French Retirement Savings Plan (PER) 2026: Compartments, Deduction Caps and Exit Taxation

The French retirement savings plan (PER) combines three compartments and makes voluntary contributions deductible from taxable income, up to 37,680 € in 2026 for an employee. Benefits are paid at retirement as capital, as an annuity or both, with taxation depending on whether contributions were deducted. Eight early withdrawal cases remain open beforehand, including the one created on 12 June 2026 for a seriously ill child.

Preparing for retirement is a major challenge for company directors and self-employed workers, whose basic state pension is often lower than that of employees. The 2019 PACTE Act profoundly simplified the French supplementary retirement savings landscape by creating the Plan d'Epargne Retraite (PER), which replaced previous products: PERP, Madelin contracts, PERCO and article 83 plans.

In 2026, the PER has established itself as the reference product for building a supplementary retirement while benefiting from an immediate tax advantage. For self-employed workers, it opens a specific deduction cap, computed on the profit of the year of payment.

This comprehensive guide explains how the PER works, its tax advantages, exit conditions, succession rules and the early withdrawal cases.

The 2019 PACTE Reform#

The PACTE Act (Plan d'Action pour la Croissance et la Transformation des Entreprises), adopted in May 2019, created the PER from 1 October 2019 for new products, and ended the marketing of the former products (PERP, Madelin, PERCO, article 83) on 1 October 2020. Savings already accumulated on those contracts can still be transferred into a PER, with no deadline.

Objective: to simplify and harmonize supplementary retirement savings regimes, which were previously fragmented into numerous products with incompatible rules.

What the PER Replaces#

Compartment 1: Voluntary Contributions (Individual PER)#

The first compartment receives voluntary contributions made by the holder. This is the core of the individual PER (formerly PERP/Madelin). These contributions can be deducted from taxable income within legal limits.

Compartment 2: Employee Savings (Collective PER)#

The second compartment groups amounts from:

• Profit-sharing (interessement) and participation;
• Employer matching contributions (abondements);
• Transfers from a PERCO.

These contributions are generally not deducted from taxable income (they benefit from other tax and social exemptions at the time of payment).

Compartment 3: Mandatory Contributions (Categorical PER)#

The third compartment receives mandatory employer and/or employee contributions under a company categorical retirement scheme (formerly article 83). These amounts are not available before retirement (except in early withdrawal cases).

Deduction Cap for Employees#

Voluntary contributions to compartment 1 are deductible from taxable income up to the individual deduction cap, which is the higher of the two following amounts:

• 10% of prior-year net professional income, capped at 10% × 8 PASS = 10% × 8 × 47,100 € = 37,680 € for 2026;
• 10% of prior-year PASS = 10% × 47,100 € = 4,710 € (minimum applicable even without income).

Example: An employee receiving net income of 60,000 € in 2025 can deduct up to 10% × 60,000 € = 6,000 € in PER contributions in 2026.

The cap is computed individually, for each member of the tax household, and must be reduced by contributions paid to other mandatory supplementary retirement schemes (article 83). Pooling is not automatic: it is an option open to married or PACS couples filing jointly (CGI art. 163 quatervicies, I, 2), who may then deduct up to the combined total of each partner's own cap.

Enhanced Deduction Cap for Self-Employed Workers (TNS)#

Self-employed workers (TNS) benefit from a more favorable deduction cap, calculated as follows:

• 10% of taxable profit up to 8 PASS, plus;
• 15% of the portion of profit between 1 PASS and 8 PASS.

Example: self-employed worker whose 2026 taxable profit reaches 100,000 €:

• 10% × 100,000 € = 10,000 €
• 15% × (100,000 € - 48,060 €) = 15% × 51,940 € = 7,791 €
• Total cap: 17,791 €

The article 154 bis cap is based on the taxable profit of the year of payment and on that same year's PASS, i.e. 48,060 € in 2026, not on the prior-year figures.

This superior advantage makes the individual PER a major optimization tool for high-income self-employed workers.

Employee or self-employed: which PASS, which year?#

This is the most common confusion, and it is costly in both directions. The two caps rest neither on the same base nor on the same PASS.

Two practical consequences follow. First, the 37,680 € and 4,710 € published by the tax authorities for 2026 are indeed based on the 2025 PASS: recomputing them on 48,060 € produces a wrong figure. Second, the two regimes do not stack on the same contribution: a self-employed worker who deducts it from professional profit under article 154 bis cannot deduct it a second time from overall income under article 163 quatervicies.

Capital Exit#

A full capital exit is possible for compartments 1 and 2, whereas the former PERP capped it at 20% of the contract's surrender value (except for first-time main-home buyers):

If contributions were tax-deductible:

• The capital portion corresponding to contributions is taxed at the progressive income tax scale, without the 10% pension allowance (CGI art. 158, 5-b quinquies-1°) and exempt from social levies;
• Capital gains are subject to PFU of 31.4% (12.8% IR + 18.6% social contributions).

