Madelin pension plan for self-employed workers: coverage, deduction conditions and tax on benefits

Madelin insurance is a supplementary insurance contract that complements the mandatory coverage provided by self-employed workers. It can cover daily allowances in case of sick leave, a lump sum or annuity in case of death or permanent disability, and supplementary reimbursement of healthcare expenses. Contributions are tax-deductible up to certain limits and ceilings set based on professional income and/or the annual social security ceiling (PASS), which is €48,060 in 2026.

This page covers the principle of deduction, contract conditions, tax on benefits, and the difference from the basic regime. It does not publish the deduction limit percentages.

Who is affected?

The BOFiP (Official Bulletin of Public Finances) targets self-employed taxpayers. It specifically mentions:

• individual operators; ;
• partners in partnerships; ;
• the sole shareholder of a single-member limited liability company (EURL) not subject to corporation tax; ;
• spouses who are collaborators.

For non-commercial profits, Article 154 bis of the French General Tax Code (CGI) establishes the principle of deductibility of social security contributions for the self-employed. Other statuses, including that of a company director subject to corporation tax, are not addressed here.

What the contract can cover

The BOFiP (Official Bulletin of Public Finances) classifies the following under supplementary insurance:

• the payment of daily allowances in the event of work stoppage due to illness or maternity; ;
• a lump sum or an annuity in the event of death or permanent disability; ;
• The supplementary reimbursement of health expenses (fees, medications, dental prostheses), that is to say, benefits in kind which are added to those of the mandatory scheme.

According to the BIC doctrine, group contracts cover risks related to illness, inability to work, disability, and death, and can cover spouses and dependent children. The same texts address unemployment benefits, which take the form of replacement income, excluding a lump sum payment.

The terms of the group contract

Two conditions are derived from the BIC doctrine of the BOFiP (BOI-BIC-CHG-40-50-40-10). A deduction rule is derived from other BOFiP texts.

1. The group must have at least one thousand members engaged in a non-salaried, non-agricultural activity. A group with fewer than one thousand members is not eligible to take out this type of group contract, and the contributions paid to it are not deductible from taxable profit (§ 70). The BOFiP (French Official Tax Bulletin) allows an exception for an association initially composed of one thousand members that has fallen below this threshold, if the threshold is reached again at the end of the first year following the year in which it was not met.
2. You must be up-to-date with your contributions to mandatory schemes., at the time of joining or renewing the contract (§ 80).
3. Deduction rule: the contribution is deducted for the financial year in which it was paid., provided that it is duly justified (BOI-BIC-CHG-40-50-40-20 and BOI-BNC-BASE-40-60-50-20).

Deduction of contributions

The BOFiP (Official Bulletin of Public Finances) specifies that optional contributions, including those for supplementary health insurance and unemployment insurance, remain subject to deduction limits: certain ceilings and floors are set with reference to professional income and/or the annual social security ceiling (PASS). The PASS used is the one in effect on January 1st of the tax year. It is reduced pro rata if the fiscal year lasts less than twelve months.

The placement in the declaration and the effect on the social security contributions of the self-employed are not addressed here.

Benefits tax

• Daily allowances are subject to income tax in the same category of income as the income they replace.
• Annuities Payments made under group contracts or optional schemes as defined in Article 154 bis are taxable as pensions when they were established using contributions whose deductibility is permitted by law. Otherwise, they fall under the category of annuities acquired for valuable consideration (BOFiP, BOI-RSA-PENS-10-20-20, § 60).
• Disability pensions Self-employed individuals are taxed according to the general rules for pensions (§ 50).

Daily allowances for long-term illness and death benefits, within the specific framework of a Madelin contract, are not covered here.

And what about supplementary health insurance?

The BOFiP (Official Bulletin of Public Finances) classifies supplementary health insurance reimbursements as deductible supplementary insurance within the limits of Article 154 bis. The service-public.gouv.fr fact sheet on social protection for tradespeople and craftspeople indicates that it is generally necessary to also take out supplementary health insurance. The specific health insurance ceiling is not addressed here.

The basic scheme: what social security pays out

The amounts below are maximums indicated by the information sheets on service-public.gouv.fr.

For self-employed individuals and business owners, the information sheet indicates that compensation is calculated based on the average income of the three years preceding the work stoppage. The waiting period is not specified here; the two information sheets describe it differently. Read them before calculating compensation for a work stoppage.

Not to be confused: three meanings of the word Madelin

1. Madelin contracts described on the impots.gouv.fr page (retirement savings). The impots.gouv.fr page on the Madelin tax advantage states: "Madelin contracts have not been marketed since October 1, 2020." It describes conditions specific to a retirement savings product (fixed-term annuity, no redemption before retirement) and makes no mention of assurance-vie or health insurance: it does not allow for any conclusions regarding assurance-vie.
2. Tax reduction for subscribing to the capital of SMEs, FCPI and FIP. The BOFiP refers to it as "Madelin" in the list of overall tax benefit caps. It is not the self-employed worker's insurance.
3. The insurance contract, the subject of this page.

Numerical example (fictitious profile)

Situation. Two self-employed individuals have a 30-day paid sick leave. The first is a shopkeeper with an annual profit of €90,000. The second is a professional with an annual profit of €150,000. In both cases, the profit exceeds the income cap for the basic social security scheme. For comparison, the profit is averaged over 365 days and assumed to be equal to the income taken into account by the basic scheme (hypothetical scenario assumptions).

Issue. What proportion of daily income can the basic scheme replace, at most?

Strategy. Measure the gap between income and the maximum daily allowance of the basic scheme, before examining with the firm whether supplementary insurance is appropriate.

Result.

The calculation uses the maximums: the actual difference is at least equal to that shown in the table. It ignores the waiting period, the maximum durations (360 daily allowances over 3 years, 90 days), and the company's expenses. It uses the profit for the current year, whereas the guide for self-employed tradespeople and shopkeepers uses the average income of the 3 years preceding the work stoppage. These profiles are hypothetical. The figures illustrate the difference. They do not predict your specific situation.

What changes depending on your situation

• Your status and income category (BNC or BIC), which determine the applicable text. The conditions of the group contract come from the BIC doctrine: their application to your category is verified.
• Your income compared to the capped income of the basic scheme, your length of membership and the duration of your exercise (PASS reduced pro rata under twelve months).
• The proposed group contract : size of the group, risks covered, beneficiaries.
• Your situation regarding mandatory contributions, whether up-to-date or not.

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