Personal services: what social and tax advantages?

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If you use the services of a personal services organization, or if you are a direct employer, you can benefit from the tax advantages and social reductions put in place by the State. In this article, learn about the privileges you can enjoy by using human services. Note that these privileges are subject to conditions.

Social security tax exemption

There are certain cases where you can benefit from an exemption or a reduction in social charges when you employ an employee at home as part of the personal service.

This deduction of social charges may apply to people who benefit from the compensatory disability benefit or PCH, to holders of the Personalized Autonomy Allowance or APA, to parents of a child who is disabled thus opening up to a right to the Disability Education Allowance or AEEH or to the PCH. It also applies to any individual who has reached the minimum retirement age and who requires the help of a third party to carry out ordinary everyday activities in their place.

However, it should be noted that this exemption from social charges cannot be combined with the flat-rate reduction in employer contributions of two euros per declared hour from which individuals who hire employees at home can benefit.

The income tax credit

The first tax benefit of using personal services takes the form of an income tax credit of 50% of the total amount of expenses incurred for personal services.

The amount is capped at 12,000 euros per year. This ceiling is increased by 1,500 euros per dependent, or depending on the presence of a disabled child, the number of disabled children, and ascendants living in the declarant’s home. It should also be noted that this ceiling is applicable to all personal services except for small DIY (limited to € 500), small gardening (limited to € 5,000) and for computer and internet assistance at home (limited to € 3,000).

The reduction of the VAT rate

There are three categories of VAT applicable depending on the type of service invoiced by a company or an association offering personal assistance services, namely:

A reduced rate of VAT of 5.5% applying to services related to essential daily activities to be carried out to help people with disabilities or dependent elderly people.
A reduced rate of VAT of 10% applying to services such as household maintenance, home tutoring or even childcare.
The “normal” rate of VAT of 20% applying to work such as small gardening jobs, computer and internet assistance at home, home courses other than tutoring, as well as maintenance services, etc. maintenance and temporary vigilance at home.

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