Taxes and payrolls: the peculiarities of the French labour market
Each labour market has some peculiarities. It may be tricky for foreigners to fully understand the payment methods, the taxes and other benefits related to them. In TalentUp, we are starting a series of different blog articles, one for each country. This article analyses the French labour market.
General data about the French labour market
| Minimum monthly wage | 1,747.20€ |
| Payment basis | Monthly |
| Payment | Usually, at the end of the month |
| Maximum working hours a week | 35h |
| Working hours compensation | Compensated at 125% for the first 8 hours. Compensated at 150% for the following hours. |
In France, the 13th salary is very common, and some companies even pay the 14th salary to their workers. This is optional, not compulsory. The payment date is usually around November or December, but it’s up to the company’s decision.
Payroll taxes in France
Social security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.
| Social security | Employer % | Employee % | Total % |
| Health, maternity, disability, death | 7 to 13 | 0 | 7 to 13 |
| Autonomy solidarity contribution (CSA) | 0.3 | 0 | 0.3 |
| Old-age insurance | 10.45 | 7.3 | 15.45 |
| Family benefits | 3.45 to 5.25 | 0 | 3.45 to 5.25 |
| Social security surcharge (CSG) | 0 | 9.2 | 9.2 |
| Social security debt reimbursement contribution (CRDS) | 0 | 0.5 | 0.5 |
| Unemployment contribution | 4.20 | 0 | 4.05 |
| AGS (wage guarantee insurance association) | 0.15 | 0 | 15 |
| Supplementary Pension & CEG | 6.01 to 14.57 | 4.01 to 9.72 | 15 |
| TOTAL | 31.56 to 54.11 | 16.6 | 16.5 to 30.23 |
The healthcare in France covers about 70%-80% of the medical costs with the remainder being paid by supplementary private health insurance. For employed individuals, the insurance is paid by the employer; unemployed individuals need to pay it themselves.
Once contributions are paid, employees need to pay an income tax that varies depending on their gross salaries.
| French income tax bands | French tax rate |
| Up to €10,777 | 0% |
| €10,778–€27,478 | 11% |
| €27,479–€78,570 | 30% |
| €78,571–€168,994 | 41% |
| €168,994 and above | 45% |
Contingencies from self-employees
Self-employed workers’ social security contributions are calculated based on their self-employed, non-agricultural earnings that are taken into account for their income tax calculation
| Contribution field | % |
| Health insurance | 0.85 – 6.5 |
| Private-health insurance | 1.5 – 6.5 |
| Retirement pension | 17.75 |
| Supplementary retirement pension | 7 – 8 |
| Disability/death insurance | 1.3 |
| Family benefits | 0 – 1.3 |
| Replacement income (CSG – CRDS) | 6.7 – 9.7 |
| Professional training | 0.34 |
| TOTAL | 28.44 – 51.39 |
Example of net salary in France
As a reference, we use the average salary of a software engineer. In France, on average, software engineers earn annually 55,000€.
| Social security | Employer | Employee | ||
| % | € | % | € | |
| Gross salary (annually) | 55000 | |||
| Health, maternity, disability, death | 7 to 13 | 3850 to 7150 | 0 | 0 |
| Autonomy solidarity contribution (CSA) | 0.3 | 165 | 0 | 0 |
| Old-age insurance | 10.45 | 5747.5 | 7.3 | 4015 |
| Family benefits | 3.45 to 5.25 | 1897.5 to 2887.5 | 0 | 0 |
| Social security surcharge (CSG) | 0 | 0 | 9.2 | 5060 |
| Social security debt reimbursement contribution (CRDS) | 0 | 0 | 0.5 | 275 |
| Unemployment contribution | 4.20 | 2310 | 0 | 0 |
| AGS (wage guarantee insurance association) | 0.15 | 82.5 | 0 | 0 |
| Supplementary Pension & CEG | 6.01 to 14.57 | 3305.5 to 8013.5 | 4.01 to 9.72 | 2205.5 to 5346 |
| TOTAL (annually) | 31.56 to 54.11 | 17358 to 29760.5 | 16.6 | 9350 to 16901.5 |
| Income tax | 11 | 2338 | ||
| 30 | 3185.85 to 5451.3 | |||
| NET SALARY (annually) | 32574.65 to 37860.70 |
The employer contributes from 17,358 to 29,760.5€ to social security and the employee 9,350 to 16,901.5€.
After paying the income tax, the employee has a net salary of 32,574.65 to 37,860.70€ coming from a gross salary of 55,000€.
