Taxing Wages 2018

France

Abstract

This chapter includes data on the income taxes paid by workers, their social security contributions, the family benefits they receive in the form of cash transfers as well as the social security contributions and payroll taxes paid by their employers. Results reported include the marginal and average tax burden for eight different family types.

Methodological information is available for personal income tax systems, compulsory social security contributions to schemes operated within the government sector, universal cash transfers as well as recent changes in the tax/benefit system. The methodology also includes the parameter values and tax equations underlying the data.

 

 

The national currency is the Euro (EUR). In 2017, EUR 0.89 equalled USD 1. In that year, the average worker earned EUR 38 582 (Secretariat estimate).

1. Personal income tax system

1.1. Tax levied by the central government on 2017 income

1.1.1. Tax unit

The tax unit is aggregate family income, but children over 18 are included only if their parents claim them as dependants. Other persons may be fiscally attached on certain conditions: unlike spouses, who are always taxed jointly, children over 18 and other members of the household may opt to be taxed separately. Beginning with the taxation of 2004 income, the law provides for joint taxation of partners in a French civil union (pacte civil de solidarité, or PACS), as soon as the PACS is signed. Reporting obligations for “PACSed” partners are similar to those of married couples.

Earned income is reported net of compulsory employer and employee payroll deductions, except for 2.4 percentage points worth of CSG (contribution sociale généralisée) and the 0.5% CRDS (contribution pour le remboursement de la dette sociale), which are not deductible from the income tax base.

1.1.2. Tax reliefs and tax credits

1.1.2.1. Standard tax reliefs

• Work-related expenses, corresponding to actual amounts or a standard allowance of 10% of net pay (with a minimum of EUR 430 and a ceiling of EUR 12 305 per earner).

• Family status: The “family quotient” (quotient familial) system takes a taxpayer’s marital status and family responsibilities into account. It involves dividing net taxable income into a certain number of shares [two shares for a married (or “PACSed”) couple, one share for a single person, one half-share for each dependent child, an additional share for the third and each subsequent dependent child, an additional half-share for single parent, and so on]: the total tax due is equal to the amount of tax corresponding to one share multiplied by the total number of shares. The tax benefit for a half-share is limited, however, to EUR 1 527 per half-share in excess of two shares for a couple, or one share for a single person, except for the first two half-shares granted for the first child of a single parent, in which case the maximum benefit is EUR 3 602.

1.1.2.2. Main non-standard reliefs available to the average worker

Certain expenditures to improve or maintain the taxpayer’s primary residence, including outlays for heat insulation or heating adjustments, major capital expenditures and money spent to equip a home to produce energy from a renewable source (30% tax credits, subject to a multi-year maximum); compensatory allowances in case of divorce if paid in a lump sum (25% reduction, capped at EUR 30 500); child care costs for children under seven (50% reduction, up to annual expenditure of EUR 2 300); dependent children attending secondary school or in higher education; donations to charities or other organisations assisting those in needs; trade union dues, etc. The exemption of the employer’s participation to the collective contracts of supplementary health cover is abolished in the budget act for 2014 (i.e. income earned in 2013).

1.1.3. Tax schedule

 

	Fraction of taxable income (1 share, in Euros)	Rate (in %)
1st bracket	Up to 9 807	0
2nd bracket	From 9 807 to 27 086	14
3rd bracket	From 27 086 to 72 617	30
4th bracket	From 72 617 to 153 783	41
5th bracket	From 153 783	45

A special rebate for taxpayers with a low tax liability is applied to the amount of tax resulting from the above schedule before reductions and tax credits. To be eligible, the tax on the household’s income must be less than EUR 1 569 for single households and less than 2 585 for the couples. The rebate is equal to the three-quarter of the difference between this ceiling and the amount of tax before the rebate.

A special tax reduction has been established for the 2018 income tax. The reduction rate is 20% of the tax liable if the household income is less than EUR 18 685 (doubled for couples, plus EUR 3 737 for each dependent person) and it decreases linearly until zero for households whose income equals to EUR 20 705 (doubled for couples, plus EUR 3 737 for each dependent person).

