Hiring and paying employees in France involves navigating a complex regulatory framework, including labour laws, tax obligations, and employee benefits. This guide offers a detailed breakdown to help international businesses understand how to hire and pay employees in France effectively.
Hiring employees in France
Employment contracts
In France, all employment agreements must comply with the French Labour Code (Code du travail). Employment contracts can take several forms:
- Permanent contract (CDI): The default and most common contract with no set end date.
- Fixed-term contract (CDD): For temporary employment with a specified duration.
- Apprenticeship contract: Designed for young workers undergoing professional training.
- Part-time contract: Proportional working hours to full-time employment, detailed explicitly.
Key requirements:
- Contracts must generally be in writing (especially for CDD, part-time, or temporary work).
- The language of the contract should be French. A translation may be provided for non-French-speaking employees.
- Include mandatory information: job title, salary, working hours, probationary period, and any applicable collective bargaining agreements (conventions collectives).
Recruitment process
- Comply with anti-discrimination laws during hiring (e.g., no bias based on gender, ethnicity, religion, or disability).
- Non-compete clauses are enforceable but must be specific, reasonable, and compensated.
French employment law essentials
Working hours
The standard workweek in France is 35 hours. Overtime must be compensated, typically with an additional 25% for the first eight hours and 50% for subsequent hours.
Minimum wage
As of 2025, the SMIC (minimum wage) is €11.52 per hour or approximately €1,750.00 gross per month for a full-time employee. It is revised annually.
Probationary periods
Probationary periods vary by contract type:
- Non-executive roles: Up to 2 months, renewable once.
- Executive roles: Up to 4 months, renewable once.
Termination
French law protects employees from unfair dismissal. Employers must follow strict procedures, which include:
- Providing written notice.
- Offering severance pay based on length of service.
- Adhering to notice periods (usually 1-3 months).
Payroll obligations in France
Gross to net salary breakdown
France has a high social contribution rate, meaning the gross salary differs significantly from the net salary. On average:
- Employer contributions: 25-42% of gross salary.
- Employee contributions: 20-25% of gross salary.
Payroll taxes and contributions
Employers must calculate and pay various social charges:
- Social security contributions: Cover health, maternity, disability, retirement, and unemployment benefits.
- CSG and CRDS: Additional employee-paid contributions for public services.
- Supplementary pension contributions: Required under schemes such as ARRCO (non-executives) and AGIRC (executives).
- Other levies: Include work accident insurance and transport tax (if applicable locally).
Payslip requirements
Payslips must be provided to employees monthly and include:
- Gross and net salary.
- Details of deductions (e.g., social security, taxes).
- Employer’s contribution details.
- Reference to collective agreements.
Employee benefits in France
Statutory benefits
- Paid leave: Employees are entitled to 5 weeks of paid leave annually, plus public holidays.
- Sick leave: Paid sick leave is partially covered by Social Security and topped up by the employer depending on the duration of employment.
- Parental leave: Includes 16 weeks of maternity leave (longer for multiple births) and 11 days of paternity leave, which are partially paid by Social Security.
- Unemployment benefits: Funded by employer and employee contributions.
Additional benefits
Employers often provide supplementary benefits, including:
- Supplementary health insurance: Mandatory since 2016, co-financed by employers and employees.
- Meal vouchers: Commonly offered through schemes like Ticket Restaurant.
- Transport allowances: Mandatory in some regions for public transport costs.
Tax implications
Corporate tax on employment
Employers in France pay taxes on salaries, such as:
- Apprenticeship tax: For companies exceeding certain workforce thresholds.
- Corporate social contribution (C3S): Applies to companies with turnover above €19 million.
Personal income tax
Employees are responsible for their income tax, which is withheld at the source (PAYE system). The tax rate ranges from 0% to 45% depending on income brackets.
Steps to hire and pay employees in France
1. Register your business
International companies must register with the French URSSAF (Union de Recouvrement des Cotisations de Sécurité Sociale) to obtain a SIRET number, which is required for payroll processing.
2. Set up payroll
You’ll need to:
- Choose payroll software compliant with French laws or outsource to a payroll provider.
- Ensure compliance with collective agreements.
3. Draft employment contracts
Prepare contracts that comply with the French Labour Code and sector-specific agreements.
4. Manage payroll
Calculate gross-to-net salaries, apply deductions, and ensure timely reporting of contributions to authorities.
5. File monthly declarations
Submit a Déclaration Sociale Nominative (DSN) to the French government, summarising payroll taxes and social contributions.
Payroll process in France
The payroll process in France is highly regulated, with numerous mandatory steps and compliance requirements. Employers must ensure accurate calculations for salaries, deductions, and contributions while adhering to deadlines for reporting and payments. Below is a step-by-step outline of the payroll process in France:
1. Employee registration
Before an employee begins working, employers must:
- Declare the hire to URSSAF using a Déclaration Préalable à l’Embauche (DPAE) at least 8 days before the employee starts work. This declaration covers:
- Social security registration.
- Mandatory health insurance enrolment.
- Notification to labour authorities.
