An insight into discounts on company products sold to employees
In a competitive job market, it’s not all about the salary payment at the end of the month. Perks are a major consideration when looking for a job. They come in different forms. In France it is for instance common to offer meal vouchers. For special occasions, such as a marriage, birth of a child or Christmas, gift vouchers are a great way to show appreciation.
Other incentives that cannot be neglected are employee discounts in France, notably on company products or services. This is very common in the retail sector. Discounts on own products also enable the company to align its incentive scheme with its brand.
Exemptions on employee discounts in France
In France, these price reductions are exempt from social contributions and payroll taxes, if conditions are met.
Discounts on company goods and services
The supply of products and services produced by the company to its employees is exempt when the reduction granted does not exceed 30% of the normal retail price.
This must be assessed based on the selling price, all taxes included. The selling price is defined as the price practiced by the company for the same product or the same service sold to a consumer who is not an employee of the company.
When the products or services are offered to staff free of charge or at a discount exceeding 30% of the normal selling price, the entire amount must be subject to contributions and taxes. In this event, the total amount must be integrated on the French payslip. Both, employee and employer, will pay social contributions and taxes on this amount.
Price reductions on unsold items
In order to give a second life to products and to encourage companies to adopt an environmental sustainability policy, for unsold items a price reduction of up to 50% can be exempt.
This applies only to products originally intended for sale but which cannot or can no longer be sold. For example, in the clothing industry, this could apply to unsold items from the last season.
Contrary to the above mentioned 30%-rule, the 50%-rule for unsold products also applies to employees of the same group.
Further conditions apply.