If the final tax is less than EUR 61, no tax is payable.

1.1.4. Exceptional contribution on high revenues

An exceptional contribution on high revenues is based on the reference taxable income (“revenu fiscal de référence”). The tax rates are 3% from EUR 250 000 to EUR 500 0000 (single person), 4% over EUR 500 0000 (single person), 3% from EUR 500 000 to EUR 1 000 000 (married couple or civil union) and 4% over EUR 1 000 000 (married couple or civil unions).

1.2. Taxes levied by decentralised authorities

Local taxes levied on working households are:

• Residency tax (taxe d’habitation), which is set by local authorities;

• Property taxes on developed and undeveloped land;

• There are common rules for each type of tax, to which certain municipalities make certain adjustments.

These local taxes, the rates of which vary widely, depending on the municipality, are not assessed here.

1.3. Universal social contribution (contribution sociale généralisée, or CSG)

The universal social contribution (CSG) was introduced on 1 February 1991. Since 1 January 1998, the rate of CSG has been 7.5%. This rate has been applied to a base of 98.25% as of 1 January 2012. The CSG is deductible against taxable income, but at a lower rate of 5.1%.

1.4. Contribution to the reimbursement of social debt (contribution au remboursement de la dette sociale, or CRDS)

The contribution to the reimbursement of social debt has been in effect since 1 February 1997. Like the universal social contribution, its base has passed to 98.25% of gross pay as of 1 January 2012. The rate is set at 0.5%. Unlike social security contributions, CRDS payments are not deductible from taxable income.

2. Compulsory social security contributions to schemes operated within the government sector

Some contributions are levied on a capped portion of monthly earnings. Since 1997, this ceiling has been adjusted once a year on 1 January. In January 2016, the ceiling was EUR 3 269 (or EUR 39 228 per year).

2.1. Employee contributions

2.1.1. Pension

• 6.9% on earnings up to the ceiling (6.9% in 2016).

• 0.4% on total earnings (0.35% in 2016).

2.1.2. Illness, pregnancy, disability, death

• 0.75% on total earnings.

2.1.3. Unemployment

• 2.4% on earnings up to 4 times the ceiling.

2.1.4. Others

• Supplemental pension1 for non-managers: minimum 3.1% up to the ceiling and 8.1% between one and three times the ceiling; for managers, 3.10 % up to the ceiling and 7.80% between one and four times the ceiling.2

• The AGFF (Association pour la gestion du fonds de financement) contribution replaces ASF (Association pour la gestion de la structure financière), which had previously been included in “unemployment” levies. The rate of this contribution is, for non-managerial workers,0.8% of earnings up to the social security ceiling plus 0.9% of any income in excess of the ceiling but not exceeding triple the amount of the ceiling ; for managerial workers, its rate is 0.8% up to the social security ceiling plus 0.9% from one to eight times the ceiling. In the table, this is combined with the rate for supplemental pensions.

2.2. Employer contributions

2.2.1. Pensions

8.55% (8.55% in 2016) of gross pay, up to the ceiling, plus a 1.90% (1.85% in 2016) levy on total pay.

2.2.2. Illness, pregnancy, disability, death

12.89% of total earnings.

An additional contribution of 0.3% (contribution de solidarité autonomie – (CSA) is levied on total salary.

2.2.3. Unemployment

4% of earnings (4.5%, 5.5% or 7% for some temporary contracts), up to four times the ceiling; in addition, 0.20% (0.25% in 2016) up to four times the ceiling to endow the salary guarantee fund (AGS).

2.2.4. Work-related accidents

Contribution rates for work-related accidents vary by line of business and are published annually in the official gazette (Journal officiel de la République française). In 2017, the average rate is 2.32%.

2.2.5. Family allowances

5.25% of total pay. The rate has been reduced to 3.45% up to 1.6 times the minimum wage from 2015 with the responsibility pact, up to 3.5 times the minimum wage from April 2016.

