TSA Entitlements and unused leave
Time savings consist in converting entitlements registered in a Time Savings Account (TSA) or, if no such TSA exists, entitlements from unused leave into savings, in preparation for your retirement!
Do all the savings schemes operate with a TSA? How exactly does it work? Explanations.
Key information
Convert your time into savings
By topping up your retirement and employee savings schemes without losing your unused leave.
Take advantage of a favourable tax regime by saving your conversions
The amounts saved are exempt from income tax and partly exempt from employee social contributions.
Get a boost from your company
Depending on the agreements signed, your employer may top up your payments with an employer contribution.
How does it work?
Under an agreement governing time savings accounts, entitlements registered in a TSA1 may be used, if so allowed under the TSA agreement, to top up a PEE, PERCO, PERECO, PEROB, PERU or Article 832 plan, up to a threshold of 10 days per year, in order to benefit from a favourable tax regime.
If no such time savings account agreement exists, your unused leave3 may be used to top up a PERCO or a PERECO, up to a threshold of 10 days per year.
Depending on your company, your TSA entitlements / unused leave can be converted into savings at any time during the year or as part of a TSA conversion campaign.
What is the tax regime applicable?
If you convert entitlements registered in a TSA or unpaid leave into savings in a Retirement Savings Plan, up to a threshold of 10 days per year, you can be exempt from:
- income tax
- employee social security contributions (health, maternity, disability, death and old-age pension insurance) other than CSG (social security contributions)/CRDS (social debt repayment contributions)4
TSA entitlements corresponding to an employer contribution in the form of time or money are considered equivalent to an employer contribution to a PERCO, PERECO or PERU and therefore exempt from:
- income tax
- employee social security contributions other than CGS/CRDS4
On the other hand, entitlements registered in a TSA and transferred to a PEE are subject to employee social security contributions and income tax.
1 In the case of TSA entitlements built up from paid leave, only paid leave beyond the 5th week may be transferred in this way.
2 Plan d'Epargne Entreprise (PEE, or company savings plan) / Interentreprises (PEI, or intercompany savings plan); Plan d'Epargne pour la Retraite COllectif (PERCO, or collective retirement savings plan) / Interentreprises (PERCOI, or intercompany collective retirement savings plan); Plan d'Epargne Retraite d'Entreprise COllectif (PERECO, or collective company retirement savings plan) / Interentreprises (PERECOI, or intercompany collective retirement savings plan); Plan d'Epargne Retraite Unique (PERU, or single retirement savings plan); Plan d’Epargne Retraite Obligatoire (PEROB, or mandatory retirement savings plan); Plan d’Epargne Retraite d’Entreprise Unique (PERU, or single company retirement savings plan).
3 The days that may be transferred in this way include:
- Paid Leave (CP) for days exceeding the duration of 24 working days (L. 3334-8 of the French Labour Code)
- Extra days of leave resulting from a reduction in statutory working hours
- Rest period entitlements in the form of days off (for managerial employees working on a fixed-day basis)
- Additional days off for fragmented leave periods
- Contractual leave.
4 At a rate of 9.7%, of which 6.8% tax-deductible CSG, at 01/01/2023. CSG/CRDS base equal to 98.25% of the gross amount.
5 Figures shown for information purposes only. They can vary significantly from one situation to another and from one company to another. Assumptions used in our example: a junior managerial employee with a salary exceeding the PASS (annual social security ceiling, >€40,000), with charges applied beyond bracket A.
6 Contributions payable by employees, generally in the region of 18%, are exempt from a portion of social security contributions estimated at 7.3%, i.e. a guideline rate of 10.7%.
7 Income tax rate of 11%. Calculated without taking into consideration the flat-rate allowance for business expenses of 10% and tax-deductible CSG.
8 Amount net of withheld income tax (the company or the employee must declare the bonus amount net of deductible CSG to the tax authorities).