In the first part of this study, we presented the main professional expenses, starting by explaining the terms of reimbursement.
We have presented, with some details, the expense reimbursements of:
- Meals, accommodations and travel expenses;
- Vehicles expenses;
- Cost of transportation from home to place of work.
As previously announced, we will now explain the expense reimbursements of:
- Expenses reimbursement of information and communication technologies;
- Expenses reimbursement of telework;
- Expenses reimbursement of work clothes;
- The mechanism of the specific deduction for professional expenses.
I – Information and communication technologies
Information and communication technologies take various forms: Internet, computer or mobile phone, modem, software packages, etc. When the employee uses company equipment, this may result in a benefit in kind unless the latter makes reasonable use of it.
On the other hand, when the employee uses his own equipment on a professional basis, a reimbursement of costs must take place.
There are two reimbursement methods:
- Reimbursement on receipts: reimbursements made by the employer must be justified by the reality of the professional expenses borne by the employee.
Exemption from charges may relate to computer equipment, consumables and connection costs. For depreciable equipment, the exemption from charges takes the annual depreciation into account. The value of non-depreciable small equipment must be retained at the actual value of the year of acquisition. Consumables and connection costs can be reimbursed on proof of costs.
There are various possibilities for providing proof of expenditure. With regard to telephone costs, for example, an invoice showing the cost of professional communications not included in the telephone package represents proof.
- Reimbursement on the basis of flat-rate allowances: if the employer cannot justify the reality of the professional expenses, and that the costs incurred are justified by a professional reason, it is accepted that these can be reimbursed on the basis of a lump sum allowance not exceeding €50 per month.
It is currently accepted that the share of professional expenses is determined according to the declaration made by the employee when the employer cannot justify the reality of the professional expenses borne by the employee. In this case, the number of hours for strictly professional use is assessed, within the limit of 50% of total use. This rule should be changed soon.
II – Telework
Definition
Here is the definition formulated by the labor code (article L. 1222-9): “Teleworking designates any form of work organization in which work which could also have been carried out on the employer’s premises is carried out by an employee outside these premises on a voluntary basis using information and communication technologies.”
Teleworking can be carried out within the framework of a collective agreement or (possibly) a charter drawn up by the employer after consulting the social and economic committee (CSE), if there is one.
In the absence of a collective agreement or charter, the employee and the employer can still agree to use telework, regular or occasional. Their agreement can be formalized by any means (exchange of emails for example).
In addition, in the event of exceptional circumstances, in particular the threat of an epidemic, or in the event of force majeure, its implementation may then be imposed unilaterally by the employer.
The costs involved in teleworking
The labor code does not provide for an express rule imposing on the employer to bear the costs related to teleworking, but employers must bear the cost of the supply, installation and maintenance of the equipment necessary for teleworking in the event of telecommuting from home.
However, these costs are covered after validation by the employer.
There are three main types of reimbursable expenses:
- Fixed and variable costs related to the provision of private premises for professional use (the amount of rent for example for fixed costs and heating, air conditioning or electricity for variable costs);
- Costs related to the adaptation of a specific room;
- The costs of computer equipment, connection and miscellaneous supplies.
Other professional expenses may be allowed, provided the employer demonstrates that they are professional expenses related to teleworking.
Reimbursement of expenses
> Reimbursement on receipts
The costs incurred by the employee in the context of teleworking are considered as charges inherent to the function or employment, deductible from the contribution base, provided that the reimbursements made by the employer are justified.
The administration mentions, in a table, the rules for assessing the costs that can be deducted from the contribution base (with a cap of 50% for certain costs). Below is the link to access this table:
> Flat-rate allowances without supporting documents
The employer can reimburse telework expenses in the form of flat-rate allowances, free of contributions, up to an overall limit of € 10 per month for one day of telework per week, without proof. The monthly exemption limit varies according to the number of teleworked days per week:
- € 20 per month for 2 days of teleworking per week;
- € 30 per month for 3 days of teleworking per week;
- € 40 per month for 4 days of teleworking per week, etc.
The allowance can also be fixed on a daily basis. In this case, the exemption limit is set at a maximum of € 2.50, up to a limit of € 55 per month.
When the flat-rate allowance is provided for by the branch collective agreement or a professional or inter-professional agreement or a group agreement, it is exempt from contributions and social security contributions provided that its amount does not exceed:
- Either € 13 per month for one day of teleworking per week;
- Or, in the case of a daily allowance, € 3.25 per day of teleworking in the month, up to a monthly limit of € 71.50.
The risks in the case of teleworking for the personal convenience of the employee
In a recent judgment (March 9th 2022), the Rennes Court of Appeal considered that the expenses (relating to home-to-work journeys) incurred by an employee working from home for personal convenience could not be qualified as professional expenses.
Thus, when drafting a collective agreement or teleworking charter, it will be necessary to avoid any formula showing that teleworking can be set up for personal convenience.
