New measure to increase purchasing power: Optional monetarization of French RTT days
Over the last months, the French government introduced several measures to help households scope with increasing consumer prices. Besides an optional early and flexible release of company bonus from a savings plan and an optional tax-free PEPA bonus of €6000, companies can now purchase non-taken RTT days from their employees.
Monetarization of French RTT days
This measure concerns RTT days, established by law when the French legal working time was reduced to a 35-hour week. Currently, with some exceptions, these RTT days are lost if not taken by the employee during the year.
Conditions of purchase of RTT days
RTT days relating to the period from 1er January 2022 to 31 December 2025 can now be purchased by the employer. Just like overtime hours, RTT days are subject to a markup.
Social contributions and taxes on monetarized French RTT days
The monetarized RTT days as well as extra hours can be tax-free within an annual limit. As part of the recent measures, this limit was increased from €5000 to €7500 per year with retroactive date as of 1st of January 2022. In addition, the RTT days are exempt from certain employee social contributions. Depending on the company’s staff headcount, a flat sum deduction may apply to the employer social contributions and payroll taxes.
Optional monetarization of RTT days – no obligation
Employees can request the monetarization of all or some of their RTT days. It is up the discretion of the employer to accept the request of the employee. The employer does not have to justify his refusal; neither can he impose the monetarization of RTT days.
Several measures were recently introduced to increase the purchasing power during this time of historically high inflation; many of which impact the French payroll.