Payroll in France
Payroll in France is among the most complex in Europe, with employers responsible for reporting employee wages for income tax purposes, withholding employee social insurance contributions, paying additional social insurance contributions from their revenue as a percentage of employee income and following requirements of a payroll tax based on the country’s value-added tax and other possible taxes.
In order to administer accurate and compliant payroll in France, you’ll need a firm understanding of the regulations that govern payroll processing and reporting.
The euro (EUR) is the official currency of France.
Employees must be paid at least monthly with the exception of seasonal, temporary, intermittent or work-from-home employees, and a payslip detailing the following is required:
- Gross and net payment amounts
- Social tax liabilities for the employee and employer
- Exemption amounts
- Number of regular hours and overtime hours of work for the pay period
- Hourly regular and overtime rates of compensation for the pay period
Payslips are generally electronic, although employees may opt to receive paper payslips.
Taxes for payroll in France
The standard corporate income tax rate in France varies based on revenue. For fiscal year 2021, the standard tax rate is 26.5% for companies with revenue less than €250 million and 27.5% for companies with revenue over €250 million. 8%. Beginning with fiscal year 2022, the tax rate for all companies, irrespective of revenue, will go down to 25%. Additionally, there is a 3.3% surtax that applies on top of the income tax.
Employee income tax in France is assessed on a progressive scale, with tax rates adjusting according to both income and family size, ranging from zero to 45%.
The standard income tax rate, calculated per household on annual income based on an employee’s last return, and its brackets are:
- Up to €10,084: 0%
- €10,085 -€25,710: 11%
- €25,711 -€73,516: 30%
- €73,517 – €158,122: 41%
- More than €158,122: 45%
Additionally, there is a surcharge on high incomes of 3%-4%.
Employees in France can opt for a nonpersonalized or neutral rate instead, which based on monthly income. If the nonpersonalized rate is lower than the standard, employees are required to pay the difference. Employees will receive a refund of the excess if the nonpersonalized rate is higher.
Taxable income in France includes salaries, wages and gross proceeds, including benefits in kind. Employers must deduct income tax from employees’ wages and send it directly to the Directorate General of Public Finance.
Employers contribute to social insurance from withholdings on income paid to employees as well as from their own required social insurance payments. These tax contributions fund social programs such as old-age pension, health insurance, supplementary pension plans, the National Housing Assistance Fund, unemployment insurance, work accident insurance and family allowances.
Contribution rates for social taxes include:
- Old-age pension: 6.9% up to the social security ceiling for employees, and 8.55% up to the social security ceiling for employers plus 1.9% of the total employment income paid to employees
- Health insurance (includes maternity, disability and death insurance): No employee contribution; 7% or 13% for employers, depending on employees’ income, except in Alsace-Moselle, where employees are assessed a 1.5% supplemental sickness contribution
- Supplementary pension: There are two brackets of supplementary pension contributions. Bracket 1 rates are 3.15% for employees and 4.72% for employers, and Bracket 2 rates are 8.64% for employees and 12.95% for employers
- National Housing Assistance Fund: No employee contribution; 0.1% for employers with fewer than 50 employees up to the Social Security ceiling, and 0.5% for employers with at least 50 employees
- Unemployment insurance: No employee contribution except for three categories of employees; 4.05% for employers through 2021. In 2022, employers may be assessed more or less than the standard rate ranging from 3%-5.05%.
- Work accident insurance: No employee contribution; employer rates vary based on workplace risk of injury or illness and company size (the French Pension and Occupational Health Insurance Fund notifies employers of their rates annually)
- Family allowances: No employee contribution; 3.45% or 5.25% for employers, based on employee income
If employers are not subject to the value-added tax (VAT) or are subject to the VAT on less than 90% of total sales, they must remit payroll taxes on wages. Rates range from 4.25% to 13.60% based on each employee’s income, although employers don’t have to pay if the tax owed is less than €1,200 annually.
In most industries, employers with at least 11 employees are required to pay an apprenticeship tax equal to 0.68% of the total taxable wages and benefits (0.44% in Alsace-Moselle) to assist in apprentice training.
Employee compensation and benefits in France
Employment contracts are required in France, and they must include full compensation information. Employee contracts, along with the generous government-mandated worker entitlements, have a big impact on the structure of payroll in France.
When processing French payroll, you’ll need to consider the following employment regulations:
Partner with Safeguard Global for your payroll in France
Hundreds of organizations depend on our global payroll expertise to ensure their payroll processing is accurate and compliant with local tax and employment requirements.
We support payroll in France in various ways: through our employer of record solution, as a local payroll provider for your French operations, and as part of a managed provider solution for your global organization.
As an employer of record in France, we handle payroll for your French workers, ensuring accuracy and compliance, while you manage their day-to-day contributions.
As a local provider of payroll in France, we can help your local operations:
- Comply with French labor laws and regulations
- Deduct the appropriate income, social and other tax withholdings
- Ensure your employees in France are paid accurately and on time
As a Global Managed Payroll provider, we offer centralized multinational payroll in over 150 countries—with streamlined processing across countries, currencies, languages and time zones—to help companies gain global visibility to pay data and make smarter workforce decisions.
Whether you need payroll support in France through an employer of record, a local provider or as part of a comprehensive global payroll system, contact us to let our experts find the right solution for you.
The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.
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