Contribution Exception Limits

The government sets the annual social security contribution ceiling. If the employer contributions to contingency funds and additional pension funds (ARRCO/AGIRC) are less than 85 percent of the annual social security ceiling, then these contributions are exempted from social security contributions. If the employer contribution to contingency funds is less than 19 percent of the social security ceiling, these are also exempt from contributions. If both the 85 percent limit and the 19 percent limit are exceeded, the largest excess amount is added to the URSSAF and ASSEDIC accumulators and reintegrated into the social security base. This has no impact on the pension fund contribution.

Three calculations are required to determine the limits:

• Contributions to contingency funds and additional pension funds are checked against the limit of 85 percent of the annual social security ceiling.

  Any excess is paid into the social security base.

• Contributions to contingency funds only are compared to 19 percent of the total funding base.

  Any excess is added to the social security and ASSEDIC funding base.

  Note:

  If both the 19 and 85 percent limits are exceeded, only the largest excess amount is reintegrated into the social security and ASSEDIC base.

These calculations are performed by the PRV FM REINT SOCIA formula, which is triggered by the PRV SE SOCIAL section. This formula performs the calculation for departing employees or during the month of December.