An insight into mandatory transport refunds in France
France provides for a large range of tax-free employee benefits. Some are optional, some are mandatory.
Mandatory transport refunds in France
Employers, regardless of their staff headcount, are obliged to financially support their employees when it comes to their expenses for public transport. As soon as employees, as well as interns and trainees, use public transport (metro, bus, train, etc.) to get from home to work, and back, the employer must participate 50% of the costs.
Tax-free and exempt from contributions
The employer refund of 50% of the transport ticket is fully exempt from social contributions and payroll taxes in France under the condition that a receipt of the subscription is provided. This will be requested by French authorities in case of an audit. The refund is usually done on a monthly basis, including for refunds of annual tickets. It must be mentioned on the French payslip.
Temporary increase of the exemption limit to 75%
As one of the recent measures to help households scope with rising prices, the tax-free threshold for the transport refund is temporarily increased by 25% to 75%. This applies to refunds for tickets relating to 2022 and 2023.
It is on a voluntary basis. The minimum, mandatory employer participation remains at 50%. It is expressly allowed to combine the 75% public transport refund with the commuting allowance, a tax-free optional payment by the employer to employees commuting with a private car.
Example: Transport refund ‘Pass Navigo’
It is estimated that more than 40% of employees in the larger Paris area, also referred to as Île-de-France, commute by public transport from home to work. Employees can request the refund of the so-called ‘navigo pass’. For a monthly ticket of € 75.20, employers must refund €37.60. Optional, in 2022 and 2023, employers can now refund € 56.40 fully exempt from social contributions and taxes.