the government backs down on exemptions from charges

The government will review exemptions from payroll taxes, but not as much as planned in the initial draft budget. The idea of ​​facilitating wage increases is falling by the wayside.

Originally, the government planned to eliminate most of the reductions in employer contributions, that is to say the aid that employers benefit from on certain salaries. Today, this aid applies to salaries between 1 and 3.5 times the minimum wage, therefore for remuneration between 1,426 euros net monthly and up to almost 5,000 euros. Currently, for these salaries, companies pay less employer contributions; these advantages had been put in place to encourage them to hire.

The problem is that this aid encourages employers to keep their staff at the bottom of the pay scale. Because there are thresholds with perverse effects. For example, when he hires an employee at 1.59 minimum wage, the boss benefits from 13 points of exemption from contributions, whereas if he increases the salary just above, to 1.61 minimum wage, he receives half as much. help. The idea was therefore to remove all these threshold effects to encourage bosses to move their teams forward more easily in the grid to “de-microcardize” France. In the process, the government intended to make savings.

But the government will partly back down. He faces the bronca of the bosses, who are worried about the future social plans and the outcry of the deputies of the central bloc. He decided to review his copy and leave the current exemptions on the lowest salaries, that is to say up to 2.5 minimum wage, or up to 3,500 euros net. It will, however, remove aid for the levels above. Therefore, employers will pay a high price for salaries above 3,500 euros net.

The ambition to facilitate wage increases is falling by the wayside. This idea of ​​“de-micardizing” is disappearing. Because ultimately, this solution does not change anything for salaries at the bottom of the scale. Enough to further fuel the anger of the unions who have long demanded that aid to businesses be eliminated or at least conditioned. The bosses are not very happy either, because even if they save part of it, they will still lose help.

Also, the government will bring less money into the coffers. The initial blow was to bring in 4 billion euros, it will probably be half as much, around 2 billion. But this is the price, for the Barnier government, of obtaining a compromise.