Since 1 January 2006, the “chèque emploi service universel” (or “universal service job cheque,” referred to by its French acronym of “CESU”) has been a way of compensating a household employee. It is possible for a works council or a company to make grants to employees and managers to finance the cost of this service.

How the CESU works

The CESU is a payment voucher that can be used to pay associations or accredited companies, as well as individuals, for personal services such as household help, childcare, computer assistance, odd jobs, gardening…

Consequently, in practice, the CESU is used as a traditional means of payment. The CESU is used to settle the amount owed upon receipt of the invoice issued by the service provider or to pay the net pay directly to a household employee.

How the CESU is funded

The CESU can be funded partially or entirely by the company or the works council, if one exists. The mechanism operates similarly to that of lunch vouchers: the company purchases the CESU which come in the form of a cheque book, with a particular face value, which cannot be in excess of € 100. It then passes on the cheque book to the beneficiaries at a lower cost, which can be zero.

It needs to be noted that the company has the option of giving a direct financial grant to finance the personal services paid by the beneficiary, and then the company is responsible for ensuring that the grant given is used to finance eligible services.

Need for a collective agreement

Beneficiaries of the CESU

At first the beneficiaries of the CESU were the company’s employees. The 2007 finance law extended the benefit to corporate heads: managers, chairmen, chief executive officers, etc., even if the company has no employees.

How the CESU is useful

The CESU, prefinanced by the company, is exempt from social security contributions for up to € 1,830 per year per employee. The amounts paid by the company are entirely deductible from its taxable profit and the beneficiary is exempted from social security charges and tax charges on the income for the benefit granted. As a corollary, the financial assistance exempted from income tax in this way is not accounted for in the total expenses withheld in the basis for tax reduction.

Furthermore, a company that has employees and enables them to benefit from prefinancing of the CESU or from a direct grant is eligible for the family tax credit at a rate of 25%, which boosts the total savings to more than 50% if you add the corporate income tax rate to the regular tax rate.

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