2.2.6. Others

• Supplemental pension: for non-managers, 4.65% up to the ceiling and 12.15% between one and three times the ceiling; for managers, 4.65% up to the ceiling and 12.75% between one and four times the ceiling.

• The AGFF contribution is 1.2% for non-managers or managers up to the ceiling, 1.3% for non-managers between one and three times the ceiling and 1.3% for managers between one and eight times the ceiling. In the table, this is combined with the rates for supplemental pensions.

• Others (construction, housing, apprenticeship, further training): 2.66% of pay (for enterprises with more than 20 employees). The transport tax is not included because it varies geographically. Contributions to finance a fund dedicated to workers exposed to distressing work conditions (“Fonds Pénibilité”) vary with the levels of exposure of each worker and are therefore not included.

2.2.7. Reduction of employer-paid social insurance contributions

Act No. 2003-47 of 17 January 2003 on salaries, working time and the development of employment (the “Fillon Act”) amended how the reduction of contributions is calculated.

As a result, since 1 July 2005 the maximum reduction has been 26% (in companies with more than 20 employees) for a worker paid the minimum wage. It then declines gradually to zero at 160% of the annual minimum wage. It applies irrespective of the number of hours worked. Since 2016 the maximum reduction has been increased up to 28.49% (28.42% in 2016) for companies with more than 20 employees, and up to 28.09 % (28.02% in 2016) for companies with less than 20 employees.

The Budget Act for 2007 (Article 41 V) bolsters this measure for very small enterprises with effect from 1 July 2007. For employers with between 1 and 19 employees, the maximum deduction was raised to 28.1% at the minimum wage, declining gradually – here too – to zero at 160% of the minimum wage.

In 1 January 2011 the “Fillon act” was modified and included an annualized calculation of the general tax reliefs of employer contributions. For part-time wage-earners, the relief is computed using an equivalent full-time salary and is then adjusted proportionally to the number of hours paid.

From 2015, the Responsibility Pact (Phase 1) includes new reductions of the labour cost: total exemption of all URSSAF employer contributions on the minimum wage (except unemployment contributions); reduction of 1.8 point on employer-paid contributions for family allowance (3.45% instead of 5.25% for salary up to 1.6 times the minimum wage, and up to 3.5 times from April 2016).

The gross annual minimum wage (for 1 820 hours) in 2015 was an estimated EUR 17 763.20.

2.2.8. Competitive tax credit (CICE – Crédit d’impôt pour la compétitivité et l’emploi)

As for 2015, the competitive tax credit (CICE – Crédit d’impôt pour la compétitivité et l’emploi) will benefit all businesses, regardless of their legal status or economic sector, that employ salaried workers and be liable for either corporation tax or income tax, based on actual profits.

The CICE is based on all wages paid to salaried employees in a given calendar year up to 2.5 times the minimum wage (without taking into account any overtime or additional hours worked). For part-time employees and seasonal workers, the minimum wage corresponding to the working hours stipulated in the contract shall be taken into account.

The rate of the tax credit shall be 7% for wages paid in 2017.

3. Universal cash transfers

3.1. Main minimum social benefits

The RSA (revenue de solidarité active) is the minimum income benefit. However, the eight family types studied here earn too high an income to benefit from this benefit.

3.2. Main family benefits (in respect of dependent children)

• Family allowances: monthly base for family allowances (BMAF) = EUR 407.84 as of 1 April 2016. The family allowances are subject to revenue conditions since 1 July 2015:

• Up to 67 408 (+5 617 per child after the second child), the rate is 32% for two children and 41% per additional child. An extra amount of 16% of the BMAF is reversed if the child is over 14 (the extra amount is not incorporated into the model).

• Between 67 408 (+5 617 per child after the second child) and 89 847 (+5 617 per child after the second child), the above rates are divided by 2.

• Beyond 89 847 (+5 617 per child after the second child), the above rates are divided by 4.

• ASF (Allocation de soutien familial): extra child benefit for isolated parent EUR 110.20 (EUR 105.27 in 2016) per child per month (27.02% of the BMAF).

