France

The peculiarities of the French labour market

Each labour market has some peculiarities. It may be tricky for foreigners to fully understand the payment methods, the taxes and other benefits related to them. In TalentUp, we are starting a series of different blog articles, one for each country. This article analyses the French labour market.

General data about the French labour market

In France, the 13th salary is very common, and some companies even pay the 14th salary to their workers. This is optional, not compulsory. The payment date is usually around November or December, but it’s up to the company’s decision.

Payroll taxes in France

Social security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.

Healthcare in France covers about 70%–80% of the medical costs, with the remainder being paid by supplementary private health insurance. Employers cover the cost of insurance for employees; unemployed people are responsible for paying it themselves.

Once contributions are paid, employees need to pay an income tax that varies depending on their gross salaries. 

Contingencies from self-employees

Self-employed workers’ social security contributions are calculated based on their self-employed, non-agricultural earnings that are taken into account for their income tax calculation

Example of net salary in France

As a reference, we use the average salary of a software engineer. In France, on average, software engineers earn 55,000€ annually.

The employer contributes from 17,358 to 29,760.5€ to social security and the employee 9,350 to 16,901.5€.

After paying the income tax, the employee has a net salary of 32,574.65 to 37,860.70€ coming from a gross salary of 55,000€.

Unemployment regulation in France

Before the resignation, notice should always be given to the employer. Even so, it can be either verbally or in writing, and there is no established notice period; some companies or industries establish it by contract.

When the employer is the one who wants to terminate the contract,  a preliminary dismissal interview must be set up and take place. 2 days to a month after the meeting, a letter of dismissal must be sent to the employee. Then, the notice period is:

The severance payment is done with the option that gives the most favourable income:

• Monthly average of last 12 months of employment
• Average monthly earnings of all months preceding dismissal
• One-third of the last three months

Different kinds of leaves in France

In France, there are 11 public holidays, with May 1st being the only statutory paid holiday.

Employees are entitled to 2.5 days of monthly leave, which represents 5 weeks a year.

Sick leaves start after the first three days. Sick pay represents 50% of the average daily earnings of the worker. In order to receive it, the employee needs to have worked at least one of the following:

• 150 hours in the past 3 months
• 90 days immediately before the leave
• Have contributed based on earnings of at least 1.015 times the legal hourly minimum wage in the last six calendar months.

An injured employee is entitled to their full daily wage for the day of the accident. 

• During the leave, the worker is paid a daily allowance of 60% of their daily wage. 
• From the 29th day on, the employee will receive 80% of their daily wage.

Leave for family events is:

• 1 day for the marriage of an employee’s child
• 2 days to announce the disability of a child
• 3 days for the birth in employee’s household or adoption
• 3 days for the death of a spouse or partner, a father, mother, father-in-law, mother-in-law, brother or sister (bereavement leave)
• 4 days for an employee’s marriage
• 5 days for the death of a child (bereavement leave)

Paid parental leave

One big particularity of the French labour market is that the duration of parental leave depends on whether it is the first, second or third birth and whether they are twins.

Male employees are entitled to three days of leave after the birth or adoption of a child. They are also entitled to 11 consecutive days of paternity leave (18 if there are multiple births or adoptions), which must be taken within the four months following birth or adoption.

Adoption leave is given and equal for both spouses, and its duration is:

• 10 weeks
• 18 weeks if the adoption increases the number of children to 3 or more
• 22 weeks for multiple adoptions

Other common French benefits

In some companies, it is common to receive disability or life insurance after one or two years of seniority. During this period, the employee receives 100% of his salary.

Many companies also give meal vouchers. The cost of meal vouchers is usually split 50%-50% between the employee and the employer, up to a ceiling defined by law.

For senior position holders, it is common to have a company car. Fuel reimbursement is included. For other positions, communication allowances for public transport and/or by bike are given.

Another common benefit is the chèques-vacances. This is a national voucher scheme for paying at gites, holiday camps, hotels, youth hostels, etc. The Agence Nationale pour les Chèques-Vacances (ANCV) is in charge of providing them.

How to employ a French worker

A foreign company that does not have a place of business in France and hires employees to perform work in France is subject to the French Social Security system.

The company must:

• Be registered in the URSSAF (Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales), which is the government organization that collects social security and family benefit contributions. The registration is fulfilled by completing the E0 form that is available on the net-entreprises website.
• Submit a nominative declaration known as DPAE (déclaration préalable à l’embauche), which translates to “a declaration before hiring.” It should be submitted prior to onboarding employees. You send the DPAE to the URSSAF. The DPAE is necessary for registering your employees with social welfare offices and enrolling them in the social security scheme. This declaration also requests approval for conducting a medical examination for your new employees.
• Carry out the employee hiring formalities (pre-employment statement, drawing up a pay slip, payment of contributions and social contributions…).

To declare and pay Social Security contributions, companies may sign an agreement to appoint a representative residing in France. However, this is not compulsory since employers  can also make all declarations and pay contributions in one go by way of the foreign firms slip (« titre firmes étrangères »/ TFE).