Among the measures taken by the new French government is an Amending Finance Law, passed in August this year, which increases rates of social security contributions for employers.

For example, the exemptions from employers' social security contributions for overtime have been abolished for companies of 20 or more employees.  As from 1 September 2012, the ability to deduct contributions is available only for companies with fewer than 20 employees.  Overtime is also subject to employee social contributions (from September 2012) and to employee income tax (from August 2012).

In addition, many contribution rates have been increased.  The rate of employers' social contributions on stock options increases from 14% to 30% and the rate for free share allocations is increased from 8% to 10%.  The new rate applies to stock options and shares allocated or granted as from 11 July 2012.  The rate of "forfait social" on various employee savings plans has also been raised from 8% to 20% from 1 August 2012.  Employers' social contributions on top-up pensions will be doubled from January next year.

It should also be noted that severance payments are now subject to social contributions on their full amount (from the first euro paid), if they exceed ten times the Social Security ceiling (meaning if they exceed €363,720 for 2012).  This provision affects severance payments made from 1 September 2012.