Payroll Guide for France
The employment field in France is subject to EU regulations and directives, French Labor Law (Code du Travail), and local collective bargaining agreements (Conventions Collectives).
Firsts outline the rights and obligations of an employer and employee in France and stipulate general rules and policies around employment contracts, working hours, paid vacation days, and so on. Second, which are the collective agreements, are more specific per industry and professions, and mainly cover all the requirements, conditions, and benefits of the employees during an employment life cycle, from the trial period to the termination and severance payment.
The income received in France as salary is generally subject to three categories of taxes: social security obligations, compulsory or supplementary healthcare or related insurances, and undoubtedly to withholding taxation.
An important aspect to highlight is the fact that an employment contract in France must be in French, according to the French Labor Law.
|Minimum salary||10,25 EUR per hour or 1,554.58 EUR per month|
|Payroll difficulty level||Challenging|
Social Security in France
Employee safety and wellbeing is a priority for France authorities and local government bodies, this is the reason why France seems to be on the top of the European countries regarding the social security coverage, protection, and insurance of the employees. Though, this may cause some additional headaches for employers. An average of 16,5% is the contributions due by the employee (Cotisations Salariales) and around 30% (Cotisation Patronales) the employer is obliged to pay as his part of social security charges for an employee.
According to the law, the employer is the one who must retain and pay the social security taxes in the legal terms of time. In addition to this, starting with January 2019 companies should withhold every month the income tax on salary (prélèvement a la source).
Trying to understand the social security system in France you might come along with different abbreviated terms or short names that have a particular meaning in the payroll practice. Below are only a part of them:
SMIC (Salaire minimum de croissance) - minimum paid salary, it can be yearly, monthly, hourly
PASS/ PMSS (Plafond annuel/mensuel de sécurité sociale)- yearly/ monthly social security ceiling, in 2021 PMSS is 3428 EUR and PASS is 41.136 EUR.
CDI/ CDD (Contract Duration Indeterminée/ Determinée) - permanent/ fixed-term contract
Cadre / Non-Cadre - the employees’ salaries and contributions are different for the “Cadre” and “Non-Cadre” employment statuses. “Cadre” is for the top management positions, executives, individuals with high, certified education levels, while “Non-Cadre” is for all other categories.
RTT (Réduction du Temps de Travail) - working time reduction due to a specific reason
ITT (Incapacité temporaire de travail) - temporary work incapacity
PAS (Prélèvement a la source) - withholding tax (tax at source)
BS (Bulletin de salaire) - monthly payslip
Apart from deducting and paying the monthly contributions, the employer is obliged according to the law to provide every month to his employees a payslip (Bulletin de salaire/ Fiche de paie/ Bulletin de paie) usually, it has to be in French.
There are legal requirements related to what it is compulsory for a payslip to contain. Here is detailed information.
Another important thing to be mentioned is the salary base used for the calculations. This means that the social security contributions apply to different amount of salary base (Assiette de cotisation):
To the whole gross salary amount
To the gross salary up to social security ceiling (PMSS)
To a specific base, called tranche
|Social Security Contributions||Employer rate||Employee rate|
|Health, maternity, military, death||7% or 13%||-|
|Complementary health insurance (Mutuelle)||
|Complementary health, military, maternity, death ins. (Prevoyance)||Variable %||Variable %|
|Work Accident Insurance||Variable %||-|
|Old-Age Insurance I||1,9 %||0,4 %|
|Old-Age Insurance II||8,55 %||6,9 %|
|AGIRC/ARRCO T1||4,72 %||3,15 %|
|AGIRC/ARRCO T2||12,95 %||8,64 %|
|General Balance Contribution T1||1,29 %||0,86 %|
|General Balance Contribution T2||1,62 %||1,08 %|
|General Technical Balance||0,21 %||0,14 %|
|Supplementary Pension||Variable %||Variable %|
|Family Allowance Contribution||3,45 % or 5,25 %||-|
|Unemployment Contribution||4,05 %||-|
|AGS Contribution||0,15 %||-|
|APEC||0,036 %||0,024 %|
|Autonomy Solidarity Contribution||0,3 %||-|
|FNAL <50 employees||0,1 %||-|
|FNAL >50 employees||0,5 %||-|
|Social package||8 % or 20 %||-|
|Mobility/ transportation contribution||Variable %||-|
|Social Dialogue Contribution||0,016 %||-|
|Professional Development Contribution||0,55 % or 1 %||-|
|Construction Participation Contriibution||0,45 %||-|
|Apprenticeship Fee Contribution||0,68 %||-|
|Social Security Surcharge (CSG)||9,2 %||-|
|Social Security Debt Reimbursement (CRDS)||0,5 %||-|
Tax at source in France (Prélèvement à la source)
From January 2019, the tax at source must be deducted directly from the income of subjects to withholding tax, be it salaries, pensions, allowances, property income, industrial and commercial (BIC), or non-commercial profits (BNC). However, the taxpayers are able to choose between the applicable tax rate: personalized, non-personalized (neutral), and individualized tax rates.
