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What retirement benefits are available to an employee?
Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)
You decide to retire or your employer retires you? You can receive a retirement allowance if you meet certain conditions.
What applies to you ?
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You're retiring
You are entitled to a retirement allowance if you decide to leave your company to retire and at least 10 years of service in the company.
Retirement allowance is commonly referred to as retirement bonus.
Please note
When you apply for retirement, you must comply with a notice period that is the same as the notice of termination.
The amount of your retirement allowance cannot be less than the following legal amount, depending on your seniority in the company:
Employee seniority | Amount of compensation |
|---|---|
10 years minimum and under 15 years | 1/2 month salary |
15 years minimum and under 20 years | 1 month salary |
20 years minimum and under 30 years | 1 and a half months salary |
At least 30 years | 2 months salary |
The salary taken into account to calculate your allowance is, depending on what is best for you:
- Or 12e of your gross remuneration for the last 12 months before retirement
- That's one-third of your gross compensation in the last 3 months. In this case, any annual or exceptional pay bonus or other element paid during these 3 months is recalculated over 3 months. For example, if you received an annual premium of €550, it shall be taken into account up to €137.50 (550 / 12 x 3).
A company or establishment agreement or convention or a collective agreement may provide more favourable amounts.
If you worked full-time and part-time in the same company, the allowance is calculated in proportion to the length of time you worked full-time and part-time.
Example :
You have worked 11 years in your company including 9 years full time then 2 years half time.
The best gross salary to calculate your severance pay is €1,200 at half-time, or €2,400 full-time.
Your severance pay will be calculated on the basis of the following salary: (2 400 x 9 / 11) + (1 200 x 2 / 11) = 2 181.82 and will therefore be equal to €1,090.91 (2,181.82 / 2).
The voluntary retirement allowance is subject to contributions (from Social Security, CSG: titleContent and CRD: titleContent) unless you decide to retire as part of a job safeguard plan (PSE).
It is taxable on income.
In addition to your voluntary retirement allowance, you can collect the following amounts (if you qualify):
- Allowance for Leave with Pay
- Advance compensation
- Financial compensation provided for in the event of non-competition clause
Your employer automatically retires you
If your employer decides you automatically retire, you are entitled to a retirement allowance.
Please note
You are also entitled to a notice of the same duration as the notice of termination.
The amount of your retirement allowance cannot be less than the following legal amount, depending on your seniority in the company:
- ¼ months salary per year of service for first 10 years
- salary month per seniority year from 11e year
The salary used to calculate the allowance, called reference salary, is, depending on what is most advantageous to you:
- This is the monthly average of your salary for the last 12 months before the day the letter of retirement was sent
- That's one-third of your salary in the last three months. In this case, any annual or exceptional pay bonus or other element paid during these 3 months is recalculated over 3 months. For example, if you received an annual premium of €550, it shall be taken into account up to €137.50 (550 / 12 x 3).
A collective agreement may provide for more favourable amounts.
Your seniority is calculated until the date of actual termination of your employment contract, that is, until the end of the notice, even if it is not completed.
If your seniority includes an incomplete year, the allowance is calculated in proportion to the number of full months.
Example :
For 12 years and 9 months and a reference salary €2,200, the minimum compensation shall be: [(2200 x 1/4) x 10] + [(2200 x 1/3) x 2 ] + [(2200 x 1/3) x (9/12)] = €7,516.67.
If you worked full-time and part-time in the same company, the allowance is calculated in proportion to the length of time you worked full-time and part-time.
Example :
You worked 5 years in your company including 3 years full time, then 2 years half time.
Your reference salary is €1,500 at half-time, or €3,000 full-time.
Your allowance is calculated as follows: (3000 x 1/4 x 3) + (1500 x 1/4 x 2) = €3,000.
Social contributions
Depending on the amount, your retirement allowance is subject to contributions (from Social Security, CSG: titleContent and CRD: titleContent):
- If less than €439,920, it shall be exempt from social security contributions on the part of its amount less than €87,984
- If it is greater than €439,920, it is fully subject to social security contributions
- The share of your allowance less than €87,984 is exempt from CSG and CRDS
- The share of your allowance greater than €87,984 is fully subject to CSG and CRDS (without reduction of 1.75%)
Income tax
Your retirement allowance is partially exempt from income tax.
Your tax-exempt portion of your allowance is whichever of the following three amounts is most advantageous to you:
- Minimum legal amount or amount provided for by the agreement or collective agreement
- Or 2 times the amount of annual gross compensation you received in the year before you retired, up to €205,680
- Or 50% the amount of your allowance up to €205,680 for allowances received in 2020.
In addition to your retirement benefit, you can collect the following amounts (if you qualify):
- Allowance for Leave with Pay
- Advance compensation
- Financial compensation provided for in the event of non-competition clause
Who can help me?
Find who can answer your questions in your region
For further information
Administrative information by telephone - Allo Public ServiceThe informants who answer you are from the Ministry of Labour.
Cost: Free Service
Attention: service not responding questions concerning unemployment compensation and the representations made to Pôle emploi, civil servants or contractors, the amount or payment of social, wage or employer contributions.
The service is available at the following times:
- Monday: 8:30 to 17:30
- Tuesday: 8:30 to 12:15
- Wednesday: 8:30 to 12:15
- Thursday: 8:30 to 17:30
- Friday: 1 pm to 4:15 pm
- Labour Code: Articles L1237-5 to L1237-8Sections L1237-6 and L1237-7: Employer Retirement
- Labour Code: Articles L1237-9 to L1237-10Retirement at the employee's initiative
- Labour Code: Article L3123-5
- Labour Code: Articles D1237-1 to D1237-2-3Retirement allowance (employee initiated retirement)
- Voluntary retirement benefitsUrssaf National Fund (ex Acoss)
- Employer's retirement allowanceUrssaf National Fund (ex Acoss)
- Statement of Retirement Benefits IncomeMinistry of Finance