharing, employee share ownership, matching contributions, and profit-sharing bonuses. The information sheet indicates that the obligation applies to "fiscal years beginning on or after January 1, 2025." Sole proprietorships are not subject to this obligation.

Numerical example (fictitious profile)

Situation. A service company (SAS) has 40 employees and pays €2,000,000 in gross salaries annually. It enters into a profit-sharing agreement that takes effect on January 1, 2027. Applying the formula results in total bonuses of €240,000, distributed equally. Each employee therefore receives €6,000.

Issue. Three controls are applied: the maximum limits, the signing deadline, and the employee's choice. A bonus received directly is taxable. A bonus invested within 15 days is not.

Strategy. The firm is reviewing with the manager the signing schedule, the ceilings and the information given to employees.

Result.

An employee contributes €5,000 to their company savings plan (PEE) within 15 days and requests an immediate withdrawal of €1,000. The €5,000 is exempt from income tax, representing 83.3% of their bonus. The €1,000 is declared with their salary. Social security contributions remain due on the entire amount. The French tax authority (BOFiP) provides the same mechanism: €25,000 received, €20,000 allocated to a PEE, €5,000 taxed, excluding CSG and CRDS contributions.

The example uses the 2026 ceiling. For a bonus received in 2027, the ceiling will be that of 2027. This profile is hypothetical. The figures illustrate the mechanism and do not predict the outcome for your specific situation.

What changes depending on your situation

• Company size: unilateral decision possible for companies with only 50 employees, social security contribution based on the threshold of 250 employees, experimental obligation to share value between 11 and 49 employees.
• Your status: employee, non-salaried manager or unpaid spouse, with different ceilings.
• The effective date and the date of signature of the agreement.
• Each employee's choice: immediate payment or investment, and the chosen plan.
• The age of the holder, for sums allocated to a PERECO or a PERO.
• Your tax residence. This page does not deal with the case of a non-resident employee: this is verified on the file.

This page does not show the amount of your bonus or the resulting tax savings. No results are guaranteed.