Unemployment regulation in France
Before the resignation, notice should always be given to the employer. Even so, it can be either verbally or in writing and there is no established notice period, some companies or industries establish it by contract.
When is the employer the one that wants to terminate the contract, a preliminary dismissal interview must be set up and take place. 2 days to a month after the meeting a letter of dismissal must be sent to the employee. Then, the notice period is:
| Notice period | If the employee was employed… |
| 1 month | Between 6 months and 2 years |
| 2 months | Over 2 years |
| 3 months | For executives |
The severance payment is done with the option that gives a most favourable income:
- Monthly average of last 12 months of employment
- Average monthly earnings of all months preceding dismissal
- One-third of the last three months
Different kinds of leaves in France
In France, there are 11 public holidays with May 1st being the only statutory paid holiday.
Employees are entitled to 2.5 days of monthly leave which represents 5 weeks a year.
Sick leaves start after the first three days. Sick pay represents 50% of the average daily earnings of the worker. In order to receive it, the employee needs to have worked, at least, one of the following:
- 150h in the past 3 months
- 90 days immediately before the leave
- Have contributed based on earnings of at least 1.015 times the legal hourly minimum wage in the last six calendar months.
An injured employee is entitled to their full daily wage for the day of the accident.
- During the leave, the worker is paid a daily allowance of 60% of their daily wage.
- From the 29th day on, the employee will receive 80% of their daily wage.
Leave for family events is:
- 1 day for the marriage of an employee’s child
- 2 days to announce the disability of a child
- 3 days for the birth in employee’s household or adoption
- 3 days for the death of a spouse or partner, a father, mother, father-in-law, mother-in-law, brother or sister (bereavement leave)
- 4 days for an employee’s marriage
- 5 days for the death of a child (bereavement leave)
Paid parental leave
One big particularity of the French labour market is that the parental leave duration depends on if it is the first, second or third birth and whether they are twins.
| Maternity leave | Before delivery (prenatal leave) | After delivery (postnatal leave) | Total |
| 1sr or 2nd birth | 6 weeks | 10 weeks | 16 weeks |
| 3rd birth | 8 weeks | 18 weeks | 26 weeks |
| Birth of Twins | 12 weeks | 22 weeks | 34 weeks |
| Simultaneous birth of 2 or more children | 24 weeks | 22 weeks | 46 weeks |
Male employees are entitled to three days leave on the birth or adoption of a child. They are also entitled to 11 consecutive days of paternity leave (18 if there are multiple births or adoptions), which must be taken within the four months following birth or adoption.
Adoption leave is given and equal for both spouses and duration is:
- 10 weeks
- 18 weeks if the adoption increases the number of children to 3 or more
- 22 weeks for multiple adoptions
Other common French benefits
In some companies it is common to receive disability/life Insurance -after one- or two-years seniority. During this period the employee receives 100% of his salary.
Many companies also give meal vouchers. The cost of meal vouchers is usually split 50%-50% between the employee and the employer up to a ceiling defined by law.
For senior position holders, it is common to have a company car. Fuel reimbursement is included. For other positions, commution allowance for public transport and/or by bike is given.
Another common benefit is the chèques-vacances. This is a national voucher scheme for paying at gites, holiday camps, hotels, youth hostels etc. They are provided by the ANCV (Agence Nationale pour les Chèques-Vacances).
| Benefit | % of companies with this benefit |
| Professional development | 36.7 |
| Free snacks | 30.8 |
| Health insurance | 5.3 |
| Flexible working hours | 4.7 |
| Cutting edge technology | 4.1 |
How to employ a French worker
A foreign company that does not have a place of business in France and hires employees to perform work in France is subject to the French Social Security system.
The company must:
- Be registered in the URSSAF (Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales), which is the government organization that collects social security and family benefit contributions. The registration is fulfilled by completing the E0 form that is available on the net-entreprises website.
- Submit a nominative declaration known as DPAE (déclaration préalable à l’embauche), which translates to “a declaration before hiring.” It should be submitted prior to onboarding employees. You send the DPAE to the URSSAF. The DPAE is necessary for registering your employees with social welfare offices and enrolling them in the social security scheme. This declaration also requests approval for conducting a medical examination for your new employees.
- Carry out the employee hiring formalities (pre-employment statement, drawing up a pay slip, payment of contributions and social contributions…).
To declare and pay Social Security contributions, companies may sign an agreement to appoint a representative residing in France. However, this is not compulsory since employers can also make all declarations and pay contributions in one go by way of the foreign firms slip (« titre firmes étrangères »/ TFE).
Some platforms (Papaya Global among them) offer the Employer of Record (EoR) service helping companies hire countries where they do not have any office.
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