Tax and Social Security Regime of SAS Directors: What You Need to Know

Introduction: Why This Topic Matters

When creating a Société par Actions Simplifiée (SAS), one of the first questions that arises concerns the tax and social security treatment of directors. How will the president or managing director be taxed? What social protection do they enjoy? Do they contribute to unemployment insurance? And what about directors who are not remunerated?

These questions are critical because they affect both the net income of the director and the total cost for the company. They also determine the level of health, pension, and unemployment protection available to the director.

The SAS is unique in French company law: while it offers great flexibility in governance, its directors are treated, for tax and social security purposes, in a way that differs significantly from those of other structures like the SARL or SA.

Let us examine, step by step, the fiscal and social regime of SAS directors.

1. The Tax Regime of SAS Directors: Assimilation to Employees

a. Clear assimilation to salaries and wages

For tax purposes, the law assimilates SAS directors who are natural persons (president, managing director, or any other executive) to employees. Article 1655 quinquies of the French General Tax Code (CGI), reinforced by administrative doctrine, explicitly states this rule.

This means that all remuneration received by SAS directors is classified as “salaries and wages” (traitements et salaires). They therefore benefit from:

• the standard 10% deduction for professional expenses, or the option to deduct actual expenses,

• taxation under the progressive personal income tax scale,

• the same declaration process as any other employee.

Importantly, this assimilation applies regardless of shareholding or voting power. Even a majority shareholder president is treated as an employee for income tax purposes — a major difference with the SARL, where majority managers fall under a different regime.

Practical Example:

If the president of an SAS receives €80,000 per year in remuneration, they will declare this income under the “salaries and wages” category, benefit from the 10% allowance (or deduct real expenses), and pay income tax like any private-sector employee.

b. The case of collegial bodies

Some SAS provide in their bylaws for collegial bodies such as a supervisory board or board of directors. Members of these bodies are not executives but may receive attendance fees (jetons de présence).

From a tax perspective, these are not treated as salaries. Instead, Article 117 bis CGI classifies them as income from movable capital (revenus de capitaux mobiliers). They are therefore subject to the flat tax (PFU) of 30%, or, upon option, to progressive taxation with a 40% allowance.

c. The temporary option for personal income tax (IR)

In principle, the SAS is taxed under corporate income tax (IS). However, under Article 239 bis AB CGI, a young SAS may opt for personal income tax (IR) for up to five fiscal years if it meets certain conditions (small size, less than five years old, not listed, etc.).

In such cases:

• shareholder-directors are taxed directly on their share of the company’s profits,

• the taxation category depends on the company’s activity: BIC (commercial), BNC (non-commercial), or BA (agricultural).

Important note: non-shareholder directors remain subject to the standard salaries and wages regime, even if the SAS opts for IR.

d. Legal-person directors and their permanent representatives

If the director of an SAS is a legal person (for example, a holding company), its remuneration is taxed in its own regime and may be subject to VAT.

In such cases, the permanent representative of the legal person is taxed either:

• as an employee (if they are employed by the legal person), or

• as an independent (if that is their own status).
  

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2. The Social Security Regime of SAS Directors: Affiliation to the General Scheme

a. Affiliation regardless of shareholding

On the social side, SAS directors are affiliated to the general social security scheme (régime général de la sécurité sociale), just like regular employees, provided they are remunerated.

This affiliation applies regardless of shareholding: even a president holding 90% of the shares falls under the general regime (CSS, Art. L. 311-3, 23°).

This provides access to:

• health insurance,

• maternity/paternity benefits,

• family allowances,

• basic and complementary pensions (AGIRC-ARRCO),

• social contributions such as CSG and CRDS.

This is a significant advantage over the SARL, where majority managers fall under the less protective self-employed scheme (SSI).

b. Non-remunerated directors: no coverage

If the director of an SAS is not remunerated, the company has no obligation to pay contributions. The director therefore benefits from no coverage in connection with their corporate office:

• no pension accrual,

• no health insurance,

• no unemployment insurance.

Unlike SARL managers, however, they are not required to pay a minimum annual contribution (about €1,000).

In practice: a non-remunerated SAS president who has no other social protection will need to obtain coverage through another mechanism (spousal coverage, private insurance, or employment elsewhere).

3. Unemployment Insurance: A Complex Situation

a. No affiliation to the public scheme

By default, SAS directors are excluded from the public unemployment insurance scheme (UNEDIC). They do not contribute, and thus have no entitlement to unemployment benefits if their mandate ends.

b. The possibility of a valid employment contract

A director may, however, combine their mandate with an employment contract, provided three strict conditions are met:

1. The job must be real and distinct from directorship duties,

2. It must provide for separate remuneration,

3. There must be a clear subordination relationship with the company.

Key limitation: this combination is not possible for majority shareholder directors, as subordination cannot be demonstrated.

If these conditions are satisfied, the employment contract grants access to:

• unemployment insurance,

• protection of the French Labor Code (paid leave, termination rules, etc.).

c. Private insurance alternatives

Many SAS directors take out private unemployment insurance, such as GSC or APPI contracts, which provide coverage in case of loss of office. Premiums are relatively high, and deductibility depends on the tax status of the director.

4. Social Charges Paid by the SAS

a. The cost of social protection

One of the main issues for entrepreneurs is the cost of social contributions. For a remunerated director of an SAS:

• Employer’s contributions: about 45–50% of gross salary,

• Employee’s contributions: about 20–23% of gross salary.

Example: If the SAS pays its president €100,000 gross salary:

• Employer’s contributions: ~€45,000–50,000 → Total employer cost: €145,000–€150,000

• Employee’s contributions: ~€20,000–23,000 → Net before income tax (net à payer): €77,000–€80,000

This represents a high cost for the company, but ensures the director enjoys full protection equivalent to that of private-sector employees.

b. Declaration obligations

The SAS must:

• issue payslips for every payment of remuneration,

• declare contributions through the DSN (nominative social declaration),

• pay contributions to URSSAF and pension funds on time.

5. Summary Table

Conclusion

The tax and social regime of SAS directors is generally favorable compared to other company forms:

• Tax treatment is clear and stable, with directors assimilated to employees for income tax purposes.

• Social protection is comprehensive, covering health, family, and pensions, provided the director is remunerated.

• The trade-off is a high cost in contributions, which can weigh heavily on the company.

For non-remunerated directors, the situation is the opposite: no cost, but no protection.

The choice therefore depends on the company’s strategy:

• A start-up may choose a non-remunerated president at the beginning,

• A growing SAS may pay its president for access to protection,

• Shareholder-directors must also consider private unemployment insurance to cover risks excluded from the general scheme.

In short, the SAS offers directors a regime that combines security and stability, but requires careful planning to balance costs, remuneration needs, and protection objectives.