The URSSAF thus presents the professional expenses on its website: “The expenses incurred by the employee for the purposes of his professional activity are professional expenses that the employer is required to reimburse him.”
Professional expenses are not subject to social security contributions and CSG-CRDS.
The employer must, on the other hand, reinstate the sums concerned in the base of the contributions if it is about an employee to whom it applies a specific fixed deduction (DFS) for professional expenses.
In principle, to be exempt from social and other contributions, these expenses must correspond to a precise definition. We have gathered in this first part the following expenses reimbursable in exemption from contribution:
- Meals, accommodations and travel expenses;
- Vehicles expenses;
- Cost of transportation from home to place of work.
In Part Two, we will outline the following categories of expense reimbursements:
- Information and communication technologies;
- Work clothes.
Finally, we will present the mechanism of the specific deduction for professional expenses.
I – Definition of professional expenses and terms of reimbursement
Compensation for professional expenses can take various forms:
- Reimbursement of actual expenses or direct payment of costs by the employer, on receipts;
- A payment of lump-sum allowances, presumed to be used in accordance with their purpose, up to the exemption limits set by the regulations;
- For certain professions, a specific standard deduction.
In some cases, actual reimbursement is mandatory.
Whenever a system of fixed allowances exists, the employer can still use the reimbursement of actual costs even if they are higher than the exemption limits, provided that they are justified.
In some cases, the reimbursement of professional expenses is only made on the basis of the expenses actually incurred. Other professional expenses may be compensated in the form of lump sum allowances. These allowances are exempt from contributions if:
- they do not exceed the limits set by law.
- the factual circumstances provided for by this decree are well established.
If these conditions are met, the employer does not have to justify the expenses because the allowances are “presumed to be used in accordance with their purpose”.
II – Meals and accommodation
Business meals must be exceptional (i.e. irregular and limited in nature) in the interest of the company.
To exclude meal expenses from the contribution base, the employer must produce documents attesting to the reality of the business meal, the status of the people who took part in it and the amount of the expense.
Employee fed at his workplace
If the employee is forced to take a meal at his place of work due to specific work organization conditions, the employer is authorized to deduct an allowance for professional expenses to compensate for the additional expenses incurred. The maximum amount of this compensation is fixed each year by law.
Employee on business trip
The additional costs incurred by an employee on a business trip who is prevented from returning to his residence constitute professional expenses. In this case, the employer must be able to prove that the employee is prevented from returning to his residence or his usual place of work.
The employer can also pay a meal allowance, within a limit set each year, if it is shown that he must have his meal in a restaurant. The allowance is exempt from contributions and, below the threshold, the employer does not have to justify the proper use of the allowance.
Accommodation for employees on business trips
In order to be able to reimburse housing costs (in addition to meal costs), the employee must be on “long travel” defined as follows: he is carrying out a professional mission preventing him from returning to his place of residence every day.
The employee is presumed to be prevented from returning to his residence when the distance separating the place of residence from the place of travel is:
- at least equal to 50 km (return journey);
- and public transport does not allow this distance to be covered in less than 1.5 hour.
In this case, flat-rate allowances can cover the food and accommodation expenses of employees.
This type of trip cannot last more than 3 months in mainland France.
> Details concerning work trips of more than 3 months in mainland France
- From more than 3 months to 2 years: from the 4th month to the 24th month, the flat-rate allowance is reduced by 15%.
- From more than 2 years to 6 years: from the 25th month until the 72nd month, the allowance is reduced by 30%.
> Details regarding work trips abroad
The applicable scale is set by a decree of 2006, amended several times since then. Insofar as it is regularly updated, it is recommended to consult the website of the Ministry of Finance (http://www.economie.gouv.fr/dgfip/mission_taux_chancellerie/frais) or to contact us.
They are considered as professional expenses, when the expenses incurred by the employee, on the occasion of business trips, incentive trips, seminars, training, etc. are justified.
These trips must be characterized by the organization and implementation of a particular work program when, for the employee, participation in these trips does not correspond to the normal exercise of his profession.
For travel expenses, the employer must produce the work program and justify the expenses incurred individually by the employees.
On the other hand, leisure trips paid by the employer for employees and their families cannot be considered as professional expenses.
To find out the ceilings for reimbursements excluding social charges, we invite you to consult the URSSAF website: https://www.urssaf.fr/portail/home/taux-et-baremes/frais-professionnels/indemnite-de-petit-deplacement/repas.html
III – Vehicle expenses
Each time an employee has to use his vehicle for professional purposes, the employer reimburses the cost in exemptions from social charges. But the employer can also, in certain cases, reimburse the cost of the vehicle for travel from home to the place of work.
Reimbursement of vehicle expenses from home to work
The employer can reimburse vehicle costs when the employee is forced to use his personal vehicle for reasons that are not his convenience (no public transport to serve the home-workplace journey, or because of work schedules that do not correspond with public transport schedules).
