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Pension Rights of Auto-Entrepreneurs 2014

Tuesday 08 April 2014

The minimum turnover required for auto-entrepreneurs to obtain pension rights has been revised downwards for 2014 onwards.

If you run a business as an auto-entrepreneur you pay a fixed percentage of your turnover in social security contributions. These contributions grant an entitlement to a pension.

The actual percentage contribution varies by type of business, with the amounts revised slightly upwards this year, as we set out in a recent article.

The pension rights earned each year will depend on the turnover of the business. A minimum turnover is required to earn such rights, which differs by the nature of the business activity.

However, in all cases the minimum amount has been reduced from 1st January 2014.

Previously, the figure was based on a multiplier of 200 of the minimum hourly wage. This multiplier has now been reduced to 150, a change that has also been applied more broadly to salaried persons.

For those in a sales base activity the new minimum turnover to earn one quarter/year rights is €4,929; for those in a service activity it is €2,859; for the professions libérales it is €2,166.

This figure is arrived at after deduction of the standard micro-entreprise cost allowance for each type of activity that is used for the calculation of net income for tax purposes - either 71%, 50%, or 34%.

So your pension rights are not based on your actual turnover, but your turnover after deduction of the cost allowance.

Thus, let's take the example of a commer├žant (sales) based business with a turnover of €25,000 in the year. The abatement that applies in this type of business is 71%.

Accordingly, the calculation is:

  • 71% of 25,000 = €17,750
  • €25,000 - €17,750 = €7,250
  • €7,250 = One quarter/year pension rights

The amount of pension you will actually receive is based on your income and the number of quarters' (trimestres) you earn, although you cannot earn more than four quarters' in a year.

The following table shows the turnover needed to obtain one to four quarters' pension rights in 2014 for each business category.

Pension Turnover Thresholds
Type of businessCost AllowanceOne QtrTwo QtrsThree QtrsFour Qtrs
Sales (Bic)
71 %€4,929
€9,859
€14,788€19,716
Services (BIC)
50 %€2,859
€5,718
€8,577
€11,43
Professional (BNC)
34 %€2,166
€4,332
€6,498
€8,663

Administration

The process of administration of the pension contributions, records and payments of auto-entrepreneurs is divided between three different agencies.

All auto-entrepreneurs pay their social security contributions to URSSAF, the social security collections agency, but URSSAF do not administer the pension fund.

This part of the process is handled by either the RSI (Régime Social des Indépendants) for BIC related businesses, whilst BNC businesses have their own pension fund run by CIPAV (Caisse Interprofessionnelle des Professions Libérales).

So it is the RSI and CIPAV who will determine how much pension you receive, and who are responsible for pension payments.

Health Cover Social Charges and French Pensions

Whilst the prospect of obtaining a French pension may be of interest to some, for many expats, obtaining a French retirement pension could actually mean you lose your S1 health cover in retirement and pay more in taxes than you receive in pension income!

We discussed this issue in our article Health Cover and French Pensions.

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