France is one of the largest tourist destination in the world, but it is also a hub of global business expansion and growth. With the 7th largest economy in the world and a sophisticated workforce and infrastructure, France offers companies huge opportunities for international growth.

France has unique labor laws and employee protections, which makes payroll in France one of the most difficult and complex processes to manage. France has specific requirements for business communications to be conducted in French, and requires that workers have unemployment contracts that meet local standards and are drafted in the French language.

The French government is heavily involved in privatized business. Companies must complete incorporation to register the business as a subsidiary company, branch office, or liaison office. A subsidiary company is the most common entity among foreign investors. Businesses must register with the French Patent and Trademark Office, and publish incorporation approval in the public newspaper.

Payroll and Tax Considerations

  • Minimum wage is EUR 10.25 per hour
  • The statutory working hours are 35 hours per week or 7 hours per day
  • Severance pay depends on the employee length of service and the collective bargaining agreement. Severance pay is only awarded if the employer terminates an indefinite term contract for a reason other than serious or gross negligence or if the employee has worked for the company for at least 8 months
  • French residents are subject to personal income tax (PIT) on worldwide income. Non-residents are subject to tax only on their income in France
  • Tax rates are progressive from 0-45% plus a 3-4% surtax on income exceeding EUR 250,000-1,000,000 in certain cases
  • The tax year ends on December 31st each year and tax declarations must be made in May

HR and Statutory Requirements

  • Full-time employees earn 2.5 days of annual leave every month. The total annual leave cannot exceed 30 working days in a year
  • Employees under 21 with dependent children earn 2 extra days of leave per child
  • Workers are entitled to sick leave. The law does not mention specific number of days, but employees can be absent from work and use a doctor note to justify the absence
  • Employees are entitled to 16 weeks maternity leave in which 6 weeks can be taken before the birth. Eight weeks of maternity leave is compulsory
  • Employees are paid a maternity allowance which is equal to the average daily wage of the 3-month period preceding prenatal leave up to a ceiling of EUR 3,377
  • Paternity and childcare leave is a total of 25 calendar day or 32 calendar days in the event of multiple births. Employers must pay 100% salary during the first 3 days of birth leave
  • General retirement age in France is 62. In order to qualify for full pension, individuals must also make an appropriate amount of contributions. There are 2 retirement schemes in France

There are many reporting requirements in France including:

  • Shares & BIK (Benefit in kind): Expenses and reimbursements paid throughout the year need to be reported in the Annual Declaration of Reconciliation of Wage
  • Declaration Annuelle des Donnees Sociale (DADS): This is a statement employers complete that summarizes the benefits and total salary paid to employees. This must be submitted to the Caisse Régionale d’Assurance Maladie (CRAM)
  • Fiche Fiscal/Employee Summary of Earnings: This document is not mandatory to provide to employees, but employers can distribute if they choose to do so
  • ASSEDIC – Unemployment Social Security Annual Summary: This report details employee unemployment contributions to USSRAF (expats have to submit reporting to GARP)
  • URSSAF – The Social Security Annual Summary: This documentation is submitted to the Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales
  • Declaration Nominative Annuelle (DNA): The ‘Annual Nomination Statement’ provides the accuracy of wage contributions to benefit schemes. Reports are submitted to MEDERIC
  • Gras Savoye: Detailing medical and life assurance contributions, reports must be submitted by the February 28th

Holidays in France

  • January 1 – New Year’s Day
  • April 18 – Easter Monday
  • May 1 – Labor Day / May Day
  • May 8 – WWII Victory Day
  • May 26 – Ascension Day
  • June 6 – Whit Monday
  • August 15 – Assumption of Mary
  • November 1 – All Saints’ Day
  • November 11 – Armistice Day
  • December 25 – Christmas Day

Managing payroll and compliance in France is challenging. Blue Marble has simplified payroll in France with a cloud-based platform with customized reporting so you have real-time access to payroll. Our hybrid service model gives you a dedicated US-based service team and direct access to in-country experts in France to answer questions when they come up. Talk to our team today to simplify payroll and HR compliance in France: click here to get started