In November 2021, the French government announced a raise of the ceiling for tax-free employee gift cards for 2021. This action was taken in the context of the health crisis. The objective is to increase the purchasing power of the French in these difficult times.
Why should I offer employee gift cards to my French employees ?
Showing employees your appreciation can help to improve the work moral and overall work culture. Events like Christmas mark the perfect time of the year to say thank you and gifts are a great way of showing recognition.
What is the tax-free amount for French employee gift cards in 2021?
Based on social security regulations, the exemption corresponds to 5 % of the monthly social security ceiling: 171,40 Euro.
Following the announcement of the government, in 2021 employers can now give vouchers of a value of 250 € to their employees. This is the second raise in the context of the health crisis. In 2020 the value was doubled to 342,80 €.
“This concerns nearly 8 million employees (…), it is an action taken for the purchasing power of the French,” announced the minister. Issuers of gift cards stated that the raise in December 2020 was followed by the distribution of 150 million euros in additional gift cards.
What are tax-free employee gift cards ?
Gift cards are vouchers issued by companies such as Cadhoc or Kadéos. Their use is restricted to certain brands and shops determined in advance. Most issuing companies provide a list of these brands on their website. The amount is limited so it won’t replace other salary elements such as a salary raise.
Which conditions have to be met for the exemption to apply ?
If the total amount of gift cards offered to an employee in a year respects the limit, no further conditions have to be met for the exemption to apply.
If the total total amount of gift vouchers received over a year by an employee exceeds the ceiling, they can still be exempted if all of the following 3 conditions are met:
1st condition: Awarded for an event
The gift voucher is awarded for an event defined by the social security body URSSAF:
Birth or adoption of a child
Marriage or PACS (contractual form of civil union)
Fathers and mothers day
Sainte-Catherine or Saint-Nicolas
Return to school of children under 26
2nd condition: Related to the event
The use of the gift cards must be related to the event. For instance, a voucher awarded for Christmas for children must allow access to goods related to this occassion such as toys.
3rd condition: Proportionate
The amount must be proportionate and must remain below 5% of the monthly Social Security ceiling per event and per calendar year.
What if the conditions are not respected ?
Note that if these conditions are not met, the vouchers are no longer exempted. The total amount from the first euro will then be integrated on the French Payslip and French Payroll Taxes and Contributions will be calculated.
Are there any formal requirements for employee gift cards ?
Gift vouchers must be issued by the works committee (CSE comité social d’entreprise) – or directly by the employer in the absence of a works committee (small companies).
Can I choose the recipients ?
A gift voucher must not have a discriminatory character. As such, they must be given to all members of a company or to a specific category of employees.