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Declaration and payment of social security contributions

Verified 30 November 2020 - Directorate for Legal and Administrative Information (Prime Minister)

Contributions and social contributions are payable by both the employer and the employee and are levied on the gross wage. In practice, the contributions due by the employee are deducted at the time of each payroll by the employer. It declares and remits employer and employee contributions and contributions to collection agencies. The employee receives the net salary, i.e. his gross remuneration deducted from contributions.

The employee and the employer shall be responsible

The social protection of the employed person is financed by contributions and contributions which are calculated on the basis of the gross wage. Some of these levies are paid both by the employee (wage share) and the employer (employer share).

These include:

  • Social security contribution covering basic old-age insurance (retirement from the general scheme or the agricultural social protection scheme)
  • Unemployment insurance contributions that finance unemployment benefits (wage share only for show performers, employees working in Monaco and some expatriate employees)
  • Compulsory supplementary pension contributions, which are repaid to Arrco funds (for all executive and non-executive employees in the private sector) - Agirc (in addition to executive staff), to 60% by the employer and 40% by the employee 
  • Apec Fee (for executives only)

Once these sums have been deducted, the employee receives the net salary.

Employees in the private and public sector who work overtime benefit from a reduction in their old-age insurance contributions (11.31% at most during these hours).

The employer must pay the contributions and contributions (wage share and employer share combined) to the collection agencies:

  • Urssaf: titleContent whether the employee is covered by the general social security scheme 
  • Agricultural social insurance (ASM) if the employee is covered by the agricultural social protection scheme.

FYI  

the contribution of unemployment insurance is no longer payable by the employee, except for the intermittents of the show, the employees working in Monaco and some expatriate employees.

Only the employer shall be liable

There are other contributions that are solely the responsibility of the employer:

  • Contributions of family allowances 
  • Social security contributions covering sickness, maternity, invalidity and death insurance
  • Unemployment insurance contributions which finance unemployment benefits
  • Solidarity Autonomy Contribution (CSA)
  • Workers' compensation contributions 
  • Payment to the National Housing Fund (Fnal) 
  • AGS Contribution
  • Social Package
  • Freight payment (for employers with more than 9 employees in an urban transport area).

Employee-only

Tax levies intended to finance social security are borne solely by the employee:

Until 31 December 2022, where the employer makes available to the employee an electric vehicle charging station, the benefit in kind of the use of that station for non-professional purposes shall not be taken into account.

The basis on which social contributions and contributions are calculated is the basis on which they are calculated.

The basis of assessment shall include all sums, benefits and accessories (in kind or in money) due in return for, or in connection with, work, activity or elective office.

These include the following compensation elements:

  • Gross wages, including overtime and overtime pay 
  • Premiums and allowances 
  • Supplementary social benefits 
  • Replacement income in the event of sickness, maternity or accident at work 
  • Extra-legal family benefits 
  • Cash benefits provided by the company Committee 
  • Benefits in kind (e.g. food and accommodation, provision of cars for the private use of employees).

Other elements of remuneration are not subject to contribution:

  • Daily allowances paid by the Social Security 
  • Substitute earnings: retirement and invalidity pensions, unemployment and early retirement benefits 
  • Premiums linked to employee profit-sharing or participation in the company's performance (under a collective agreement) 
  • Bonuses related to the presentation of the Medal of Honor of Work, within the limit of the basic monthly salary 
  • Compensation regarded as damages 
  • Employer's supplementary pension and supplementary pension contributions 
  • Reimbursement of professional expenses that can be justified.

The basis for calculating contributions may not be lower than the minimum statutory or conventional remuneration (Smic). In addition, there are statutory or conventional surcharges, bonuses and allowances (except for flat-rate employees or multi-card VRPs).

Conversely, some contributions are capped : beyond a certain amount or ceiling, remuneration is no longer taken into account for the calculation of contributions. This is the case for part of the old age and final contributions. The other contributions are due on the entire remuneration, they are said uncapped. The social security ceilings valid for one year are defined each 1er January.

The CSG-CRDS calculation basis is broader than that for social security contributions. The non-contributory elements of remuneration are added.

Calculate social contributions for hiring a first employee

The determination of the social security ceiling for the calculation of social contributions is that of the period of work giving rise to remuneration. It shall be adjusted in proportion to the time actually elapsed. That is to say, according to the periodicity of the pay or, where the employee has not been present during the whole of this period, according to the days covered by the employment contract during this same period. Special rules apply to part-time employees and those excluded from monthly payments.

Example :

In the case of payment of the December salary at the beginning of January, the applicable social security ceiling shall be that of December.

This ceiling will also be applied to remuneration related to the same pay due for other periods.

In case of a pay gap, the payroll tax reductions are calculated on 13 payroll.

The change in the operative event for the rates and ceiling has an impact on the calculation of the general reduction in social contributions for December and the reduction in the rate of contributions for family allowances.

In order to calculate the reduction in the rate of contribution for family allowances, the remuneration for the 13 months must be taken into account and reduced to 13 monthly minimum wages.

In the event of disagreement with a social security body, the trader may request a mediation.

FYI  

the reward of a trainee, which is compulsory from 2 months of an agreed traineeship, shall be exempt from social security contributions if it is less than €4.05 per training hour. Above this threshold, it is subject to social contributions.

Report via DSN

The wage bill (i.e. gross wages), the number of hours paid, the basis of assessment and the amount of contributions must be reported each month using the registered social declaration (DSN) :

  • by non-agricultural employers at the Urssaf,
  • by agricultural employers at MSA: titleContent.

The pay NSN must be made in the month following the period of paid employment:

  • by 5 of the month for employers with 50 or more employees whose pay is paid in the same month as the period of work, 
  • by 15 of the month in other cases (employers with 50 or more employees on pay difference, employers with less than 50 employees).

FYI  

employers who are not yet using the NSN must establish by January 31 the Annual Social Data Declaration (DADS-U).

Pay by dematerialized means

Payment by dematerialized channel is mandatory, irrespective of income from employment or turnover,

  • for self-employed entrepreneurs: by telepayment or credit card,
  • for standard insured persons: by direct debit, telepayment, credit card or transfer.

Monthly payment of contributions becomes the rule.

Third-party registrants

The employer may entrust the exercise of his rights to a third party declarant. The third party must make the declarations by dematerialized means.

Third party filers may be:

  • Companies paying commissions, brokerages, fees, copyrights or inventors' rights
  • Pension funds that pay pensions and annuities
  • Sickness insurance funds which pay sickness allowances (IJ) and invalidity pensions
  • Professionals who buy metals (ferrous and non-ferrous)

Companies with more than one establishment can centralize their social declarations and contributions in a single center in Urssaf. This device is called VLU.

The ELV is mandatory for companies with 250 or more employees. It is optional for others.

The company must apply for authorization.

The paperless file must be returned to the VLU account department of the Urssaf Caisse Nationale:

Who shall I contact

If the request is made before October 31, the ELV scheme is then put in place which on October 1er January of the following year. For companies who practice payroll offsetting, the implementation of the VLU is effective at 1er December of the current year.

In order to be accepted for an ELV, the employer must be in contact with at least 2 Urssaf centers.

They must also be up to date with their contributions and returns.

Please note

in the event of a dispute, the competent court is the court of the territory in which the (single) company social security body is located.

FAQ