The employee may also be required to use his personal vehicle if his residence is far from the place of work, for reasons not relating to his personal convenience. This is the case, in particular, for reasons related to employment (difficulty finding a job, precariousness, transfer following a promotion, etc.)
Fixed mileage allowances
When the employee is forced to use his personal vehicle for professional purposes, the fixed remuneration paid by the employer is exempt from social security contributions within the limits set by the mileage scales published annually by the tax authorities. Beyond the limits of the tax scale, it is up to the employer to justify the effective use of the allowances in accordance with their purpose.
The employer must provide supporting documents relating to:
- the means of transport used by the employee;
- the distance covered;
- the tax horsepower of the vehicle.
Note: Parking fees. When the employee benefits from reimbursement of mileage allowances and the employer can justify the absence of a free parking space near the place of work, reimbursement of costs incurred for parking may be excluded from the basis of social contributions.
The employee can also be reimbursed for his professional expenses on the basis of supporting documents. The administration accepts certain methods of proof of private and professional mileage.
In this case, it must be demonstrated that the employer does not reimburse fuel for private use. When, on the invoices, the total number of liters of fuel paid by the company corresponds to the number of kilometers traveled in a professional capacity multiplied by the average consumption of the vehicle per 100 km, these elements are judged by the administration as constituting a presumption sufficient to consider that the employee pays for his fuel on a private basis.
IV – Cost of transportation from home to place of work
Obligation of support by the employer
The employer must cover 50% of the price of the season tickets taken out by its employees for travel between their habitual residence and their place of work by means of:
- public passenger transport;
- or public bicycle rental services, such as Vélib’ rental.
However, some employees are excluded, these are:
- employees who do not incur transport costs, in particular employees residing near their place of work, those benefiting from transport organized by their employer and home workers;
- employees who use their personal vehicle.
For this second case, we saw in the previous chapter, under what conditions the employer can reimburse the vehicle costs to the employee.
Terms of support
> Titles concerned. The employer pays for the transport tickets taken out by the employees, among the following categories:
- subscriptions to an unlimited number of journeys as well as annual, monthly, weekly or automatic renewal subscriptions to an unlimited number of journeys issued by the SNCF, public transport companies, etc.;
- subscriptions to a public bicycle rental service (eg Vélib’).
> Proportion of cost covered. The employer must cover 50% of the cost of subscription tickets taken out by employees. The employee may request payment for the transport ticket allowing him to travel from his usual residence to his place of work in the shortest possible time.
Tax and social regimes of participation
The employer’s support is exempt from income tax and social contributions, including in the event of the application of a specific flat-rate deduction for professional expenses.
The employer can cover the cost of subscriptions beyond the legal obligation. In this case, the optional contribution above 50% is exempt within the limit of the costs actually incurred, provided, for employees who work in a region other than that in which they reside, that the distance from their residence to their place of work is not a matter of personal convenience but of job-related constraints.
Transport premium: participation in the cost of fuel
Employers can pay a bonus to their employees to cover all or part of the fuel costs (gasoline, diesel) or the cost of supplying their electric, plug-in hybrid or hydrogen vehicles that they incur for travel between their habitual residence and place of work. This support is called “transport bonus”.
This bonus can be paid to employees forced to use their personal vehicle for the reasons we mentioned in paragraph III.1.
As soon as the employer sets up the transport bonus, he must allow all of his employees to benefit from it according to the same conditions and according to the distance between the home and the place of work. The employer must ask the employees concerned for the elements justifying the coverage (residence outside the transport perimeter or essential use of the personal vehicle) as well as a copy of the vehicle registration document.
Social and fiscal regimes: Since January 1st 2021, the transport premium is exempt from tax and contributions of legal or conventional origin, within the limit, per employee and per year, of €500, including a maximum of €200 for fuel costs.
Sustainable mobility package (cycling, carpooling, shared mobility services, etc.)
On an optional basis, the employer can cover, in the form of a “sustainable mobility” package, all or part of the costs incurred by employees traveling, for the journey between their usual residence and their place of work:
- with their personal cycle (bicycle, electric bicycle, tricycle, etc.);
- as a driver or passenger in carpooling or other shared mobility services;
- by public passenger transport. In this case, the payment cannot concern the public transport subscription costs already covered compulsorily.
An employer who decides to cover the personal transport costs of his employees through the “sustainable mobility” package must allow all eligible employees to benefit from it under the same conditions.
The employer must obtain from each employee proof of payment or a sworn statement relating to the effective use of one or more of the means of travel covered by the system.
Social security and tax system: Coverage under the sustainable mobility package is exempt from income tax and social security contributions up to a maximum of €500 per year and per employee.
Do not hesitate to contact us if you have any doubts about the treatment in tax or social matters of a reimbursement of any charges to your employees, and we remind you that our next article will expose the expense reimbursements of:
- Information and communication technologies;
- Work clothes.
See you soon!
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