The rules for benefiting from the flat-rate deduction for professional expenses are tightening. The Walter France Social working group specifies the conditions which have become essential in order to benefit from this specific deduction for professional expenses, as well as the employer's obligations and the consequences of the end of Urssaf tolerance in December 2022.
The specific standard deduction (DFS) consists of a reduction in the contribution base, leading to an increase in the employee's net payable. This reduction ranges from 5% to 30% depending on the profession., within the limit of 7,600 euros gross per calendar year and per employee. Are particularly targeted, among others, construction professions, the artists, journalists and cabin crew. The application of the specific standard deduction cannot, however, have the consequence for each pay, to bring the base for calculating contributions below the minimum base for contributions. In practice, this “flat rate” deduction was aptly named, companies by allowing their employees to benefit without really examining the reality of the costs actually incurred by them. This flexibility will end. Indeed, the general principle which is recalled by the administration* is that the employer can now only apply the DFS if it has supporting documents demonstrating that the beneficiary employee actually incurs professional expenses. In the absence of costs actually incurred by the employee or if the employer covers or reimburses all professional costs, it is impossible to apply the DFS.
The conditions for benefiting from the reduction
To give businesses time to adapt, l’administration, fin 2021, extended the tolerance relating to this new doctrine by one year, until December 31, 2022, and clarified the conditions under which the system applies. The conditions for benefiting from the reduction are mandatory and cumulative. Belonging to a profession covered by the DFS : this is indeed a statutory advantage and not a sectoral one. The beneficiaries must therefore belong to the categories concerned by the provisions. The employer can opt for the DFS when a convention or collective labor agreement has explicitly provided for it or when the social and economic committee has given its agreement. In this case, the employer may review his option at the end of the year for the following year. Failing that, express agreement from the employee is required annually. The employer must obtain annually, by any means, the consent of its employees to be able to apply the DFS. This agreement can therefore no longer be definitively included in the employment contract..
Employer obligations
In the absence of a convention or collective agreement or favorable consultation of the CSE, it is now up to the employer to inform the employees concerned annually and ask for their written consent. Remember that the methods for obtaining employee consent provided for by the BOSS* came into force on January 1, 2022. However, in the event of an inspection relating to periods running until December 31, 2022, the organization will only make a request for compliance for the future, that the employer must ensure to respect. The employer is always required to inform the people concerned of the consequences of the application of the DFS on their rights. Indeed, the application of the specific standard deduction has direct effects on the net payable – which is then higher than if the DFS was not applied –, but also on social security rights (amount of daily allowances), Unemployed, to retirement and foresight which are, as far as they are concerned, calculated on the basis of the salary earned – rights are therefore reduced. The employer must have supporting documents demonstrating that the beneficiary actually incurs professional expenses., supporting documents which must be produced in the event of an inspection by the URSSAF or MSA services. Failing that, the DFS will be inapplicable.
Reinstatement must be effective from January 1, 2023
The general principle of application of the deduction for professional expenses is that the basis for calculating contributions is the total amount of remuneration, compensation, primes, gratifications, including, if applicable, compensation paid for reimbursement of professional expenses and benefits in kind. The URSSAF and the MSA, however, tolerated the reimbursement of certain costs without reinstatement in the social contribution bases.. These tolerances will disappear on January 1, 2023. These include :
-direct support by the employer from a third party (hotelier, restaurateur, taxi company…) expenses of the employee in a professional travel situation (accommodation costs, meal fees, taxi costs…) ;
-reimbursement of work clothing maintenance expenses ;
-reimbursement of expenses incurred by the employee as part of their participation, at the request of his employer and on an exceptional basis, to events organized within the framework of the company's commercial policy ; -reimbursement of expenses incurred by the employee or covered directly by the employer during duly justified business meals (except obvious abuse).
Exceptions to the principle of non-cumulation
However, the accumulation of the DFS and the non-reintegration of certain costs into the social security contribution base will remain admissible for the employer's contribution to the acquisition of meal vouchers within the limit of 5,55 euros (value 2021) and when the amount of the participation is between 50% and 60% of the value of the security. The same applies to the compulsory payment of the cost of transport tickets for Ile-de-France employees and 50% of the total or partial cost of the monthly subscription by provincial employers.. The principle of non-cumulation knows other exceptions. So, for example for journalists, night taxi costs when the travel time no longer allows the use of public transport, travel and living expenses of the journalist sent on mission, the employer's share of the professional identity card renewal file fees are not reinstated in the basis for calculating contributions.
Important consequences for employers and employees
These provisions will not be without consequences for the employer and for the employees concerned.. The end of tolerance at the end of 2022 risks leading to an increase in formality for companies with the annual collection of employee consents and the recovery of proof of professional expenses presented each month by employees. It also risks leading to a possible end to the system if the conditions for justifying the costs set out are not or no longer met.. The end of the tolerance would then represent an additional cost for the employer if the DFS was no longer applied, with a significant increase in payroll. It would also result in a loss of net salary for employees.. In any case, it risks leading to an increase in social charges : it will now be a matter of reintroducing professional expenses into the contribution base which were not included until December 31, 2022., such reintegration leading at the same time to a reduction in the reduction in employer contributions on low salaries known as the “FILLON Reduction”. The employers concerned must therefore imperatively anticipate, before December 2022, the consequences of the end of this tolerance, unless the system is revised under pressure from certain professional branches.
* BOSS (Official Social Security Bulletin) in its April 2021 update.
