Expatriation bonus: exemptions and limits

The expatriation bonus is exempt from income tax for its actual amount, for the duration of the expatriate scheme. Three safeguards govern this exemption: the remuneration that remains taxable must be at least equal to that of similar positions in France, the total exemption is capped (50% of the total remuneration or 20% of the portion related to the foreign period, chosen annually), and combining it with the seconded employee scheme is prohibited.

This page follows the BOFiP BOI-RSA-GEO-40-10-20, version in effect since August 11, 2025, and the administration's page updated on April 8, 2026. The conditions for entering the scheme are on the page dedicated to Article 155 B. The flat-rate option of 30 % has its own page. A recent finance law may have amended the text: this should be verified at the source.

What the premium covers

The bonus is a supplement to remuneration, in cash or in kind, linked to work performed in France. Only supplements directly related to expatriation are exempt; other elements of the contract are not. The exemption applies to the bonus amount, subject to the reference salary. The variable portion is taxed in the year it is paid.

Two ways to set the premium

The actual amount. When a bonus is fixed at a specific amount, it must be clearly stated in the employment or corporate mandate contract, or in an addendum concluded before the employee takes up their duties in France. The BOFiP (Official Bulletin of Public Finances) also allows for a bonus determined by objective criteria in the contract: accommodation provided, or a percentage of remuneration; the precise basis for calculating this percentage is detailed in paragraph 70 of the BOFiP.

For a fixed price. As an option, the bonus is deemed to be equal to 30% of the remuneration, even if the contract does not stipulate it. The BOFiP (paragraph 90) refers to "total net remuneration," while the administration's webpage uses two formulations ("total remuneration" in one section, "taxable net remuneration" in another): the calculation basis should be verified with official sources, and this webpage does not include any. According to the BOFiP, this option is available whether or not the bonus is stipulated in the contract, particularly for employees recruited directly from abroad; for employees recruited by a foreign company, it depends on the start date (paragraphs 80 and 102), and the BOFiP excludes profit-sharing, stock options, and free shares from the calculation basis (paragraph 100). Details of this option are available on the dedicated webpage.

First limitation: the reference remuneration

The taxable income of an expatriate employee must be at least equal to that of similar positions within the same company or, failing that, within similar companies in France. Otherwise, the difference is added back to taxable income. The reference period is the calendar year in which the position was assumed. The comparison is based on net annual taxable income, excluding employee savings plans. The employee may substantiate this requirement by any means, including a certificate from the employer. This also applies in the case of a flat-rate tax option.

The BOFiP (French Official Tax Bulletin) allows for certain exceptions: a reference salary based on an employee with comparable experience in a similar company, or the lowest salary of that employee over the previous year or three years. For a fixed bonus, the comparison may be limited to the year of employment. This latter exception does not apply to a bonus calculated as a percentage of base salary, nor to the flat-rate option. The employer must provide proof of the methodology and keep supporting documentation available; otherwise, the exceptions do not apply.

Example from the BOFiP. An executive seconded by an American company receives €200,000 net, including a bonus of €60,000. His salary excluding the bonus is €140,000. If the benchmark in France is €140,000 or less, the €60,000 bonus is exempt from social security contributions. If it is €150,000, the exemption is limited to €50,000.

Second exemption: the portion related to activity abroad

The scheme also exempts the portion of remuneration corresponding to work performed abroad, provided the stays are undertaken in the direct and exclusive interest of the company. Regular business trips are included, even those lasting less than 24 hours. The BOFiP (Official Bulletin of Public Finances) clarifies that this is a matter of fact. The practical rule is to compare days worked abroad to days actually worked, excluding travel time. Justification can be provided by any means (paragraph 250).

Two ceilings, to choose from each year

The taxpayer chooses each year and indicates their choice in the tax return. Expense allowances exempt under paragraph 1 of Article 81 of the French General Tax Code (CGI) and employee savings plans are not included in total remuneration.

The BOFiP (French Official Tax Bulletin) provides two examples. In the first, a salary of €220,000 includes a bonus of €130,000 and €30,000 for work abroad, with a reference amount of €100,000. Ten thousand euros are added back, and the tax-exempt bonus falls to €120,000. The overall limit is €110,000; the 20 % limit gives €120,000 + €20,000 = €140,000, which is more favorable. In the second example, €140,000, including €50,000 for work abroad, without a bonus under the contract: the BOFiP calculates the 30 % allowance at €42,000, reduced to €40,000 after adding back €2,000. The overall limit is €70,000, while the limit for 20 % amounts to €60,000: the overall limit is more advantageous. The best choice therefore depends on the figures for each year.

Not cumulative with the scheme for posted workers

An expatriate posted abroad cannot combine this tax regime with that of paragraph II of Article 81 A of the French General Tax Code (CGI). They must choose this option no later than with their overall tax return for the year they take up their duties or the first year of application. This choice is irrevocable.

Declarations and duration

The exempt amount counts towards the reference tax income. The scheme applies automatically, without approval. The exemption lasts until December 31st of the eighth year following the start of employment; beyond that date, the remuneration, including the bonus, is subject to standard tax rules. For the employer, the bonus is exempt from payroll tax up to the amount exempt from income tax.

Bonus of €80,000 and two caps: numerical example (fictitious profile)

Situation. Elise, a fictional CFO, is hired by a French company with a total net salary of €180,000. Her contract includes an expatriation bonus of €80,000, and part of her work is performed abroad, amounting to €35,000 in tax-exempt expenses. The benchmark salary for similar positions is €110,000.

Issue. Which exemption should be chosen, and which ceiling should be selected?

Strategy. Apply the BOFiP rule: first test the reference remuneration, then compare the two ceilings.

Result.

Option 2 is more favorable by €2,000. The remaining taxable income, before the standard deduction of 10% (%) or actual expenses, is €88,000. The mechanics follow those of the examples in the BOFiP. The profile and its amounts are fictitious.

What changes depending on your premium situation

• The method of fixing: actual amount stated in the contract, objective criteria or fixed amount.
• The reference salary for your position, and the method used by the employer.
• The portion of your business that is conducted abroad.
• The figure for each year, which can change the most favorable ceiling.
• A secondment abroad by your employer.
• The date you took up your duties and the remaining duration of the scheme.

The rule depends on your situation. No results are guaranteed.