• ARS (Allocation de Rentrée Scolaire): The amount payable depends on the age of the child to reflect needs. The allowance is payable to families or persons with children aged 6 to 18 attending school, and whose income is below a certain level (not incorporated into the model).

 

Age of the child	Percentage of the BMAF in 2016
6-10 years	89.72%
11-14 years	94.67%
15-18 years	97.95%

• Family supplement (Complément Familial): 41.65% of the BMAF. Subject to revenue ceilings, this is paid to families as of the third child. An extra amount (EUR 67.68/month) is reversed for families whose incomes are below the poverty line (not incorporated into the model).

• Early childhood benefit (not incorporated in the model) known as PAJE (Prestation d’Accueil du Jeune Enfant): subject to revenue ceilings. It includes:

  • A birth grant of 229.75% of the BMAF (EUR 923.08 after deduction of the CRDS) received at the 7th month of pregnancy.

  • A benefit (“allocation de base”) of 45.95% of the BMAF (EUR 183.7 after deduction of the CRDS (or EUR 91.8 depending on revenue) a month from the birth of the child until three years of age.

• The CRDS is levied on family allowances at a rate of 0.5% (no deduction). The allowances mentioned above are after deduction of the CRDS for the benefits expressed in EUR.

3.3. Housing benefits

The housing benefits are not included in the model.

3.4. In-work benefit

The November 2014 Supplementary Budget Act eliminated the earned income tax credit (Prime pour l’emploi, PPE) so that it could be merged with the in-work income supplement (RSA Activité) and become a single in-work benefit. The in-work benefit was created by the Act of 17 August 2015 on Labour-Management Dialogue and Employment, and has been in place since 1 January 2016. The in-work benefit is better targeted to promote a return to full-time work for low-paid workers.

The amount of in-work benefit is equal to a targeted income, less the maximum between resources and a lump sum.

The targeted income is determined as the sum of three elements:

• A lump sum of EUR 526.25, modulated according to the composition of the household. For instance, it is increased by 50% for couple (EUR 789.38), then 30% for each child until two (EUR) and 40% for each additional child (EUR). The amount may be increased for isolated parent (128.412% of the basic lump sum for the adult and then 42% for each child).

 

Number of dependents	Single	Couple
0	526.25	789.38
1	789.38	947.26
2	947.26	1 157.76
For each additional dependent	210.50	210.50

• An individual bonus of EUR 67.26 (12.782% of the basic lump sum) is planned for persons whose net income exceeds 80% of the net minimum wage; this bonus grows linearly if the net income is between 50% and 80% of the net minimum wage.3

• 62% of the net professional income of the household.

Then ressources are assessed as the sum of the household income, plus the benefits (family benefits, housing benefits).4 A lump sum depending on the composition of the household (12% of the basic lump sum (EUR 526.25) for a single person, 16% for a couple, 16.5% for three persons or plus) is used to take into account the housing benefits.5

4. Main changes in the tax system and social benefits regime since the taxation of 2015 income

• Tax system (2016 income)

• Special income tax reduction.

• Social benefits regime

• Increased reduction of employer-paid contributions for family allowance: 3.45% instead of 5.25% for salary up to 3.5 times the minimum wage from April 2016 (1.6 times before).

• Creation of a new cash transfer benefit for low income workers (“prime d’activité”) which replace the PPE and the “RSA activité”.6

5. Memorandum items

To assess the degree of comparability between countries, the following additional information should be taken into account:

• Coverage is of the private and semi-public sectors of NACE sections C to K up to 2007 and NACE rev.2 sections B to N from 2008.

• The category “employees” encompasses all full-time dependent employees (excluding apprentices and interns).

• The figures presented are obtained by applying income tax and social contribution scales to gross salaries as listed in annual social data reports (DADS) in NACE.

