Several industries contribute to the French economy, namely energy, transport, manufacturing, technology, tourism, and agriculture.
Successfully expanding your business to France requires a deep understanding of the country’s laws and regulations, many of which are complex and bureaucratic. This guide provides all the information you need to successfully build a workforce in France.
Payroll and taxes in France
There are four income tax categories in France:
Personal income tax
An employee is considered a resident in France if:
Their home or main place of abode is in France
They conduct a salaried or non-salaried professional activity in France (unless they can prove that it is a secondary activity), or
They have the centre of their economic interest in France.
Regardless of their nationality, employees who fit any of the above criteria are taxable on their worldwide income.
The standard corporate income tax rate in France differs according to revenue. For 2022, the tax rate for all companies will be 25%, with a 3.3% surtax to be applied on top of the income tax.
French employers contribute to social insurance from withholdings on employee income, in addition to their own social insurance payments. These contributions fund social programs such as:
Pensions and supplementary pension plans
Work accident insurance
The National Housing Assistance Fund
Employers are required to remit payroll taxes on wages if they are not subject to VAT, or are subject to VAT on less than 90% of total sales. Rates vary from 4.25% to 13.6% based on the employee’s income. Employers will not need to pay if the tax owed is less than €1,200 per year.
In most industries, employers with at least 11 employees will need to pay apprenticeship tax, which is 0.68% of the total taxable wages and benefits. This is used to fund apprentice training.
Employee income tax rates in France are adjusted according to income and family size.
Standard income tax rate brackets are as follows:
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%
There is an additional surcharge of 3% to 4% on higher incomes.
Employees in France can choose a neutral rate instead, based on their monthly income. If the neutral rate is lower than the standard, the employee will need to pay the difference. If the rate is higher, they will receive a refund.
In France, taxable income includes wages, salaries and gross proceeds, such as benefits in kind. As an employer, you will need to deduct income tax from your employees’ wages and send it directly to the Directorate General of Public Finance.
Working hours in France
French working hours are typically 8am to 4pm or 9am to 5pm, with one hour allocated for a lunch break. However, this varies depending on the business and collective agreement.
The weekly working hours are 35 (based on seven working hours per day, five days a week). Any hours worked beyond this quota must be receive overtime payment.
Minimum wage in France
The minimum salary in France currently stands at €10.25 per hour, amounting to €1,554.58 per month based on a 35-hour working week, or €1,776.58 per month based on a 39-hour working week. This includes a 10% increase for overtime hours.
Employee Benefits in France
Mandatory employee benefits in France include:
Solidarity allowance for the elderly
Old age pension
The legal minimum retirement age in France is 62. The age of automatic entitlement to a full pension is 67. The qualifying period for a full pension depends on the employee’s date of birth (month and year).
You can credit coverage for periods that your employee received an unemployment benefit or disability pension (provided that the assessed degree of disability is higher than 66%).
You must pay this to low-income employees at age 65, as well as employees who have reached the legal minimum age for retirement and have been assessed as unable to work.
Mandatory benefits in France include pensions for widow(er)s aged 55 or older or who are disabled. Unmarried surviving partners or partners who had a civil partnership do not qualify.
If the widow(er) is aged 55 or older and has raised three or more children, they are eligible for a child’s supplement.
This grant is provided if the deceased was employed or received an unemployment benefit, sickness benefit or disability pension at the time of death.
Bonuses may be offered as a benefit, but they are not mandatory. If provided, they must be included in collective agreements or the employment contract (for example, as year-end premiums).
Employers can also pay performance bonuses, the extent and conditions of which should be set out in the employment contract, under “bonus plans”.
Medical insurance is a competitive employee benefit in France. All employees qualify for medical care benefits through the National Inter-Professional Agreement, which offers a minimum care basket.
However, companies can choose to provide greater coverage as part of their benefits package.
Optional benefits vary depending on the company. However, when considering supplementary benefits for your employees, think about what would be most helpful to their needs and how you can help them create the best possible sense of work-life balance.
Doing so will result in a more productive and engaged workforce, thus having a positive impact on your bottom line.
Additional benefits could include:
Flexible and remote working options
Additional holiday allowance
Fitness schemes (such as gym memberships or cycle to work incentives)
Types of leave available in France
Full-time employees in France are entitled to two-and-a-half days of holiday for every month they work. This equates to five full weeks of annual leave per year, as Saturdays are classed as working days).
Depending on the industry and collective agreement, some employees may only take annual leave after one full year of employment.