If contributions were not tax-deductible:

• The capital portion corresponding to contributions is exempt from IR;
• Capital gains are subject to PFU of 31.4%.

Annuity Exit#

The annuity is subject to IR in the pension and retirement income category (with a 10% deduction, capped), net of social contributions:

If contributions were deductible: annuity fully taxable as pension income. If contributions were not deductible: annuity partially exempt according to life annuity purchase tables.

Note: how much to pay in, how the entry and exit marginal tax rates compare, and whether to stagger the payout are case-by-case decisions. We quantify that trade-off in our dedicated article: PER for company directors 2026: retirement tax optimisation.

The four exit configurations#

For an annuity built on non-deducted contributions, the taxable fraction depends on the age at which payments start: 70% before 50, 50% from 50 to 59, 40% from 60 to 69, and 30% from 70 onwards.

The PER provides eight cases of early withdrawal before retirement age (article L. 224-4 of the French Monetary and Financial Code). The most recent one was created by article 4 of Law no. 2026-492 of 12 June 2026 and has applied since 14 June 2026:

1. Death of the spouse or PACS partner;
2. Disability of the holder, their spouse or their children (2nd or 3rd category within the meaning of article L. 341-4 of the French Social Security Code);
3. Over-indebtedness of the holder;
4. Expiry of the holder's unemployment insurance entitlements, with no judicial liquidation required; point 4° also covers a holder who has served as a board member, management board member or supervisory board member, who has not drawn a pension from a mandatory old-age scheme and who has held neither an employment contract nor a corporate office for at least two years from the non-renewal or removal of that office;
5. Judicial liquidation of the holder's business (TNS);
6. Purchase of the primary residence (only for voluntary contributions and employee savings, compartments 1 and 2);
7. Serious illness, disability or particularly serious accident affecting a dependent child of the holder: codified as 2° bis of article L. 224-4, this case comes from Law no. 2026-492 of 12 June 2026;
8. Holder under eighteen at the date of the request (article L. 224-4, 7°): this only covers PER opened in a minor's name before 1 January 2024, individual PER having since been reserved to adults (article L. 224-28 of the same code).

The first five cases in this list, together with the seriously ill child case, correspond to points 1° to 5° of article L. 224-4, I, to which CGI article 81, 4° bis refers: sums released on those grounds are exempt from income tax, only the gains bearing social levies. Early withdrawal to buy a primary residence follows the different regime set out below.

Warning: an early withdrawal to buy a primary residence is always paid out as capital. Where contributions were deducted, the contribution portion is taxed at the income tax scale without the 10% allowance but remains exempt from social levies; the gains are taxed at the 31.4% flat tax.

PER in insurance form (the most common on the market) follow their own transmission regime on the holder's death:

• The trigger is not the liquidation of the plan, but the holder's age at the date of death:
  • Death before age 70: levy under CGI art. 990 I, after a 152,500 € allowance per beneficiary, across all contracts;
  • Death after age 70: inheritance tax under CGI art. 757 B on all sums paid out, and not merely on the premiums as in ordinary life insurance, after a single 30,500 € allowance. In that second case the amounts are therefore not outside the estate.

The advantage is real where death occurs before age 70; beyond that age the insurance PER becomes less favourable than life insurance, where only the premiums paid after 70 are taxable.

One calendar rule applies to every director: for a self-employed worker, the contribution must be paid before 31 December to be deductible from the current fiscal year.

Everything else is case-specific: the amount to pay in, how it interacts with remuneration and dividends, how the entry and exit marginal tax rates compare, and the form of the payout. Those parameters are quantified, not generalised.

Further reading: PER for company directors 2026: retirement tax optimisation.

• The PER replaces all previous supplementary retirement products (Madelin, PERP, PERCO, article 83);
• Voluntary contributions are deductible from taxable income within annual caps;
• TNS workers benefit from a higher deduction cap than employees;
• Exit is possible in capital or annuity form, with taxation depending on whether contributions were deductible;
• Early withdrawal for primary residence purchase is available for compartments 1 and 2;
• PER insurance falls under CGI art. 990 I if the holder dies before 70, and under art. 757 B thereafter: the age at death governs, not whether the plan was liquidated.

(Sources: impots.gouv.fr, service-public.gouv.fr, Légifrance CMF art. L224-1 to L224-8 and art. L224-4, Law no. 2026-492 of 12 June 2026, CGI art. 81, 163 quatervicies, 154 bis, 158, 990 I and 757 B, BOFiP BOI-ANNX-000513 updated 17 February 2026.)