2. Determine gross salary and benefits
The gross salary forms the basis for calculating deductions. It includes:
- Basic pay.
- Bonuses and allowances (e.g., transportation or meal vouchers).
- Overtime payments (if applicable).
Employers must also account for additional benefits like supplementary health insurance or retirement plans.
3. Calculate deductions
Employers deduct mandatory employee contributions from the gross salary, including:
- Social security contributions: Covering health, maternity, and pension benefits.
- CSG and CRDS taxes: Solidarity taxes for funding public services.
- Supplementary pensions: Contributions to ARRCO and AGIRC schemes.
Deductions must comply with the legal caps and rates, which vary depending on income brackets and benefits.
4. Employer contributions
In addition to employee deductions, employers are responsible for:
- Employer-side social contributions, which typically range from 25% to 42% of gross salary.
- Contributions to unemployment insurance, work accident insurance, and transport levies (where applicable).
These contributions must be factored into the overall cost of employment.
5. Generate French payslips
French labour law mandates that payslips:
- Include detailed information about gross salary, deductions, employer contributions, and the final net salary.
- Be delivered monthly to employees.
- Follow the standardised format to ensure clarity and legal compliance.
6. Submit the DSN
The Déclaration Sociale Nominative (DSN) is a monthly declaration that consolidates all payroll-related reporting, including:
- Employee social security contributions.
- Employer contributions.
- Tax and pension information.
The DSN must be submitted electronically to the French government by the 5th or 15th of the following month, depending on the payroll cycle.
7. Pay employees and contributions
- Employee salaries: Payments must be made on a consistent schedule (e.g., monthly) and typically by bank transfer.
- Contributions: Employers must transfer contributions to the relevant authorities, including URSSAF, pension funds, and tax offices, by the deadlines specified in the DSN.
8. Year-end reporting
At the end of the fiscal year, employers must provide employees with annual wage summaries (Bulletin Annuel de Salaire) and fulfil tax declarations, including:
- Reporting taxable income withheld from employees.
- Reconciling employer social contributions.
Working with payroll providers in France
Given the complexity of the French payroll process, many businesses choose to use payroll software or outsource to a specialised provider. Payroll providers help manage compliance, reduce administrative burdens, and ensure accurate reporting and payments. See our detailed guide to the best international payroll services providers.
Conclusion
Hiring and paying employees in France requires compliance with intricate regulations. From drafting contracts to managing payroll taxes and benefits, a clear understanding of local laws is essential. Whether managing payroll in-house or outsourcing, investing in compliance will ensure smooth operations and a positive employer reputation in France.
FAQ
While it’s not legally required to hire a French-speaking payroll manager, it’s highly recommended. Payroll processes in France are intricately tied to the French Labour Code, tax system, and collective agreements, which are all written in French. Misinterpretations can lead to costly errors. Alternatively, outsourcing to a local payroll provider can alleviate this requirement.
Collective bargaining agreements can set additional requirements on top of national labour laws. These may include:
1. Higher minimum wages.
2. Specific bonuses or allowances.
3. Additional leave entitlements or benefits.
Employers must identify and comply with the relevant agreement for their industry or region.
Yes, the French government offers various incentives to reduce labour costs for employers, including:
Exonération des cotisations patronales: Partial exemption from employer contributions for low-income earners.
Apprenticeship contracts: Lower social contributions for hiring apprentices.
Start-up and SME incentives: Tax credits or reduced contributions for innovative or small businesses.
No, salaries in France must be paid in euros (EUR), the official currency. This ensures compliance with French labour laws and facilitates accurate social contribution and tax calculations.
Failing to pay social contributions or submit the DSN on time can result in:
1. Late payment penalties, often calculated as a percentage of the outstanding amount.
2. Interest charges on unpaid contributions.
3. Legal actions or audits by the French authorities.
If an error occurs on a payslip, employers must:
1. Issue a corrected payslip with a clear indication that it is a revision.
2. Adjust the subsequent DSN report to reflect the corrected figures.
3. Notify the employee of the error and the rectified amounts.
Yes, remote employees residing in France are subject to the same payroll regulations as in-office staff. This includes adherence to French social contributions, taxation, and minimum wage laws, regardless of the employer’s location.
Bonuses are treated as part of the gross salary and are subject to the same deductions and contributions as regular pay. However, certain types of bonuses, such as profit-sharing bonuses (intéressement), may qualify for reduced social charges if specific criteria are met.
Severance pay is generally required for dismissals except in cases of gross misconduct (faute grave). The amount depends on the employee’s length of service, with statutory minimums applicable unless a collective agreement specifies higher amounts.
A 13th-month salary is not mandatory under French law but is a common practice in many sectors, particularly where stipulated by a collective bargaining agreement. It is usually paid as a bonus in December or split across two payments during the year.
Salary adjustments typically require:
1. Agreement with the employee, unless tied to mandatory increases (e.g., SMIC adjustments).
2. Documentation of the change in an addendum to the employment contract.
3. Notification to payroll systems to ensure compliance with updated rates for contributions and taxes.