Reform of on-the-job training

Newsletter - June 2015

Law no. 2014-288 passed on 5 March 2014 reformed the way that the employer finances on-the-job training. The taxation authority detailed these new rules when it updated its BOFIP database on 6 May 2015.

The principle

The law introduces a single contribution which replaces the contributions that were previously payable for on-the-job training. The full payment of expenses system is eliminated and surpluses are no longer able to be carried forward.

The value of the single contribution is set in the following way for compensation paid to employees since 1 January 2015:

– 0.55% of the compensation paid over the year, for companies with fewer than 10 employees;
– 1% of the compensation paid over the year, for companies with 10 or more employees;
– 1.3% of the compensation paid over the year, for temporary placement firms.

Employers with at least 10 employees will now be able to enter into an enterprise-level agreement for a period of three years with the commitment to devote at least 0.2 of the compensation paid over each of the years covered by the agreement to the funding of the personal training account (“CPF”) of their employees and to matching it. In such a situation, the contribution rate will be reduced to 0.8%.

The rates set by the law are minimums, and certain sectors will have to plan for higher requirements.

Moreover, a rate smoothing system is set up when the threshold of 10 employees is crossed so as to avoid a “threshold effect.”

More than 10 employees prior to 1 January 2015

A declining scale exists depending on the date on which the threshold was crossed, and it if was crossed:

– in 2010 or in 2011: the applicable rate is 0.90% in 2015, then 1% thereafter;
– in 2012: the applicable rate is 0.70% in 2015, 0.90% in 2016, then 1% thereafter;
– in 2013: the applicable rate is 0.55% in 2015, 0.70% in 2016, 0.90% in 2017, then 1% thereafter;
– in 2014: the applicable rate is 0.55% in 2015 and 2016, 0.70% in 2017, 0.90% in 2018, then 1% thereafter;

More than 10 employees after 1 January 2015

If the threshold is crossed after 1 January 2015, for the first time, the applicable rate remains the same for the first three years, i.e. 0.55%. In the fourth year, the rate increases to 0.70%, and in the fifth year, it is 0.90%. This arrangement, however, is not intended for employers who may exceed the threshold from their first year of business.

Reporting requirements and payment

The special report on participation in on-the-job training has been eliminated for employers with at least ten employees. The information required for reporting participation will now be sent via the DADS – annual declaration of workforce data.

Employers will state on the DADS (a) their status as taxpayer and (b) the basis for tax in respect of the compensation paid over the calendar year prior to the date of filing of the DADS. The DADS filing deadline is fixed at 31 January 2016 (for salaries paid in 2015), so the taxable basis will be determined by the salaries and compensation payments paid in 2015.

Companies are required to pay their single contribution for the first time on 1 March 2016 to the joint collection account, or “OPCA” (“Organisme Paritaire Collecteur Agréé”) that is appointed by the industry agreement governing them or, if there is not one, to an “inter-industry” OPCA. The OPCA will finance companies’ training costs using the amounts collected and pooled.


Employers that are required to contribute to the financing of on-the-job training but that do not comply with their obligations within the time frames provided must pay the “Trésor Public” an amount equalling or doubling the omitted contribution.

We are entirely available if you have any further queries about the issues discussed in this newsletter or about any other accounting, tax, social security or law related topic.