Overtime: how the government wants to encourage you to work more

To restore purchasing power to the French, one of the solutions of the government (and of the presidential majority) is to encourage employees to work more. As part of the examination of the finance bill for 2022 in the National Assembly, the president of the Renaissance group (ex-LREM), Aurore Bergé, voted, with the support of the executive, an amendment aimed at to raise the annual tax exemption ceiling for overtime and additional hours worked by employees, from the current 5,000 euros to 7,500 euros.

Originally, the deputies planned that this measure only apply to overtime worked between January 1 and December 31, 2022. But during the debates in the Senate, the adoption of an amendment by the general rapporteur LR de the Finance Committee, Jean-François Husson, made it possible to perpetuate the raising of the tax exemption ceiling. This second option, validated by the government, was retained in the final version of the PLFR 2022, which Parliament has just adopted, this Thursday, August 4.

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As a reminder, today, the General Tax Code (CGI, art.81 quater) exempts income tax within the limit of 5,000 euros per year per employee for overtime and additional hours worked. In addition, “the remuneration of overtime and additional hours benefits from an exemption from employee contributions”, specifies Bercy. What, for employees, to be encouraged to work beyond the legal duration of 35 hours per week (sometimes more, depending on a branch agreement or a decree). Raising the ceiling to 7,500 euros per year should encourage employees to work more, provided they obtain the agreement of their employer or respond to his request.


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Employer contributions

It should be noted that on the employers' side, there are no plans to abolish employer contributions. Tax-exempt and desocialized for employees, overtime is, in fact, subject to social security contributions for employers today. LR deputy Olivier Marleix recently clarified to Les Echos that he pleads for such a deletion “in order to reactivate this lever (overtime, editor's note) In the enterprises”. A small gesture has however been made for employers, within the framework of the bill for the protection of purchasing power: companies with 20 to 250 employees will benefit from a flat-rate reduction in their employer contributions (50 centimes per overtime worked). Such a provision is already in place in the smallest companies, with a reduction of 1.5 euros per additional hour.

The only question now is the cost of the system for public finances. As an indication, the government of Edouard Philippe had estimated, in 2019, that tax-exempt overtime (with a ceiling of 5,000 euros per year per employee) represents an effort of 3.8 billion euros per year for the community.

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