France

2017 parameter values

APW earnings	Ave_earn	38 582	Secretariat estimate
Income tax
Work expenses	work_rel_fl	430
	work_rel_ceil	12305
	work_rel_rate	0,1
Tax schedule	tax_sch	0	9 807
		0,14	27 086
		0,3	72 617
		0,41	153 783
		0,45
	limit_demipart	1527
	limit_sp_demipart1	3602
Décote value	decote_sing	1569
	decote_mar	2585
	decote_pente	0,75
Tax reduction	red_taux	0,20
	red_seuil_1	18685
	red_seuil_2	20705
	red_seuil_dp	3737
	tax_min	61
CEHR	cehr_rate1	0,03
	cehr_rate2	0,04
	cehr_ceil1	250000
	cehr_ceil2	500000
CSG+CRDS	CSG_CRDS_abat	0,0175
	CSG_rat_noded	0,0240
	CRDS_rat_noded	0,0050
	CSG_CRDS_rat_noded	0,0290
	CSG_rat_ded	0,0510
	CRDS_special	0,0050
Employee contributions
	pension_rate	0,069
	pension_rate2	0,004
Sickness	sickness_rate	0,0075
Unemployment	unemp_rate	0,0240
Extra pension (non-cadres) (incl. AGFF)	pens_rate_ex	0,039
	pens_rate_ex2	0,09
Employer contributions
	pens_empr1	0,0855
	pens_empr2	0,0190
Sickness	sickness_empr	0,1289
Authonomous Solidarity Contribution	CSA	0,0030
Unemployment (incl. "garantie de salaire")	unemp_empr	0,0420
Accidents	accidents_empr	0,0232
Family Allowance	fam_empr	0,0525
	fam_empr_2	0,0345
Extra pension (incl. AGFF)	pens_empr_ex	0,0585
	pens_empr_ex2	0,1345
Others	others_empr	0,0266
CS reduction & corporate tax credit
Employer SSC reduction rate	SSC_empr_redrate2	0,6
Employer SSC reduction maximum	SSC_empr_red_max	0,2849
Employer SSC reduction SMIC reference	SSC_empr_SMIC_ref	1,6
	SSC_empr_SMIC2	3,5
Taux de réduction CICE	cice_red	0,07
	cice_max	2,5
Social transfers
Child benefit (second child)	CB_2	1566,15
third & subsequent before CRDS	CB_3	2006,59
First ceiling for CB	CB_c1	67408
Second ceiling for CB	CB_c2	89847
Increase of ceiling per child	CB_ceiling_extra_child	5617
Extra child benefit for isolated parent	CB_isol	1322,40
Prime d’activité	pa_forf	526,25
	pa_maj1	0,50
	pa_maj2	0,30
	pa_maj3	0,40
	pa_maj_isol1	0,28412
	pa_maj_isol2	0,42804
	pa_pct	0,62
	pa_bonus	0,12782
	pa_bonus1	0,39
	pa_bonus2	0,63
	pa_forf_logement1	0,12
	pa_forf_logement2	0,16
	pa_forf_logement3	0,165
Others
Social security contributions	SSC_ceil	39228
Derivation of minimum income	SMIC_horaire	9,76
	SMIC_heures	1820
	SMIC	17763,2

2017 tax equations

The equations for the French system are mostly calculated on a family basis. Variable names are defined in the table of parameters above, within the equations table, or are the standard variables “married” and “children”. A reference to a variable with the affix “_total” indicates the sum of the relevant variable values for the principal and spouse. And the affixes “_princ” and “_spouse” indicate the value for the principal and spouse, respectively. Equations for a single person are as shown for the principal, with “_spouse” values taken as 0.

