Understanding the Loi Madelin : A Guide for Self-Employed Professionals

What is the Loi Madelin?

The Loi Madelin allows self-employed individuals to deduct the premiums paid for specific insurance contracts (retirement, supplementary health, loss of income protection, and unemployment insurance) from their taxable professional income, up to a specified ceiling. The purpose of this tax scheme is to help fill any gaps in France’s basic social security system since self-employed workers often have less coverage than traditional salaried employees.​​

The amount you can deduct depends on your taxable profit and the annual social security ceiling (known as PASS, Plafond Annuel de la Sécurité Sociale). For example, you can generally deduct 10% of your taxable profit, plus 15% of any profit above one PASS, with maximum limits in place.​

These deductions are only for income tax, not social charges, so you need to be paying income tax to benefit fully. Benefits (like a retirement pension or income replacement) are usually paid out as a taxable annuity.​ Micro-entrepreneurs are excluded from this scheme because they cannot use the Loi Madelin for deductions.​​

Who Can Use the Loi Madelin?

The Loi Madelin helps French self-employed professionals reduce their taxable income by purchasing additional health coverage, pension savings, and other protections that compensate for the shorter social security net they have compared to salaried employees. The following types of individuals are eligible for use under the Loi Madelin:

• Self-employed people subject to BIC (industrial/commercial profits) or BNC (non-commercial profits) tax regimes.​

• Company managers (like SARL directors) who qualify under French tax rules.​

• Sole traders, independent professionals, and business owners.​

The Four Main Types of Madelin Contracts

• Retirement (Pension) Contract: This is a private retirement savings contract where you build up a supplementary pension that is paid out as an annuity upon retirement. Contributions are deductible from taxable income within defined annual ceilings, making it the most popular Madelin contract. Since October 2020, new subscriptions are primarily directed toward the PER (Plan Épargne Retraite), but existing Madelin contracts can still be topped up.

• Health Insurance (Mutuelle) Contract: This is a top-up health insurance policy that covers medical expenses not reimbursed by the SECU. It can also extend to family members such as dependents.​

• Disability/Death/Income Protection (Prévoyance) Contract:
  This category includes several policies:

  • Daily allowance insurance: Compensates lost income if you’re unable to work due to illness or accident.

  • Disability insurance: Pays a pension if permanent disability prevents you from working.

  • Death benefit: Pays a lump sum or ongoing pension to your designated beneficiaries in case of death.​

  • Long-term care insurance: Supports you in case of loss of independence.

• Unemployment Insurance (Loss of Employment) Contract: This option provides financial compensation if you involuntarily lose your self-employed activity, which is not covered under the base French system for independents.​

How Madelin Tax Deductions Are Calculated

The Loi Madelin allows self-employed individuals in France to deduct certain insurance contributions (retirement, health, disability/death, unemployment) from their taxable income, up to specific annual ceilings. Here’s a step-by-step breakdown for Madelin retirement contributions—the most common type:

1. Determine Your Reference Income

Use your taxable professional income (BIC, BNC, or managerial remuneration as per Article 62). For most, this is your net annual profit before personal income tax.

2. Obtain the Annual Social Security Ceiling (PASS)

The PASS (Plafond Annuel de la Sécurité Sociale) for 2025 is €47,100.​

3. Find the Deduction Formula

For 2025, you can deduct 10% of your annual income, up to 1 PASS (€47,100) PLUS 25% of your income exceeding 1 PASS, up to 8 PASS (max €376,800).

Note: For incomes at or below the PASS, only the first part applies; for higher incomes, both are used.​

4. Calculating the Ceiling: Step-by-Step Examples

Example 1: Taxable Profit Below PASS

Taxable Profit: €40,000; deductible limit = 10% × €40,000 = €4,000.

Example 2: Taxable Profit Above PASS

Taxable Profit: €70,000; up to PASS: 10% × €47,100 = €4,710. On excess: 25% × (€70,000 – €47,100) = 0.25 × €22,900 = €5,725. Total deductible = €4,710 + €5,725 = €10,435.​

Example 3: Taxable Profit far above PASS

Taxable Profit: €120,000; up to PASS: 10% × €47,100 = €4,710. On excess: 25% × (€120,000 – €47,100) = 0.25 × €72,900 = €18,225. Total deductible = €4,710 + €18,225 = €22,935.

A few things to keep in mind:

These calculations in the above examples apply to retirement contracts. Different ceilings exist for Madelin health or disability/death contracts.

You must be up-to-date with your mandatory social security contributions to claim.

The deduction reduces your income tax, not your social charges.

Always calculate: 10% of income up to PASS, plus 25% of income over PASS (to max of 8 PASS), but never more than actual contributions paid.​

How to Sign up for a Madelin Contract

1. Confirm Your Eligibility

Before you begin the process, you need to make sure that you are officially registered as a travailleur non salarié (TNS) under the BIC or BNC regimes (professions libérales, freelancers, entrepreneurs, artisans, etc…). You cannot benefit for the Loi Madelin if you are a micro-entrepreneur. You will also need to be affiliated with the proper mandatory social protection system (i.e. URSSAF/SSI).

2. Clarify Your Needs

You need to have an understanding on what you want from the contract(s) before going into this. Are you looking for stronger retirement savings? Supplementary health coverage? income protection? Unemployment coverage? Are you looking for coverage just for yourself or your dependents as well? Knowing these answers will give you better clarity on moving forward.

3. Research Providers and Compare Contracts

Once your needs are defined, you can explore different offers from various insurers, mutuals, and provident institutions. You can see if there are any online comparison tools to DIY or you can have a broker that specializes in TNS contracts provide the information. You want to make sure that you keep the following in mind when researching: coverage types, contribution flexibility, tax advantages and claims process and customer support. 

4. Gather the Required Documents

As is with any step in French administration, you’ll need to make sure you have the proper documentation in your application folder. On average, you will need the following documents:

• Proof of professional status (SIRET, SSI affiliation)
• Recent tax notice or proof of professional income
• ID/passport
• Bank details (RIB/IBAN)
• Proof of address
• Documents related to dependents, if applicable. 

5. Contact Your Chosen Provider

After you’ve selected your provider, you’ll need to submit a request a quote for your situation. You can also request an application to open an account as well. If necessary, speak to an advisor if you have any questions or need a contract tailored to your specific situation. 

6.  Complete and Submit Application

When you’ve gathered all the necessary papers, you’ll need to make sure you fill out the form carefully and attached all the required documentation. Be sure to double check that the application is filled out correctly (and you haven’t forgotten to check a box or your signature). Submit the application by means provided to you either from the application or from any communication from the company. 

7. Verification and Approval Process

At any point during the application process, be prepared that the insurer may reach out to check on certain things. They may ask for more proof of TNS status and eligibility. If you are applying for any health-related contracts, they may request additional verification from CPAM. These checks can take anywhere from several weeks to 3 months. You will want to respond in a timely manner to keep your application moving forward. 

8. Finalize and Receive Your Contract

When you’ve been approved, you will receive your contract documents and the insurance certificate. Be sure to review all documentation terms carefully, double check there are no errors. You’ll want to keep the papers in a handy place as you will need them for tax declarations and possible CPAM audits. 

9. Start Using and Declaring Your Contract

In order to fully benefit from your contract, you will need to pay your contributions on time, you will receive a yearly summary. You can declare your eligible contributions on your annual French income tax return to benefit from the tax deduction. Be sure to keep all certificates and receipts for any future reference.