Annual leave days are accumulated annually in the period from June 1st to May 31st, to then be taken the following period. This means that if an employee commences work on April 1st, they can only take five days off in the period of June 1st to May 31st. However, you can be flexible on this as an employer when negotiating the contract.
The holidays in France are traditionally taken in July and August, the main holiday period. During these months, some organisations choose to shut down entirely.
According to French employment law, there are some limitations on how leave can be taken:
Employees cannot take leave for more than 24 working days at a time
The employee must take at least 12 working days of annual leave at one time
Vacations lasting more than 12 working days can be split up by the employer, in agreement with the employee
The fifth week of leave must be taken separately from the main holiday period
Employees can also receive some extra time off if a portion of the main holiday has been taken outside of the period of May 1st to October 31st. This should be one extra day if the portion lasts three to five days, or two extra days if the portion lasts for six or more days.
Some organisations manage the 35-hour working week by introducing longer vacations. The company decides when this leave is to be taken, but it is typically in August or the last week of December. Otherwise, this leave is applied when the workload in the company is low due to seasonal fluctuations.
It is also possible for companies to provide additional annual leave depending on how many years an employee has worked for the organisation.
It is also possible for companies to provide additional annual leave depending on how many years an employee has worked for the organisation.
France observes the following public holidays:
New Year’s Day
WW2 Victory Day
Assumption of Mary
All Saints Day
Employees can claim sickness reimbursements after being absent from their fourth day onwards. Employers can also pay additional compensation, depending on the collective agreement.
All employees who are paid a monthly salary and have completed at least three months of employment are eligible for payment of a proportion of their salary during sick leave. They must have a sick leave form from their doctor to qualify for this, which they should complete and send to the social security agency within 48 hours.
France's social security system provides employees with serious or prolonged illnesses with extended sick leave. To be eligible for sick leave of up to six months, the employee must:
Have worked for longer than 150 hours in the last 90 days prior to taking ill
Have paid social security contributions based on gross earnings equivalent to 1,015 times the minimum hourly wage in the last six months prior to taking ill
Maternity and Paternity Leave
Employees are entitled to a minimum of 16 weeks of paid maternity leave. Up to six weeks of this allowance can be taken as prenatal leave. Employees are entitled to shorten their maternity leave, but it is compulsory to take eight weeks minimum.
Prenatal leave is automatically extended if the birth date takes place after the estimated due date. However, postnatal entitlement does not change in this instance.
During maternity leave, the social security office pays a portion of an employee's salary. However, many collective agreements guarantee full salary payment. The employer needs to provide an annual salary certificate to the social security agency to allow the employee to receive social security benefits.
Employees can request for extended maternity leave if they have three or more children. After the third child, they are eligible for eight weeks of maternity leave before the date of birth and 18 weeks after.
New fathers in France are entitled to 28 days of paternity leave which must be taken within four months of the birth or adoption (this increases to 35 days for twins or more). Seven of these days are mandatory.
Employees must inform employers at least one month in advance, and employers need to provide a salary certificate to the social security office.
Types of employment contracts
In France, employment contracts are based on the nature of work required by the employer. There are four common types of employment agreements that include:
Contract Duration Indeterminée (CDI) These are permanent contracts with no end date and is subject to mandated labour laws and collective bargaining agreements (CBA) where applicable.
Contract Duration Determinée” (CDD) Fixed term contracts with a pre-determined end date for when a task is completed by the employee.
Apprenticeship These types of contracts are put in place when the objective is for the employee to obtain a professional certificate. It must be in written form with terms stipulating the training and employment activity.
Single integration contracts An employment contract for when an employer will receive financial aid while facilitating the employment of an employee who is facing difficulty in securing a job. This contract can be for temporary or permanent period of employment and requires a minimum of 20 hours of work per week.
Attracting talent in France
When it comes to recruiting employees in France, you will need to notify the government employment service, which has 600 offices throughout the country. However, once they have been notified of your vacancies, you can recruit staff as you wish.
However, most recruiting in France is done on a word-of-mouth basis, so it’s essential to consider local networking if you are looking to expand your business in the region.
Regardless of your recruitment methods, you need to ensure that you're offering appeals to the right workforce amidst an increasingly competitive job market. Consider the following when attracting top talent in France:
Training and development
Employers in France must cover the cost of employee vocational training. This means that all French employees are entitled to training, and qualifying employees are able to take leave to pursue training that will help them improve their qualifications or even change their careers.
Qualifying employees can attend a career development interview every two years with their employer. This approach to progression is an excellent opportunity for organisations to provide designated training programs designed to improve staff skills and boost their career prospects.
