Value-sharing bonus
The value-sharing bonus, or PPV, which replaced the exceptional purchasing power bonus (PEPA) in July 2022, is a scheme that encourages employers to pay their employees an additional annual sum based on the sharing of financial results. This is a permanent scheme that companies can implement each year. This bonus remains optional and at the discretion of the employer.
How does it work? What are the advantages of paying this bonus into an employee savings and pension scheme?
Explanations.
Key information
Get a boost from your company
In addition to granting you the bonus, your company will pay your account administration fees1 if you save it and may, depending on the agreements signed by your company, also combine your bonus with an employer contribution.
Take advantage of a favourable tax regime by saving it
Any incentive bonus saved is exempt from income tax and subject only to CSG (social security contributions) and CRDS (social debt repayment contributions)2.
Benefit from a flexible bonus
You can opt to receive payment of your bonus and/or save it, in which case it will be inaccessible for a period of time depending on the type of scheme involved. And the amounts saved may be released early under specific circumstances permitted by law.
How does it work ?
The value-sharing bonus is optional and is set up by agreement between the company and its employees or their representatives. The amount of the bonus is freely determined by the company. It can be adjusted (individually or in combination) according to length of service, remuneration, seniority, working hours or job classification.
Your company can pay two bonuses per calendar year, each of which can be paid in one or more instalments (maximum one payment per quarter).
The amount of the bonuses must not exceed the applicable ceiling of €3,000 per beneficiary, or €6,000 under certain conditions3, in order to qualify for tax benefits.
The amounts of value-sharing bonuses saved in a PEE or PERCO, together with voluntary payments, are included in the calculation of the ceiling of one quarter of the gross annual remuneration received by the employee during the year of payment.
You have three options:
Save your value-sharing bonus, in other words, allocate it to an employee savings or retirement scheme offered by your company (PEE, PERCO, PERECO, PERU or even PEROB)4. Your bonus is then frozen for a period depending on the type of the scheme (except in cases of early release under the law).
Receive your value-sharing bonus immediately, in which case it may be subject to income tax (more information in ‘What tax rules apply?’).
Combine savings and bonus payments.
If you choose to save your value-sharing bonus, you can invest it, depending on the scheme(s) set up by your company, in:
A PEE for your medium-term projects (the bonus is frozen for five years);
and/or a PERCO/PERECO/PERU/PEROB to provide you with additional income when you retire (the bonus is frozen until this point).
Your bonus is then placed in the investment vehicles offered by your company, which you will have chosen based on your risk profile and investment horizon.
During the value-sharing bonus distribution period, you will be asked in advance what you wish to do with your value-sharing bonus and will have at least 15 days to make your choice.
If you do not make a choice within the specified time limit, your value-sharing bonus will be paid into your bank account. It will then be included in your taxable income and you may be subject to income tax and, as a result, your tax bracket may change.
Please note: You can release your savings from your profit-sharing bonus early in certain legal circumstances.
How are your savings invested ?
Your company offers you several investment vehicles covering different objectives and risk levels.
You will find these investment vehicles (along with the relevant documentation) in the documents relating to each scheme offered by your company.
In principle, you can change the allocation of your savings at any time to optimise your savings without extending the period for which they are frozen. This is known as arbitrage or changing your financial management in accordance with your scheme. However, certain restrictions may apply to your scheme. You should therefore consult the documents relating to each scheme (regulations or information notice) beforehand.
What is the tax regime applicable?
The tax treatment of your value-sharing bonus depends on the size of your company, your income and your choice at the time of allocation.
If your remuneration is greater than three times the value of SMIC (minimum wage) or you work for a company with more than 50 employees, your bonus placed in your employee savings or retirement scheme(s) is exempt from income tax and only subject to the CSG and CRDS social contributions.
If your remuneration is less than three times the value of SMIC and you work for a company with fewer than 50 employees, your bonus, whether or not it is placed in your employee savings or pension scheme(s), is exempt from income tax and CSG/CRDS.
You may be eligible for a contribution from your company5 (optional) which is exempt from income tax and subject to CSG and CRDS2on earned income.
If you withdraw your PEE/PERCO/PERECO/PERU/PEROB savings in a lump sum, any capital gains on your savings resulting from the value-sharing bonus are exempt from income tax and subject only to social contributions6.
1 The company covers the account maintenance fees for its current and retired employees (in accordance with the PEE agreement) during the year. These maintenance fees become the responsibility of the employee upon leaving the company.
2 Rate of 9.7%, including 6.8% CSG deductible as at 01/01/2025, contributions deducted by your employer.
3 If the company has set up a profit-sharing scheme (company with ≥ 50 employees) or a profit-sharing or incentive scheme (companies with < 50 employees).
4 Company Savings Plan (PEE, Plan d'Epargne Entreprise) / Inter-company Savings Plan (PEI, Plan d'Epargne Interentreprises); Collective Retirement Savings Plan (PERCO, Plan d'Epargne pour la Retraite COllectif) / Inter-company Collective Retirement Savings Plan (PERCOI, Plan d'Epargne pour la Retraite COllectif Interentreprises); Collective Company Retirement Savings Plan (PERECO, Plan d'Epargne Retraite d'Entreprise COllectif) / Inter-company Collective Retirement Savings Plan (PERECOI, Plan d'Epargne Retraite d'Entreprise COllectif Interentreprises); Single Retirement Savings Plan (PERU, Plan d'Epargne Retraite Unique); PEROB (Plan d’Epargne Retraite Obligatoire): Mandatory Retirement Savings Plan (participation bonus may be invested under certain conditions).
5 Optional, your value-sharing bonus may be matched by the following schemes: Company Savings Plan (PEE, Plan d'Epargne Entreprise) / Inter-company Savings Plan (PEI, Plan d'Epargne Interentreprises); Collective Retirement Savings Plan (PERCO, Plan d'Epargne pour la Retraite COllectif) / Inter-company Collective Retirement Savings Plan (PERCOI, Plan d'Epargne pour la Retraite COllectif Interentreprises); Collective Company Retirement Savings Plan (PERECO, Plan d'Epargne Retraite d'Entreprise COllectif) / Inter-company Collective Retirement Savings Plan (PERECOI, Plan d'Epargne Retraite d'Entreprise COllectif Interentreprises).
6 Rate of 17.2% as at 01/01/2025.
7 Assumption of a marginal case of 11%. Calculated on the net amount of deductible CSG and including the 10% flat-rate allowance for professional expenses.
8 Excluding the 1.75% allowance on CSG/CRDS for professional expenses (Article L. 136-2 of the Social Security Code).
9 Net amount of income tax deducted at source (the net amount of CSG deductible from the bonus must be declared by the company or the employee to the tax authorities).