How to correctly calculate apprenticeship taxes?

The “professional future” law, passed in 2020, ensures the payment of all professional-training-related contributions directly to the Social Security and Family Allowances Recovery Union (“Union de Recouvrement pour la Sécurité Sociale et les Allocations Familiales” URSSAF in French). But, the transitional period, extending until the end of 2021, leaves the skills operator (“Opérateurs de competences” OPCO in French) in charge.

Who pays this contribution?

All companies which are subject to corporation or income taxes and having at least one employee should pay this contribution. Therefore, this issue concerns almost all businesses except agricultural businesses and those whose main activity is education. Having apprentices within the staff is a way to be exonerated of the apprenticeship taxes’ calculation. Therefore, this can be a smart strategy to benefit from having an under-training workforce while reducing the paid contributions.

The new tax calculation

In 2020, the apprenticeship contribution has changed its formula: Until then, it consisted of paying the tax on the basis of the yesteryear, regardless of the size of the company. The calculation basis is the wage bill for the purpose of social security, which is the sum of taxable earnings and Income in kind paid by the company. This calculation formula changes in 2020, making it a blank year.

The required tax to pay in 2021 would be 0,5916 % of the total wage bill of 2020. From this calculated amount, 87% are destined to finance trainings, which is previously referred to as “levy”. The remaining 13% are reserved for technological and professional educational institutions.

There is an additional contribution for companies having more than 250 employees and employing more than 5% of their average workforce. This extra contribution varies between 0.05% and 0.60% of the total wage bill.

A simplified declaration

Following the changes and automations related to the DSN project (Registered Social Declaration), it is no longer necessary to fill out a specific declaration form for this tax. The administration automatically applies the DSN’s data in order to determine the criteria of this tax. This contribution must be paid before the 1st of March of each year in order to avoid any increase in the amount in the case of late payment.

However, a certain amount of expenses can be deducted from the contribution calculation. These are the professional insertion funds, technological and professional trainings’ funds, as well as the equipment renewal. It should also be noted that the subsidies paid in favor of apprenticeship training centers (“Centres de Formation d’Apprentis” CFA in French) are also a way to get exonerated of this contribution.

During this transition to simpler administrative processes, the URSSAF is expected to take charge of this contribution’s recovery starting from the 1st of January 2022, as well as other taxes. This administrative simplification limits the intermediaries and the different payments, but it also assures an enhanced mean of control to the state on the amount of professional trainings. The objective is to make this process as simple and automatic as possible in order to reduce the companies’ bureaucracy, regarding that small businesses are having a hard time ensuring these time-consuming obligations. Of course, this does not detract from the essential role of this funding, which is promoting skills’ training and employability.

Can a business coach help me manage my team?
Four tips to better organize your daily life