Payroll in France

Corporate tax
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.

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.

Social taxes
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

Payroll tax
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.

Apprenticeship tax
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.