The tax personalized tax rate is usually communicated by the tax office representative the moment you submit the tax return. When establishing it, he takes into account all your gains acquired during the declaration year, as well as your personal situation (civil status, number of children, and age).
The non-personalized tax rate or more commonly the neutral rate (à partir du barème de l’impôt) is mostly used in cases when the employee decides to keep his tax rate confidential from his employer (how is the case when having multiple jobs). This rate is calculated only taking into account the employee yearly gross salary, considering him being single with no children, and it is taken from the tax table applicable in the current year (updated for 2021):
|MONTHLY TAXABLE BASE||APPLICABLE RATE|
|up to 1420 EUR||0 %|
|1420 EUR to 1475 EUR||0.5 %|
|1475 EUR to 1570 EUR||1.3 %|
|1570 EUR to 1676 EUR||2.1 %|
|1676 EUR to 1791 EUR||2.9 %|
|1791 EUR to 1887 EUR||3.5 %|
|1887 EUR to 2012 EUR||4.1 %|
|2012 EUR to 2381 EUR||5.3 %|
|2381 EUR to 2725 EUR||7.5 %|
|2725 EUR to 3104 EUR||9.9 %|
|3104 EUR to 3494 EUR||11.9 %|
|3494 EUR to 4077 EUR||13.8 %|
|4077 EUR to 4888 EUR||15.8 %|
|4888 EUR to 6116 EUR||17.9 %|
|6116 EUR to 7640 EUR||20 %|
|7640 EUR to 10604 EUR||24 %|
|10604 EUR to 14362 EUR||28 %|
|14362 EUR to 22545 EUR||33 %|
|22545 EUR to 48292 EUR||38 %|
|Over 48292 EUR||43 %|
The individualized tax rate is intended for couples who are subject to joint taxation, and who have different amounts of incomes. This solution allows the one with the lowest income not to be taxed at the couple's average tax rate (personalized rate). The rate includes their own income (salary, retirement, etc.), as well as half of the income coming from goods held in common.
Almost in all cases, employees working in France are paid at the end of the month, unless there is a collective agreement in place that indicates a particular pay date.
The legal working time is fixed to 35 hours per week, 151,67 hours per month, or 1607 hours per year. However, contractual or collective agreements may provide for a weekly working time higher or lower than 35 hours. Even though it is not forbidden for an employee to work over the legal working duration, time worked beyond the legal (or contractual) duration is considered overtime. The first 8 hours of overtime are required to be paid at 125% rate, and any following hours at 150%.
If the working time is less than the legal (or contractual) duration, the employee works part-time.
As well, daily working time must not exceed the maximum duration of 10 hours per day, with some exceptions.
The weekly effective working time must not exceed 48 hours in the same week or 44 hours per week on average over a period of 12 consecutive weeks.
French employees have the right to benefit from short pauses during the working day. Therefore, the employee is entitled to at least 20 minutes of break every 6 consecutive worked hours.
Compensations and Benefits
As is the case for many European countries, in France employees can be compensated in addition to monthly salary with bonuses, commissions, benefits in kind, and different participation, interests, or equity plans, if the company provides such plans. These types of remuneration are different from industry to industry, and from one position to another.
All of the mentioned above are an integral part of the employee’s gross salary that in the process of payroll calculations will be subject to social security, withholding tax deductions, and specifically applicable taxes.
Holidays and Leave
Every employee has the right to days of leave paid by his employer. The duration of the leave varies according to the rights acquired by the employee during his employment. Departures on leave should normally be agreed with the employer, but may not be interdicted by him.
The days of paid leave can be taken in a fractional way (from several times) when the employee's leave request exceeds 12 working days.
The number of vacation paid days acquired depends on the number of working days performed by the employee in the company
Whether the employee works full-time or part-time, he acquires 2.5 working days per month with the same employer. This corresponds to 30 working days (5 weeks) for a full year of work. To this number are added 11 public holidays which the employees benefit in France, with 1st of May being the only statutory paid holiday.
French Labor Law outlines other types of leaves, paid or not, to which employees have the right. Some of them are maternity, paternity, parental leaves, leave in case of sickness or accident, in case of birth of a child, in case of child illness, of adoption, leave for marriage, for the death of a close person, etc. More information related to other kinds of statutory leaves is here.
An employment termination may occur in the following situations:
Termination in case of force majeure
A written notice has to be provided to the employee in case of a resignation. The law does not provide a specific duration for the notice period.
The employee is entitled to severance pay only under certain conditions and only in case of a CDI (permanent contract), or met a minimum length of service required by the French Labor Code, or, if applicable, the collective bargaining agreement. In general cases, employees receive one-fifth of their monthly salary for each year of service (up to ten years) and then one-third for each following year.