Profit-sharing in SMEs: implementation and tax advantages

Updated March 2026 - Since the PACTE law of 2019 and its successive relaxations, profit-sharing is no longer reserved for large companies. SMEs with fewer than 50 employees can now implement it by simple unilateral decision of the employer - without collective agreement or union. A powerful lever to motivate your teams, reduce social charges and optimize your remuneration policy.

Profit-sharing is an employee savings system which associates employees with the results or performance of the company. It takes the form of an annual (or sub-annual) bonus calculated on contractually defined indicators.

Key Features:

• ▸Random: the bonus is only paid if the objectives are achieved
• ▸Collective: it concerns all employees (subject to a maximum seniority of 3 months)
• ▸Non-substituting: it cannot replace an existing salary element
• ▸Optional: employees can choose to receive their bonus immediately or place it on a PEE / PERCOL

Hayot Expertise Advice: Profit-sharing is often confused with participation (compulsory in companies with 50 or more employees) and with discretionary bonuses. These three mechanisms have very different tax and social regimes. A poorly structured plan can lead to a URSSAF (French social contributions authority) recovery.

All companies, regardless of their size or legal form (SASU (Single-member simplified joint-stock company), SAS, SARL, SA, associations, cooperatives, etc.), as long as they employ at least one employee.

Since the PACTE law:

• ▸Companies with less than 50 employees can implement profit-sharing by unilateral decision of the employer (DUE) for a maximum period of 5 years (renewable)
• ▸No collective agreement or staff representative is required
• ▸The DUE must simply be submitted on the TéléAccords platform (DREETS)

For companies with 50 employees or more:

• ▸Profit-sharing must be established by collective agreement (industry agreement, company agreement with staff representatives, or agreement ratified by referendum of 2/3 of the employees)

This is where profit-sharing becomes particularly attractive for the employer and the employee.

Employer side

In practice: paying €10,000 in profit-sharing costs the employer around €10,000. Paying the equivalent in gross salary represents a total cost of €14,200 (with employer contributions at 42%).

The profit-sharing bonus is also fully deductible from the company's taxable income. For companies with IS, this directly reduces the corporate tax base. Coordination with your financial management strategy is therefore essential.

Employee side

• ▸Exemption from employee social contributions (excluding CSG/CRDS at 9.7%)
• ▸IR exemption if the sums are placed in a PEE or a PERCOL for at least 5 years
• ▸IR taxation if the sums are received immediately (but without social charges)

Concrete example: For an incentive bonus of €3,000 placed on a PEE:

• ▸Employee contributions: €0 (compared to ~22% on a salary)
• ▸IR: €0 (savings blocked for 5 years)
• ▸Only the CSG and CRDS are due: €291
• ▸Net received in the long term: €2,709 ”” compared to approximately €1,950 for an equivalent in net salary

This is the most delicate point of installation. The formula should be:

• ▸Random (amount cannot be guaranteed in advance)
• ▸Variable depending on actual results
• ▸Verifiable on the basis of accounting or extra-accounting data
• ▸Understandable by employees

Examples of common formulas

Based on tax result:

Bonus = (Tax result before IS ”“ Trigger threshold) × Participation rate

Based on turnover:

Bonus = Realized turnover × Profit-sharing coefficient (if turnover > objective N-1 + X%)

Based on performance indicators (KPI):

Bonus = Overall envelope × (KPI score achieved / KPI target score)

The legal ceiling for the individual premium is set at 75% of the annual PASS (i.e. approximately €34,776 in 2026).

The overall profit-sharing envelope cannot exceed 20% of the company's annual gross payroll.

1. Choose the installation method

• ▸DUE (Unilateral Employer Decision) if < 50 employees
• ▸Collective agreement if ≥ 50 employees

2. Write the agreement or EUD

The document must contain:

• ▸The duration of application (1 to 3 years for collective agreements; up to 5 years for the DUE)
• ▸Establishments and employees covered
• ▸The calculation and payment period
• ▸The calculation formula and control methods
• ▸The terms of distribution between employees
• ▸The conditions of deposit on a PEE or PERCOL

3. Submit the agreement on TéléAccords

The deposit must take place before the first day of the second half of the calculation period. An annual agreement must therefore be submitted before June 30 of the reference year to be valid for that financial year.

4. Inform employees

Each beneficiary employee receives an individual form indicating the amount calculated, the withdrawals made and the options available (immediate collection or investment).

To find out more about your employee savings and payroll obligations, consult our article on employer HR obligations in 2026.

👉 Our experts support the implementation of your employee savings plan

The president of SASU, as the sole partner, cannot be a beneficiary of the profit-sharing agreement if he is the sole employee. Employee savings schemes require at least one employee other than the manager to be valid.

On the other hand, as soon as the SASU employs at least one employee, the president can be included in the profit-sharing plan ”” and benefit from the same exemptions. This is an element to be integrated when thinking about the choice of legal status and the remuneration strategy.

Profit-sharing is one of the rare mechanisms allowing you to share value with your teams while reducing the overall cost of remuneration. Made accessible to all SMEs since the PACTE law, it nevertheless remains underused ”” often due to ignorance of the mechanism or fear of legal complexity.

📞 Do you want to set up a profit-sharing agreement adapted to your company? Our firm takes care of the drafting, filing and monitoring of your employee savings plan. Contact us to discuss

(Reference sources for this file: URSSAF, Ministry of Labor ”” TéléAccords service, PACTE Law n° 2019-486, Labor Code ”” articles L. 3312-1 to L. 3315-5)