France’s social security financing act for 2026 (“loi de financement de la sécurité sociale”, LFSS) was published in the Journal officiel of 31 December 2025. Against many predictions it cleared every parliamentary stage on time, and the Constitutional Council upheld the bulk of it.
Nine measures bear directly on employers. Some have applied since 1 January, others are staggered through to September.
| Article | Measure | From |
|---|---|---|
| art. 15 | Employer contribution on negotiated termination payments: 40 instead of 30 per cent | 1 January 2026 |
| art. 21 | Flat-rate deduction on overtime extended to businesses of 250 employees and more | 1 January 2026 |
| art. 23 | Start-up relief refocused, exemption rate cut from 100 to 25 per cent | 1 January 2026 |
| art. 99 | Supplementary birth leave for each of the two parents | births and adoptions from 1 January 2026 |
| art. 44 | Tougher penalties for undeclared work | proceedings from 1 June 2026 |
| art. 81 | Cap on the length of sick leave | 1 September 2026 |
| art. 5 | Collection bodies correct “DSN” anomalies themselves | decree awaited |
| art. 11 | Penalty on old-age contributions, businesses of 300 employees and more | amount set by regulation |
| art. 20 | Contribution relief calculated on the agreed minimum rather than the statutory one | in force |
What applies from 1 January 2026
The employer contribution on severance under a negotiated termination rises from 30 to 40 per cent. The same increase applies to payments made on compulsory retirement. Any business planning a negotiated exit sees the difference on the first case.
Start-up and business transfer relief is refocused on founders registered as jobseekers and on projects in “France ruralités revitalisation plus” areas. The exemption rate falls from 100 to 25 per cent, and applies only to pay below 75 per cent of the social security ceiling.
What comes later in the year
From 1 June, penalties for undeclared work are markedly tightened for proceedings started after that date.
From 1 September, the length of sick leave is capped: one month for a first prescription, two months for an extension. The doctor will have to state the reasons justifying the leave alongside the medical details.
What still waits on a decree
Collection bodies may now themselves correct an anomaly in the monthly combined return (“DSN”) that survives the adversarial phase. The detail will be set by decree taken after consulting the Conseil d’État.
Businesses with at least 300 employees and a union branch must negotiate every four years on employment and working conditions for experienced staff. Failing an agreement, an annual action plan is required. With neither in place, a penalty applies on old-age contributions.
The point to check sector by sector
The reform of general contribution relief carries a rule that is easily missed. In sectors where the first-step collectively agreed minimum sits below the statutory minimum wage (“SMIC”), relief is calculated on that agreed minimum rather than on the statutory one, where that calculation is less favourable to the business.
A collective agreement lagging behind the statutory minimum wage therefore costs the employer who applies it. That is the first thing to check, because it turns on the sector rather than on the company. See payroll and HR
Source: loi de financement de la sécurité sociale pour 2026, Journal officiel of 31 December 2025. Position as at 6 February 2026.