 

	Line in country table and intermediate steps	Variable name	Range	Equation
1.	Earnings	Earn
	Quotient for tax calculation	Quotient	J	1+Married+IF(Children<3, Children/2, Children-1)+0.5*(Married=0)*(Children>0)
2.	Allowances
	CSG deductible	CSG_ded	B	CSG_rat_ded*((1-CSG_CRDS_abat)*MIN(earn;4*SSC_ceil)+Positive(earn-4*SSC_ceil))
	Salary net	earn_dec	B	earn-SSC-CSG_ded
	Work related	work_exp	B	MIN(work_rel_ceil, MAX(work_rel_rate* earn_dec, MIN(work_rel_fl, earn_dec)))
	Basic	basic_al	B	0
3.	Credits in taxable income	taxbl_cr	B	0
4.	CG taxable income	tax_inc	J	Positive(earn_dec_total-work_exp)
5.	CG tax before credits
	Calculation according to schedule	sch_tax	J	MAX(quotient*Tax(tax_inc/quotient, tax_sch), IF(Married, 2*Tax(tax_inc/2, tax_ sch)-limit_demipart*(quotient-2), Tax(tax_inc, tax_sch)-(Children>0)* (limit_sp_ demipart1+limit_demipart*(quotient-2))))++cehr_rate1* MIN((cehr_ceil2-cehr_ ceil1)*(1+Married);MAX(tax_inc-cehr_ceil1*(1+Married);0))+cehr_rate2 * MAX (tax_inc-cehr_ceil2*(1+Married);0)
	Adjusted for decote	adj_tax	J	SI(Married;Positive(MINA(tax_sch; (1+decote_pente)*tax_schdecote_pente* decote_mar));Positive(MINA(tax_sch;(1+decote_pente)*tax_sch-decote_pente* decote_sing)))
	Tax liable	inc_tax	J	(adj_tax>=tax_min)*adj_tax
	CSG+CRDS (non-deductible)	CSG_CRDS_noded	B	CSG_CRDS_rat_nod*((1-CSG_CRDS_abat)*MIN(earn;4*SSC_ceil)+Positive(earn-4*SSC_ceil))
	CSG deductible	CSG_ded	B	CSG_rat_ded*((1-CSG_CRDS_abat)*MIN(earn;4*SSC_ceil)+Positive(earn-4* SSC_ceil))
6.	Tax credits :	tax_cr	J	adj_tax*SI((tax_inc<=red_seuil_1*(1+Married)+red_seuil_dp*Children);red_taux;SI(tax_inc<=’red_seuil_2*(1+Married)+red_seuil_dp*Children;(tax_inc*red_taux’/(red_seuil_1*(1+Married)+red_seuil_dp*Children-(red_seuil_2*(1+Married)+red_ seuil_dp*Children)))+(red_taux*(red_seuil_2*(1+Married)+red_seuil_dp*Children))/(red_seuil_2*(1+Married)+red_seuil_dp*Children-(red_seuil_1*(1+Married)+ red_seuil_dp*Children));0))
7.	CG tax	CG_tax	J	inc_tax+CSG_CRDS_noded+CSG_ded-tax_cr
8.	State and local taxes	local_tax	J	0
9.	Employees’ soc security	SSC	B	pension_rate*MINA(earn, SSC_ceil) +(sickness_rate+pension_rate2)*earn +unemp_rate*MINA(earn, 4*SSC_ceil) +pens_rate_ex*MINA(earn, SSC_ceil)+(earn>SSC_ceil)*pens_rate_ex2*MINA (earn-SSC_ceil, 3*SSC_ceil-SSC_ceil)
11.	Cash transfers	cash_transf_gross	J	SI(Children<2;0;(CB_2+(Children-2)*CB_3)*SI(tax_inc<=(CB_c1+CB_ceiling_ extra_child*(Children-2));1;SI(tax_inc<=(CB_c2+CB_ceiling_extra_child* (Children-2));0,5;0,25)))+SI(Isolated=1;CB_isol*Children;0)
