Participation: from what threshold is it mandatory, and how is the reserve calculated?

Profit-sharing is mandatory in companies with at least 50 employees. This threshold is reached when the company has employed at least 50 employees per month without interruption for the past 5 years. The profit-sharing reserve is calculated using the legal formula: RSP = [½(B – 5 % C)] x [S/V]. An agreement may stipulate a different formula, provided that the result is at least equal to that of the legal formula.

This page addresses the threshold, formula, and treatment of the funds paid. It does not cover the specific limits for the special reserve, the detailed calculation of each item (profit, equity, salaries, added value) according to current guidelines, the rules for non-resident employees, or executive access to profit-sharing. These points should be verified on your individual case file.

The 50-employee threshold: how is it calculated?

According to the public service, two conditions must be met:

• the company employed at least 50 employees per month; ;
• She has done so without interruption for the past 5 years.

Once the five-year period is completed, the company must implement the profit-sharing scheme during the first fiscal year following that period. The text refers to 50 employees each month, without interruption.

For companies with fewer than 50 employees, participation remains possible: the company can implement it voluntarily.

Between 11 and 49 employees: a separate obligation

The government website describes a separate system for companies with 11 to 49 employees. If they have achieved a net taxable profit of at least 1% of their turnover for three consecutive fiscal years, they must choose a profit-sharing scheme. According to the government website's information sheet on profit-sharing, this obligation applies to fiscal years beginning on or after January 1, 2025. The choice includes a profit-sharing or incentive agreement, a matching contribution to an employee savings plan, or a profit-sharing bonus. Profit-sharing is just one of the options available to these companies.

Fewer than 50 employees: an experimental scheme

For companies with fewer than 50 employees, the government describes an experimental system, in place since December 1, 2023, for a period of five years. This system allows for a calculation formula that deviates from the legal formula, which may result in a lower figure. This deviation is only valid within this specific framework. Its precise details are not discussed here and should be verified with the government.

The legal formula

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

It is read in two parts. The first bracket starts with net profit and deducts 5 % from equity, then takes half of that. The second bracket applies the ratio between wages and value added. The higher the share of wages in value added, the higher the reserve, all other things being equal.

The exact amounts to be retained for B, C, S and V follow precise accounting and social rules. They are not taken from memory: they are calculated based on the accounts for the financial year.

Agreement formula: a floor

An agreement may stipulate a formula specific to the company. The result must be equal to or greater than that of the legal formula. This rule applies except for experimental schemes for companies with fewer than 50 employees.

After the calculation: what happens to the sums

Distribution

The reserve can be distributed equally, proportionally to salary or time spent at work, or by combining these criteria.

Individual ceiling

The amount of the profit-sharing bonus paid to each employee cannot exceed €36,045 in 2026. If the employer also pays an additional profit-sharing bonus, the total amount distributed to the same employee cannot exceed €36,045 in 2026 either (economie.gouv.fr).

When certain beneficiaries reach this limit, two scenarios arise for the excess amounts, according to economie.gouv.fr:

• if there are still sums to be distributed and not all beneficiaries have reached their limit, the distribution of excess sums is renewed over the year in question; ;
• If all beneficiaries have reached their limit, the sums remain in the special participation reserve, to be distributed to the beneficiaries of the following year.

Time limit

For a financial year ending on December 31, the last day of the 5th month is May 31.

If the employee does not respond

Funds invested in a PEE or PEI are unavailable for 5 years. In a Perco or PER company group plan, they remain unavailable until retirement, except in cases of early withdrawal.

Installation and deposit

Profit-sharing is implemented through company or industry-wide agreements with unions or the Works Council (CSE), by referendum with a two-thirds majority of employees, or by unilateral decision of the employer in the specified cases. The agreement must be filed on TéléAccords. Without filing, the company does not benefit from tax and social security exemptions. The URSSAF (French social security agency) has three months from the date of filing to process the agreement.

Social package

According to economie.gouv.fr (page dated 22/09/2026), companies with fewer than 50 employees are exempt from the social security contribution on these amounts, while those with 50 or more employees pay a social security contribution of 20% (%). The 50-employee threshold is also relevant here. A reduced rate exists under certain conditions for some payments; these conditions are not discussed here.

A new feature for 2026: 70 years and older

Since January 1, 2026, according to the BOFiP, the participation allocated to a PERECO or a PERO is no longer exempt from income tax when the holder is 70 years or older on the date of allocation.

Numerical example (fictitious profile)

Situation. A service company has employed 80 people for over five years. The fiscal year ends on December 31st. The net profit used is €600,000, equity is €1,500,000, salaries are €3,200,000, and added value is €6,400,000. These figures are assumptions.

Issue. The executive wants to know the legal shareholding structure before discussing an agreement. He doesn't know which position carries the most weight.

Strategy. The firm applies the legal formula to the company's data, then measures the effect of a change in profit, before discussing a settlement formula.

Result.

If this sum were distributed equally among the 80 employees, each would receive €1,640.63, well below the individual ceiling of €36,045 for 2026.

Same company, different net profit:

Each additional €200,000 of net profit adds €50,000 to the reserve in this example. This calculation does not take into account the specific limits of the special reserve, which are not covered on this page. This profile is fictitious: the figures illustrate the mechanism and do not predict any results for your company.

What changes depending on your situation

• Your workforce: 50 employees per month for five years without interruption, or a smaller size.
• Your situation if you have between 11 and 49 employees: net taxable profit as a percentage of turnover over three financial years.
• If you have fewer than 50 employees: the experimental derogation scheme, to be checked with the public service.
• The accounting data for the financial year: net profit, equity, wages, added value.
• The wording of your agreement, if you have one, compared to the legal wording.
• The chosen distribution method.
• The age of employees who invest their profit-sharing in a PERECO or a PERO, with regard to the 70-year age threshold.

This page does not show the amount of your reserve. It is calculated based on your accounts. No results are guaranteed.