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What is an incentive agreement?

In contrast to participation, profit-sharing is a non-mandatory mechanism that allows all employees and managers to be financially involved in the performance of the company. The profit-sharing agreement is characterized by its collective and random nature. It results in the payment to employees of sums of money called incentive bonuses. The implementation of a profit-sharing agreement makes it possible to win tax and social reductions for both the company and the employees. For the company:

exemption from employers' social contributions on the sums paid to the employees the profit-sharing is a deductible expense of the result the company For the employees: exemption of the social security contributions from the sums perceived with the profit-sharing (except Supplementary social Security contribution – Debt social reimbursement contribution) exemption from income tax if the incentive bonus is paid into a Corporate savings plan or a Collective retirement savings plan. Any company, whatever its turnover, its workforce and its legal form, can subscribe an incentive agreement. An incentive agreement must be concluded in the first six months of the financial year for a period of three financial years. It may, under certain conditions, be tacitly renewed at the end of this period. Consult Chafii Fiduciary Group for more information on the profit-sharing agreements.

What is an incentive agreement?

In contrast to participation, profit-sharing is a non-mandatory mechanism that allows all employees and managers to be financially involved in the performance of the company. The profit-sharing agreement is characterized by its collective and random nature. It results in the payment to employees of sums of money called incentive bonuses.

The implementation of a profit-sharing agreement makes it possible to win tax and social reductions for both the company and the employees.

For the company:

Exemption from employers' social contributions on the sums paid to employees the incentive is a deductible expense of the result the company.

For employees:

Exemption from social security contributions from the sums received for profit-sharing (excluding supplementary social security contribution/ Debt social reimbursement of the contribution).

Exemption from income tax if the incentive bonus is paid into a corporate savings plan or collective retirement savings plan).

Any company, whatever its turnover, its workforce and its legal form, can subscribe an incentive agreement.

An incentive agreement must be concluded in the first six months of the financial year for a period of three financial years. It may, under certain conditions, be tacitly renewed at the end of this period.

Consult Chafii Fiduciary Group for more information on the profit-sharing agreements.

Chafii Fiduciary Group, accounting firms in Paris, Montpellier, Lyon, Marseille, Colmar, Nice and Avignon, accompanies entrepreneurs in acquisition operations. The group has all the necessary skills and partners (legal and tax advice, bank financing, forecasting, etc.) to help entrepreneurs to carry out such an operation.

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