The Social Security Financing Act (LFSS) for 2025 introduces significant reforms, such as a reduction in employer contribution exemptions. These provisions reflect the legislature’s desire to control social and health spending while adapting financing mechanisms to current challenges.
This law is presented in three main points:
- Measures relating to payroll contributions
- Measures relating to self-employed workers
- Some miscellaneous measures
It should be noted that we present below only the provisions that mainly concern companies.
I – Measures relating to payroll contributions
Apprentice pay: reduction in exemptions from employee contributions and CSG/CRDS
For apprenticeship contracts entered into on or after March 1st 2025, the exemption limit for employee contributions is reduced from 79% to 50% of the minimum wage (SMIC). The portion of apprentices’ remuneration exceeding 50% of the minimum wage is now subject to CSG/CRDS.
General reductions in employer contributions
The Social Security Financing Act organizes the merger in two stages (2025 then 2026) of general reductions in employer contributions.
As of January 1st 2025, the eligibility ceilings for rate reductions on employer health insurance and family allowance contributions are reduced as follows:
- reduction in the rate of employer health insurance contributions on salaries not exceeding 2.25 times the minimum wage (instead of 2.5 times the minimum wage);
- reduction in the rate of employers family allowance contributions on salaries not exceeding 3.3 times the minimum wage (instead of 3.5 times the minimum wage).
From 2026, reconfiguration of the reduction in employer contributions (RGCP) and elimination of the two other general reductions.
In addition, for contributions and payments due for periods of activity starting from 1st January 2025, value sharing premiums (PPV) are included in the calculation of the RGCP, both in terms of the coefficient calculation formula and the reduction basis (even for PPV amounts exempt from contributions).
Increase in the employer contribution due for free share allocations (AGA)
Under certain conditions, joint-stock companies may grant bonus shares to their employees or managers, or to those of their affiliated companies, under preferential social and tax regimes.
The rate of the specific employer contribution due for AGA will be increased from 20% to 30% as of March 1st 2025.
Agricultural sector: sustainability, strengthening and extension of the TO-DE exemption
Farmers hiring casual workers (TO) on fixed-term contracts may, under certain conditions, benefit from a monthly exemption from employer contributions. The maximum duration of the exemption is set at 119 working days, whether consecutive or not, for the same employee and per calendar year. Under certain conditions, job seekers (DE) are considered casual workers when they are recruited under a permanent contract by a group of employers carrying out one of the eligible activities.
The law extends the TO-DE exemption, which was due to end in December 2025. In addition, the exemption ceiling is raised from 1.20 to 1.25 times the minimum wage, retroactively from May 1st 2024.
Finally, the TO-DE exemption is extended to:
- agricultural equipment cooperatives (CUMA);
- agricultural cooperatives and their unions, for fruit and vegetable packaging activities.
Young innovative companies (JEI)
Companies with JEI status can, subject to meeting several conditions, benefit from an exemption from employer social security and family allowance contributions.
As of March 1st 2025, the law raises the research expenditure intensity threshold to a minimum of 20% (instead of 15%) for eligibility for JEI status.
II – Measures relating to self-employed workers
Provisions relating to the unified social security contribution base for the self-employed
The 2024 Social Security Act (LFSS) provides for a reform of social security contributions payable by non-agricultural self-employed workers not covered by the micro-social security scheme. Social security contributions are calculated on a single simplified basis corresponding to the self-employed worker’s professional income, from which professional expenses, excluding social security contributions, are deducted, and reduced by a rate set at 26%. This 26% reduction cannot be less than 1.76% nor more than 130% of the annual social security ceiling.
Entry into force: The reform will apply from the regularization applied to contributions due for the 2025 financial year. In practice, it will therefore be implemented during the regularization of these contributions in 2026. Consequently, the provisional contributions for 2025 should be calculated on the basis of the provisions prior to the reform of the contributions base.
Provisions concerning “auto-entrepreneurs”
- Gradual increase in the contribution rate for liberal self-employed workers covered by the independent regime: The overall rate is raised to 23.10% on July 1st 2024, then to 24.60% in 2025 and to 26.10% in 2026.
- Towards mandatory collection of contributions by digital platforms: The 2024 Social Security Finance Act (LFSS) has established a mandatory system for digital platforms to declare and withhold social security contributions from self-employed workers covered by the micro-social security scheme who operate through their intermediary. Thus, by 2027, their social security contributions will be collected directly by the networking platforms.
Clarification: This obligation also concerns platform users who have chosen to be affiliated with the general scheme (short-term furnished rentals and rentals of movable property).
The 2024 LFSS provided that these provisions will come into force from January 1st 2027. It also provided that this system could, however, be gradually applicable from January 1st 2026 to platform operators who meet certain criteria to be provided for by decree (according to the 2025 LFSS).
Exemption from retirement contributions for certain physicians in underpopulated areas
Physicians who combine full employment and retirement and practice in an area characterized by insufficient healthcare provision, are exempt (based on their professional activity as physicians) from retirement insurance contributions due on income earned in 2025.
To benefit from this exemption, their annual non-salaried professional income must be below a certain amount (set by decree). Furthermore, physicians benefiting from this contribution exemption will not accrue any basic pension rights for a second pension for the periods in question.
These provisions will only apply to physicians who have drawn their personal retirement pension before March 1st 2025.
III – Some miscellaneous measures
Among the various measures to be noted, we cite below:
- Reform of compensation for functional damage linked to work accidents and occupational diseases: From a date to be set by decree (no later than June 1st 2025), the permanent disability pension in the event of an accidental injury (AT/MP) will compensate not only for the professional deficit, but also for the functional deficit. These increases will apply in the same way in the event of inexcusable fault on the part of the employer.
- Change in the rules for determining “social security” staff numbers from January 1st 2025 concerning employees made available by a group of employers: From now on, employees made available to a company are no longer taken into account in the group’s “social security” workforce (except for AT/MP pricing). Companies hosting employees made available by a group of employers therefore continue not to include these employees in their “social security” workforce. Thus, as of January 1st 2025, employees made available by a group of employers are neither counted in the workforce of the group (except for AT/MP pricing) nor in that of the user company.
- Certificate of life to receive a retirement pension: To receive a retirement pension, insured persons residing abroad must provide their pension fund with a certificate of life every year. In practice, the insured must have this document completed by the French consulate or the relevant local authorities.
The law summarizes the methods of proving this certificate of life (in addition to the possibility of using biometric recognition):- an automatic exchange of data between the pension-paying organization and a civil status agency in the beneficiary’s country of residence;
- an on-site inspection by a trusted third-party organization;
- the provision of a certificate of existence endorsed by the consular service of the beneficiary’s country of residence.
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