In France, employees have high expectations of their employers. Paying employees on time, in the right currency, and in compliance with the local labor laws is fundamental. 

To remain compliant, international employers must pay their workers in line with employment laws in France. Payroll laws can be challenging to navigate, as France has its own unique tax laws, social security system, and other statutory benefits that foreign employers must comply with. Continue reading to learn more about payroll taxes in France.

Using Payoneer Workforce Management helps support compliant payroll operations to pay employees in France.

Payroll in France: Wages and other payments

Running payroll in France requires a working understanding of the payroll cycle, minimum wage entitlements, and statutory benefits. 

France’s payroll cycle

Employers must pay employees in France monthly. While there is no strict date for payments to be made by, unless stated otherwise by a collective bargaining agreement, they’re usually paid by the last working day of the month. Payments must, however, be paid within the same period every month.

Minimum wage

Employers must pay employees in France at least a minimum wage of 1,766.92 gross per month.

Any work performed outside of the standard 35-hour work week in France is considered overtime (unless the employee is a senior executive). Overtime pay rates are usually determined by collective bargaining agreements, but in the absence of one, overtime wages should be paid at:

• 125% of regular wages for the first 8 hours of overtime in a week 
• 150% of regular wages for any additional hours

Overtime maximums may be governed by collective bargaining agreements.

Sick pay

When an employee is sick, they receive a daily subsistence allowance from their sickness insurance scheme. This is paid at a rate of 50% regular wages, though it’s capped at EUR 50.58.

Maternity pay

During maternity leave, the employment contract is suspended, but the employee is entitled to the daily subsistence allowance of between EUR 10.24 and EUR 95.22, depending on their usual wages. This is paid every 14 days.

Vacation pay

Employees in France are entitled to 30 working days (5 weeks) of paid annual leave, accruing at a rate of 2.5 days per month of employment.

Severance packages

To determine the severance pay for a mutually agreed termination in France, the first step is to calculate the reference salary. The reference salary is defined as the higher average of either the total salaries from the last 12 months or the total salaries from the last 3 months.

The formula for calculating the severance pay is then applied as follows:

• For up to 5 years of service: (Reference Salary X ¼ X Number of months worked) / 12
• For service beyond 5 years: (Reference Salary X ⅓ X Number of months worked) / 12

13th-month salary

Though it’s not legally mandated, it is customary to pay employees in France a 13th-month salary. This is a bonus payment, usually equivalent to a month’s salary, paid at the end of the year.

France payroll tax: Contributions and deductions

In France, payroll tax consists of various contributions and deductions paid by both the employer and the employee.

Income tax 

Employers in France withhold their employees’ income tax and pay it on their behalf. Employee income tax is calculated through progressive tax brackets:

Annual income	Tax rate
Up to EUR 10,700	0%
Between EUR 10,701 and EUR 27,475	11%
Between EUR 27,476 and EUR 78,546	30%
Between EUR 78,547 and EUR 168,424	41%
Over EUR 168,425	45%

Social security

In France, both employee and employer payroll taxes include contributions to the social security system, calculated at the following rates:

Contribution	Employer rate	Employee rate
Capped old-age insurance	8.55%	6.9%
Uncapped old-age insurance	2.02%	0.4%
Autonomy solidarity contribution	0.3%	N/A
Health insurance: Maternity, disability, death	7% to 13%	N/A
Family allowances	3.45% to 5.25%	N/A
Work accidents	Variable	N/A
Housing assistance for companies with fewer than 50 employees (FNAL)	0.1%	N/A
Company with 50 or more employees (FNAL)	0.5%	N/A

Other employer-only contributions

In France, employer payroll taxes​ also include unemployment insurance, vocational training, and more. 

Contribution	Employer rate
Unemployment contribution	4.05%
National Wage Guarantee Fund (AGS)	0.20%
Vocational training	1%
Apprenticeship tax	0.68%
Mobility payment (transport) for companies with 11 or more employees	Variable
Participation in the construction effort (companies with 50 or more employees)	0.45%
Contribution to social dialogue	0.02%

France payroll compliance best practices

To stay compliant with employer payroll taxes in France​, businesses should be aware of the deadlines.

It’s also critical for employers to continually:

• Monitor France’s payroll tax laws, labor laws, and statutory requirements for any changes
• Carry out scheduled payroll audits to identify any errors
• Provide payroll training to staff

Or, rather than handling it all yourself, you could partner with Payoneer Workforce Management. 

Your options for payroll management in France

Payroll management in France can be done through the following methods:

1. Setting up a local entity: You’ll be in full control of the payroll in France, but you’ll need to work with a team of payroll experts to understand and comply with French labor laws. 
2. Hiring independent contractors: You could avoid setting up a France payroll by contracting workers, though it brings the risk of employee misclassification. 
3. Partnering with Payoneer Workforce Management: Our unified platform can help facilitate payroll without setting up an entity in France. Get expert guidance to navigate local regulations, income tax, social security contributions, and even assistance with onboarding and legal documentation. 

Payoneer Workforce Management is a workforce management platform that offers services allowing you to quickly onboard talent in over 160 countries. You can pay your international workforce in 70 currencies without setting up local entities.

Book a demo today!

FAQs

1) What is the payroll system in France?

Payroll in France requires employers to:

• Pay employees in France monthly
• Withhold employee taxes and social security contributions
• Meet a minimum wage of €1,766.92 per month

2) How do salaries work in France?

An employee’s salary is paid monthly in France, usually by the end of the month. It’s usually paid by wire transfer into a bank account, but may also be paid by check or cash, or through a workforce management platform like Payoneer Workforce Management.

3) What is on a French salary payslip?

In France, a pay slip includes details of the net salary paid and the social security contributions (retirement, sickness, provident, unemployment, training, CSG, etc.).