This will help businesses to retain and attract goal-oriented employees.
Businesses should review the ways in which they help employees achieve a strong work-life balance. This could include introducing flexible working hours, offering access to mental health support networks and creating a safe space for workers to express any concerns or suggestions they have for improvement within the business.
Termination of employment in France
France has strict regulations for the termination of an employment contract, so it is advisable to seek legal advice to make sure your organisation follows the legal guidelines and that you are fully aware of what the termination process involves.
An employment contract can be terminated without restrictions during the probationary period unless there is a collective bargaining agreement, or the employment contract states otherwise.
If an employee has passed their probationary period, set notice periods should be adhered to, in line with the collective bargaining agreement or contract of employment.
Termination at the employee’s request
If an employee wishes to terminate their employment relationship during the trial period, they must inform the employer via registered mail or letter, delivered by hand. The employer should then add the date they received the letter and sign it. The employee must provide a prior notice period, which will depend on how long the company has employed them.
Employees who want to leave the company after their probationary period is over must send their resignation letter by registered post or hand deliver it. They must also respect the notice period that is listed in the collective agreement. This type of registration doesn’t provide rights to unemployment insurance.
Termination at the employer’s request
If an employer wishes to terminate an employee’s contract during their trial period, they must let the employee know via hand-delivered letter of dismissal or registered mail. The employee must add the date of receipt to this, along with their signature. The employee will then provide a prior notice period, which will depend on their employment length since beginning the contract.
In cases where the employee has completed their trial period, there are two different types of dismissal:
Dismissal for personal reasons - for example, if the employee has not respected company rules or has not achieved their stated objectives
Dismissal for simple fault - for example, if the employee has committed serious misconduct or gross negligence
Once the dismissal notification has been received, the employee will need to give prior notice as fixed by law and the collective agreements.
Employers can exempt employees from giving prior notice, but they must remunerate them unless serious misconduct or gross negligence has occurred. In this case, the employment will end as soon as the notice of dismissal has been given.
Redundancy on economic grounds is reserved only for employers who are experiencing economic difficulties that do not enable them to continue employing staff.
In this instance, employers need to propose a professional security contract (CSP). In some cases, they will also have to propose a reclassification for their employees ahead of the procedure.
Following up after a contract termination
Once the contract has been terminated, the employer will need to submit the employee’s final payslip, along with a work certificate that details the dates of employment, position and classification in balance, and a receipt for the balance of all accounts of amounts paid on the last payslip to the employment centre. This enables the employee to receive unemployment insurance.
In the event of a contractual termination or ground for dismissal, the employer needs to propose the portability of the pension and mutual insurance benefits. This requires completing a form to be sent to the insurer.
Probation periods are not mandatory in French employment contracts, but they typically last between two to four months.
The notice period depends on how long the employee has worked for the company. Employees will usually need to provide one month’s notice if they’ve been employed for six months to two years.
Employees who have been employed for more than two years usually must provide two months' notice, and those in executive positions may need to provide a three-month notice.
Total taxable income is divided into the number of shares (‘parts') that reflects the taxpayer's marital status and the number of dependents.
Employers are required to provide severance payment, except in cases of serious misconduct or gross negligence.
Are background checks compulsory in France?
Background checks are limited to strictly necessary verifications of an employee’s references, qualifications, and experiences. Criminal background checks are only carried out in professions that require security responsibilities or involve working with children or sensitive materials and information.
What are my options for hiring in France?
Airswift offers a range of employment solutions for businesses looking to hire in France. These services make it easy for you to hire employees efficiently and within full compliance with French labor laws.
Our expertise and knowledge allow us to minimise risk while taking on the administrative responsibilities of hiring and onboarding candidates, allowing you to focus on growing your business.
Our contract hire services can help you fill temporary roles and provide your business with the agility to respond to shifts in needs and market demand.
For long-term hiring needs, Airswift’s professional search can help you discover talented candidates for permanent roles within your business.
Employer of record
For businesses that want to hire remote employees without setting up a physical entity, partnering with an Employer of Record in France simplifies the process of hiring with minimal compromise on time and expense.
An experienced Employer of Record lets you bypass the complications of physical entity setup and focus on growing your business. Tasks an EOR can help you manage include overseeing locally compliant payroll and managing statutory benefits.
*Although the information provided has been produced from sources believed to be reliable, no warranty, express or implied, is made regarding the accuracy, adequacy, completeness, legality or reliability of any information. For the latest information and specific queries regarding particular cases, please contact our team.
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