French president allows tax-exempt bonuses between 11 December 2018 and 31 March 2019

January 1, 2019

On 24th December 2018 French President Emmanuel Macron passed a law allowing any private employer, including state-owned companies, to pay an exceptional tax-exempt bonus to employees. This is provided their earnings are less than 3,600 euros per month (three times more than the minimum wage), and that the bonus is less than 1,000 euros. If the bonus is above 1,000 euros, it is subject to social contributions and taxes.

The law passed on Christmas Eve allows the bonus to be paid to every employee, provided they are under the 3,600 euros per month salary cap and whose employment contact was in force on 31 December 2018. Additionally, the bonus is only tax-exempt if paid between 11 December 2018 and 31 March 2019.

The amount of the bonus is based on wage, job classification, working time and actual presence in 2018, and it can be determined either by an employer’s unilateral decision or a collective bargaining agreement.

The deadline for unilateral decision is 31 January 2019. After this date, a collective bargaining agreement is mandatory with a deadline of 31 March 2019.

This is one of the few changes he announced at the beginning of December 2018, after a month-long protest from the ‘Yellow Vest’ workers. Alongside declaring a “state of social and economic emergency” in France, Macron also pledged to raise the minimum wage by 100 euros per month from 2019, without any cost on the employer.

For further information or to discuss any of the issues raised, please contact Nicolas Chenevoy (


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