Social Security in France 2026

At the beginning of 2026, legal certainty has now been fully established: the French Loi de financement de la sécurité sociale (LFSS) for 2026 was adopted before the end of 2025 and published in the Journal officiel of 31 December 2025. Contrary to many expectations, the legislative process successfully passed both the parliamentary stages and the review by the Conseil constitutionnel in due time. The Constitutional Council validated the vast majority of the provisions submitted for review.

The LFSS 2026 introduces numerous structural changes in social security, labour and contribution law, with direct relevance for employers, HR departments and internationally operating companies. Below, we summarise the key measures in a structured overview.

Substitute DSN – Corrections by Social Security Authorities (Art. 5)

Where an inconsistency is identified within the framework of the Déclaration Sociale Nominative (DSN) and remains unresolved after completion of the adversarial procedure, the collection bodies will be authorised to carry out the necessary corrections themselves. The detailed conditions and procedures will be specified by decree to be issued by the Council of State.

Old-Age Contribution Malus for Large Companies (Art. 11)

Companies with at least 300 employees and an established trade union section are required to conduct negotiations every four years on employment, working conditions and the integration of senior employees.

If no agreement is reached, at least an annual action plan must be implemented. Failure to comply will result in a malus on old-age insurance contributions, the level of which will be determined by regulation based on clearly defined criteria, taking into account the company’s efforts in favour of senior employment and the reasons for non-compliance.

Increase in CSG on Investment Income (Art. 12)

The rate of the Contribution Sociale Généralisée (CSG) on income from assets is increased to 10.6%, subject to the statutory exceptions provided for in the law. Consequently, the total rate of social contributions rises to 18.6%, and the flat tax (Prélèvement forfaitaire unique, PFU) now amounts to 31.4%.

Higher Employer Contributions on Mutual Termination Indemnities (Art. 15)

Indemnities paid in connection with mutual termination agreements (rupture conventionnelle) as from 1 January 2026 are subject to an employer contribution of 40% (previously 30%).

This increase also applies to indemnities paid in the context of retirement termination.

Reform of General Employer Contribution Reliefs (Art. 20)

In sectors where the collectively agreed minimum wage at the first classification level is below the statutory SMIC, the calculation of employer contribution relief will henceforth be based on the collective minimum wage rather than the SMIC, provided this method is less favourable for the employer.

This specific calculation rule applies only where it results in a disadvantage for the company and aims to encourage alignment between collective and statutory minimum wages.

Extension of the Flat-Rate Employer Deduction for Overtime (Art. 21)

As from 1 January 2026, the flat-rate employer deduction applicable to overtime hours is extended to companies employing 250 employees or more.

Refocusing of Aid for Business Creation and Takeover (Art. 23)

The aid scheme is refocused on the most vulnerable groups, in particular:

• business creators registered as jobseekers
• entrepreneurs establishing businesses in designated France ruralités revitalisation “plus” areas

The exemption rate is reduced to 25% (previously 100%) and applies only to remuneration up to 75% of the social security ceiling.

Stricter Penalties for Undeclared Work (Art. 44)

For procedures initiated from 1 June 2026 onwards, penalties relating to undeclared work (travail dissimulé) will be significantly increased.

Limitation of the Duration of Sick Leave Prescriptions (Art. 81)

As from 1 September 2026, the duration of sick leave certificates will be capped:

• 1 month for an initial prescription (minimum duration, to be specified by decree)
• 2 months for a renewal

Physicians will be required to document not only the medical elements but also the reasons justifying the work stoppage.

Creation of an Additional Birth Leave (Art. 99)

An additional birth leave is introduced for the benefit of each parent:

• Duration: 1 or 2 months, at the parent’s choice
• Split option: may be divided into two periods of one month each
• Combination: parents may take the leave simultaneously or alternately

This allows for up to 4 months of parental care in total. The measure applies to children born or adopted from 1 January 2026 onwards, including cases of premature birth where the expected date fell after that date. Due to short implementation timelines, effective use of this additional leave will only be possible from 1 July 2026, with exceptional grace periods granted to parents of children born up to 31 May 2026.

Overhaul of the “Employment–Retirement Combination” Scheme (Art. 102)

An unrestricted combination of employment and retirement benefits will only be possible from the age of 67.

Before that age, the following restrictions apply:

• Before 64: full reduction of the retirement pension
• Between 64 and 67: partial reduction (a tax-free allowance of up to approximately €7,000 may apply, with thresholds to be set by decree; beyond this, 50% of the income will be deducted from the pension)

The new regime applies to pensions liquidated from 1 January 2027 onwards.

Suspension of the Pension Reform (Art. 105)

The minimum retirement age of 64 years applies only to insured persons born on or after 1 January 1969. Earlier cohorts benefit from transitional arrangements.

Tips and Public Transport Contributions: Transitional Regime for 2026

Employers may continue on a transitional basis in 2026 to apply the social security and tax exemptions in force in 2025:

Tips

• Tips remain exempt from social security contributions and income tax provided that:
• they are paid voluntarily by customers
• the employee is in direct contact with customers
• the employee’s monthly remuneration does not exceed 6 times the SMIC

Public transport and bicycle subscriptions

• Employer contributions remain exempt:
• from social security contributions (including optional contributions above 50%, subject to conditions), up to the actual costs incurred
• from income tax (including optional contributions above 50%), up to 75% of the cost

These transitional measures apply until the final adoption of the Finance Act for 2026.