III – Work clothes
Provision of work clothes
The provision of work clothes that meet the regulatory criteria for personal protective clothing falls into the category of professional expenses exempt from social security contributions.
Also constitutes professional expenses, the provision of clothing in the form and color fixed by the company (uniforms, in particular), specific to a profession and which meet a health and safety objective or contribute to the commercial approach of the company.
The following conditions must be met:
- The clothes remain the property of the company;
- They must not be worn outside the employee’s professional activity;
- Wearing them is compulsory under an individual or collective contractual provision, or internal company regulations.
Soiling bonuses
Some employers pay, for the upkeep of professional clothing, a lump sum indemnity, generally referred to as the “soiling premium”. This type of bonus constitutes a reimbursement of professional expenses, not subject to social contributions for the part corresponding to the costs actually incurred by the employee.
Clarification:
These premiums are not exempt if they are:
- Calculated uniformly or as a percentage of salary and without justification of the expenses actually incurred;
- Paid during the period of paid leave;
- Settled for almost all staff when abnormal soiling costs are not justified.
Supporting documents: the exemption for professional expenses presupposes in principle the production of supporting documents. However, the soiling premium is exempt from social security contributions within the limit of the amount provided for by the collective agreement, provided that the beneficiary of the premium is subject to the obligation to wear work clothes and that this premium varies according to the number of days worked. In this case, no proof is required.
Purchase of work clothes by the employee
Costs for the purchase of clothing incurred by the employee may be reimbursed under the same conditions as professional expenses. Exemption from charges will be applicable only if the clothing is acquired by the employee on an exceptional basis (when the normal exercise of his profession does not provide for it) and for the sole needs of the job.
IV – Specific flat-rate deduction for professional expenses (D.F.S.)
The principle
Some professions allow the employer to apply a specific flat-rate deduction (DFS) to the social security contribution base (rate of 5 to 40% depending on the profession), limited to € 7,600 per calendar year. Once this quota is exhausted, the deduction can no longer be applied for the rest of the calendar year.
The professions in question are to be interpreted strictly. The benefit of the specific flat-rate deduction for professional expenses is linked to the professional activity of the employee and not to the general activity of the company.
You can find the list of professions giving right to a specific fixed deduction for professional expenses as well as the deduction rate allowed by clicking on the following link:
The DFS applies to the base for social security contributions and to charges with the same base (unemployment insurance, AGIRC-ARRCO supplementary pension, FNAL, etc.).
On the other hand, the DFS never applies unemployment insurance contributions for journalists or on the CSG/CRDS.
For the DFS to apply, the employee must actually bear the costs. In the absence of expenses actually incurred, or if the employer bears or reimburses all professional expenses, it is therefore impossible to apply the DFS.
Implementation and practice of deductions
> Option for the application of the specific standard deduction
When the employer wishes to opt for the application of the specific flat-rate deduction for professional expenses, he must be authorized to do so either by a collective agreement or the staff representatives, or by each employee concerned.
With regard to the individual agreement of each employee, since January 1st 2022, the company must ensure annually, by any means, the consent of its employees to the application of the DFS. For this, the employer implements a procedure consisting in informing each employee concerned, by any means giving a certain date for this consultation, of this system and the consequences that its application has on his rights, in particular on the validation of his rights to social security and pension insurance daily allowances.
An agreement or refusal reply coupon must always be returned by the employee. If the employee indicates that he wishes to benefit from the specific fixed deduction or waives it, his decision takes effect from the following calendar year. If he does not respond to the consultation, his silence means agreement.
> Application of the flat-rate deduction
When the specific flat-rate deduction is applied, the basis for calculating the contributions is then made up of the total amount of gross remuneration, including the allowances paid for the reimbursement of professional expenses. Reimbursements of professional expenses must therefore, with some exceptions, be reinstated in the base for social security contributions.
In addition, direct payment by the employer of professional expenses (e.g. direct payment for the night in a hotel or a meal at the restaurant using a company bank card) must also be reinstated in the basis of contributions, prior to the application of the deduction.
By way of exception, certain sums representing reimbursements of professional expenses are not reintegrated into the contribution base. These are those paid, on the one hand, to professions for which the amount of the specific deduction is notoriously lower than the actual professional expenses incurred and, on the other hand, allowances paid in return for particularly heavy professional constraints.
Here are two examples:
- Long-distance travel allowances granted to construction workers under certain conditions;
- Compulsory payment by employers of 50% of the cost of public transport tickets.
Clarification:
Professional expenses are always excluded from the CSG/CRDS base, including in the case of application of a specific flat-rate deduction for professional expenses.
We hope that these two articles have been able to provide you with a basis for a better understanding of the processing of reimbursements of expenses in terms of social security contributions. But there are a large number of reimbursable costs that we have not been able to mention here. Also, do not hesitate to contact our service specializing in social law if you find any problem in this area.