		in_work_benefit_gross	J	MAX(SI((Isolated=’1);’ 12*pa_forf*(1+pa_maj_isol1+pa_maj_isol2*Children); 12*pa_forf*(1+SI(Married=1;pa_maj1;0)+pa_maj2*SI(Children<=2;Children;0)+pa_maj3*SI(Children>2;Children-2;0)))+pa_pct*(earn_dec-CSG_CRDS_noded)+pa_ bonus*pa_forf/(pa_bonus2-pa_bonus1)*12*SI(ET(pa_bonus1*SMIC<(earn_ dec_princ-CSG_CRDS_noded_princ);pa_bonus2*SMIC>(earn_dec_princ-CSG_ CRDS_noded_princ));(earn_dec_princ-CSG_CRDS_noded_princ)/SMIC-pa_ bonus1;0)+pa_bonus*pa_forf/(pa_bonus2-pa_bonus1)*12*SI(ET(pa_bonus1* SMIC<(earn_dec_spouse-CSG_CRDS_noded_spouse);pa_bonus2*SMIC>(earn_ dec_spouse-CSG_CRDS_noded_spouse));(earn_dec_spouse-CSG_CRDS_noded_ spouse)/SMIC-pa_bonus1;0)+pa_bonus*pa_forf*12*SI((earn_dec_princ-CSG_ CRDS_noded_princ)>=pa_bonus2*SMIC;1;0)+pa_bonus*pa_forf*12*SI((earn_dec_spouse-CSG_CRDS_noded_spouse)>=pa_bonus2*SMIC;1;0)-MAX(earn_dec-CSG_CRDS_noded+(family_benefit_gross-SI(Isolated=’1;CB_isol*Children;0)*(1-(22,5%’/28,15%)))+((Married+Children=’0)*’ pa_forf_logement1*pa_forf*12+ (Married+Children=’1)*pa_forf_logement2*pa_forf*1,5*12’ + (Married+Children> =’2)*pa_forf_logement3*pa_forf*1,8*12);’ SI(ET((Married=’0);(Children>0));’ 12*pa_forf*(1+pa_maj_isol1+pa_maj_isol2*Children);pa_forf*12*(1+SI(Married=1;pa_maj1;0)+pa_maj2*SI(Children<=2;Children;0)+pa_maj3*SI(Children>2;Children-2;0))));0)
		crds_cash_transf	J	cash_transf_gross*-1*CRDS_special
		cash_transf_net	J	cash_transf_gross+crds_cash_transf
13.	Employer’s soc security	SSC_empr_gross	B	(sickness_empr + CSA + pens_empr2 + accidents_empr+others_empr)*earn + pens_empr1*MINA(earn;SSC_ceil) + pens_empr_ex*MINA(earn;SSC_ceil) + pens_empr_ex2* MAX(MIN(earn;3*SSC_ceil) SSC_ceil;0)+unemp_empr*MIN (earn;4*SSC_ceil) ) + + SI(earn<SSC_empr_SMIC2*SMIC; fam_empr_2*earn; fam_empr*earn)
		SSC_empr_reduction	B	IF(OR(earn>SSC_empr_SMIC_ref*SMIC,earn=’0),0,-MIN’ (SSC_empr_red_ max*earn,(SSC_empr_red_max/SSC_empr_redrate2)*(SSC_empr_SMIC_ref* SMIC/earn-1)*earn)) -IF(earn<cice_max*SMIC;earn*cice_red)
		SSC_empr_final	B	SSC_empr_gross+SSC_empr_reduction

Key to range of equation B calculated separately for both principal earner and spouse P calculated for principal only (value taken as 0 for spouse calculation) J calculated once only on a joint basis.

Notes

← 1. The social protection scheme is named ARRCO for non-managers and AGIRC for managers.

← 2. Between four and eight times the ceiling, the repartition of the pension contributions between employee and employer contribution is not nationally decided.

← 3. The boundaries are defined as : minimum of 59 hours paid at gross minimum wage per hour per month and maximum of 95 hours paid at gross minimum wage per hour per month.

← 4. Capital income, unemployment benefits, pensions or minimum old-age pensions are not taken into account in this model.

← 5. The complete formula uses the minimum of this lump sum tax and the amount of housing benefits. As the model does not include housing benefits, we only use the lump sum in the formula. This method tends to minimize the amount of “prime d’activité” served.

← 6. In the previous model, for 2015 revenues, this reform only affects the income tax (no PPE in 2016) but not the benefits, since the “prime d’activité” will be served as from the beginning of 2016.