The balance sheet bonus is a subject that raises many questions, particularly among managers of VSEs and SMEs. It is essential to understand its terms, its calculation, as well as the rules to follow to have access to it. This bonus, awarded at the end of the financial year, can represent a motivational lever for both employees and managers. Among the common questions, employers wonder if it is mandatory, how it should appear on the pay slip, and what the tax implications are.
How can we define what the balance sheet bonus really is? What is the difference between this and other bonuses such as participation or profit-sharing? Companies must also be aware of the legal obligations that may apply in certain situations, such as collective agreements or corporate practices. This article aims to demystify the balance sheet bonus and provide clear answers to employers’ concerns on this delicate subject.
Balance sheet bonus: definition and obligations
What is the balance sheet bonus?
There balance sheet bonus is a sum paid to employees or managers of a company at the end of the accounting year. Its main goal is to reward individual or collective performance, to motivate teams, or to share part of the company’s profits. Unlike other regulated schemes, such as participation or profit-sharing, the payment of this bonus is a discretionary decision of the employer.
There are several types of balance sheet bonuses, whether collective, individual or specific to managers. The amounts vary depending on the performance of the company and its internal policy. As part of a collective bonus, all employees can benefit from it according to specific evaluation criteria. For an individual bonus, the reward will depend on the performance of a particular employee.
Is it obligatory for all employees?
The balance sheet bonus is not a legal obligation in the majority of situations. However, certain conditions may make its payment obligatory: collective agreements or branch agreements may impose profit sharing in the form of a bonus. Furthermore, if a company shows a habit of paying this bonus without any particular conditions, this can be considered as an acquired right. In this case, in order not to pay the bonus, the employer must follow a formal procedure. Finally, if the bonus is mentioned in the employment contract, then it must be paid according to the terms established therein.
How to appear on the pay slip?
The balance sheet bonus must be clearly indicated on the employee’s pay slip. It can appear under different names, such as “exceptional bonus”, “balance sheet bonus” or “results bonus”. This payment is integrated into the gross salary and, like any bonus, is subject to social security contributions as well as income tax. It must also be declared in the Nominative Social Declaration (DSN). Employers can choose to pay this bonus in one go or spread it over several months, with an obligation to identify it on the pay slip to avoid any confusion.
Calculation and accounting of the balance sheet bonus
How to calculate a balance sheet bonus?
The calculation of a balance sheet bonus may vary depending on the company’s policy and the different criteria it defines. While there is no one-size-fits-all formula, there are some common approaches that can be implemented. The first method consists of establishing a fixed amount defined by the employer, awarding the same bonus to all employees or modulated according to criteria such as seniority or position.
Another method is based on a percentage of net profit or turnover, awarding a bonus proportional to the financial results achieved. Finally, individual or collective performance criteria can also condition the allocation of this bonus, by setting objectives to be achieved at the start of the financial year.
Example of percentage-based calculation
Let’s imagine a business that generates a net profit of €100,000. If it decides to allocate 5% of this amount to employees in the form of a balance sheet bonus, this would represent a total of €5,000, to be distributed according to the defined criteria. Thus, employees would receive a share proportional to their contribution or performance during the financial year. In the more specific case of a SARL manager, the bonus can also be additional remuneration, justified by the financial performance of the company.
The balance sheet bonus and social contributions
Like any bonus paid, the balance sheet bonus is subject to social security and tax charges. This means that it is considered an element of remuneration and must be subject to employer and employee contributions. In terms of taxation, it is included in the employee’s taxable income, just like the basic salary, and is subject to withholding tax. For the employer, it is imperative to declare this payment in the DSN to remain in compliance with tax obligations.
Balance sheet bonus: special cases
Balance sheet bonus and dismissal
The question of payment of the balance sheet bonus upon dismissal is complex. The right to this bonus will depend on the conditions established by the employer. If the bonus is mentioned in a collective agreement or employment contract, then it must be paid, even in the event of dismissal, unless otherwise indicated. In addition, if the bonus is the subject of corporate use, the employer could be required to maintain it, provided that this use is well established and followed.
Balance sheet bonus and retirement
The retirement of an employee may also call into question their right to the balance sheet bonus. If the employee leaves before the end of the financial year, he or she may not benefit from the bonus, particularly if it depends on the results at that time. However, if the bonus is paid every year systematically, then the employee can claim his right to benefit from it, unless there is an explicit mention in the agreement or intra-company practice.
Balance sheet bonus and filing for bankruptcy
When a company faces serious difficulties, such as filing for bankruptcy, this raises the question of bonuses to be paid. In the event of judicial recovery, the bonus can still be paid if the financial situation of the company allows it, but is not a priority. On the other hand, in the event of liquidation, it is very likely that the premium cannot be paid, unless it has been declared and can be included in the liability to be honored. Employees also have the possibility of appealing to the salary guarantee (AGS) to recover the sums due.
The three key points to remember
1. Optional but supervised bonus
Although the balance sheet bonus is not obligatory, it may be imposed in certain cases by agreements, contracts or established practices.
2. Anticipate the calculation and taxation
The financial impact of the bonus must be planned during the financial year, taking into account contributions and taxation.
3. Special cases to be aware of
Layoffs, retirements or bankruptcy filings can influence the payment of the balance sheet bonus, and it is crucial to evaluate each situation individually.
For those who wish to delve deeper into the subject, there are additional resources on the issues and specifics of the balance sheet bonus. For example, the link to a article on employer obligations can offer more details on regulatory aspects and a chilometric cost guide relevant to financial understanding.