France

Registrations and Establishing an Entity

The company is not required to have a legal entity established in order to process a payroll. Some conditions however may be required when processing payroll (CNFE registration or a liaison office set up); the main is the “Unions de Recouvrement des Cotisations de Sécurité Sociale et d'Allocations Familiales” (URSSAF) registration which handles social security deductions.

The timescale for completion of this process is four weeks.

Banking

It is not mandatory to make payments to employees or French authorities from an in-country bank account. Generally, banks are open from Monday to Friday 09.00AM to 6.00PM. Some banks are open from Tuesday to Saturday 09.00AM to 5.00PM.

Working Week

• Standard: 35 hours/week
• May be annualized to 1607 hours or 218 days
• RTT (working time reduction) applies for flexible time accounts

Holiday Accrual

• 5 weeks/year, accrual from June 1 to May 31 or calendar year
• Holiday pay must be itemised on payslips

Maternity Leave

• Varies from 16 to 46 weeks depending on birth number/history
• Minimum: 8 weeks before and 6 weeks after childbirth
• Employers pay during leave; protected from dismissal throughout

Paternity Leave

• 28 days (single birth), 32 days (multiple births)
• Initial 3-day birth leave followed by 4 days paid by Social Security, then optional extension

Sick Leave

• Employee must submit medical certificate within 48 hours
• 90% pay for first 30 days, 66% thereafter
• Duration increases with service

National Service

• No mandatory service

Tax & Social Security

The tax year runs from 1 January to 31 December.

Income Tax

The French Ministry of Economy and Finance is responsible for tax administration. From January 2019, personal income taxes are withheld on pay slips.

The current system of income tax collection is replaced by a withholding tax “PAS” (“prélèvement à la source”). It covers most incomes: salaries and wages, pensions, replacement income, self-employment income and property income.

Therefore, the employer will become a collector and third-party payer of personal income taxes.

Income Brackets

Income Tax Bracket Rate

• Up to €11,294: 0%
• From €11,295 to €28,797: 11%
• From €28,798 to €82,341: 30%
• From €82,342 to 177,106: 41%
• More than €117,106: 45%

Social Security

The social security ceiling for 2023 is €3,925 per month, and consequently to €47,100 a year.
There are several different social security institutions on behalf of whom the employer may have to deduct contributions. These institutions administer the following:

• URSSAF
• France Travail (former Pôle Emploi)
• Mutuelle funds
• AGIRC-ARRCO

Payroll

An employer must provide a pay slip (legal obligation); paper or electronic pay slips are very common in many workplaces. From January 2017, electronic pay slips were authorized in France, unless the employee disagrees.

Reports

Payroll reports must be kept for at least five years. The records can be kept electronically as long as the records can be printed out on request.

Reporting

Employers are required to file monthly DSNs (Nominative Social Declaration) to the DGFIP (Public Finances General Directorate).
The DSN return is a consolidated return which covers:

• DUCS Urssaf
• DUCS Agirc and Arrco
• DUCS pension/health/insurance
• UAD-DADS
• DMMO / EMMO
• Salary certificate (IYDD)
• Employer certificate for France Travail (AE)
• Collective agreement cancellation
• Special schemes
• Monthly Mission Statement (MMR)
• MSA contribution declarations

The DSN return includes “Déclaration Unifiée de Cotisations Sociales” (DUCS return).

New Employees

A new starter that has a social security number will require a Hiring Declaration (DPAE). A social security number is mandatory for anyone starting any employment. The “Déclaration Préalable à l'Embauche” (DPAE) is a key document that all employers must file for each new hire in the 8-day period before the employee commences work.

The purpose of the DPAE is to:

• Declare that the employee is about to work for the company
• Apply to register the employee for general social security
• Apply to register the employee for unemployment insurance
• Apply to register the employee with the occupational health service (DDTEFP)
• Prompt the arrangement of the compulsory medical examination required on commencing employment
• Add the employee to the expected list of records on the annual DADS return

Leavers

There is no specific timescale for leavers to receive their final payment. Final documents must be returned at the end of the following month.

No specific notification must be made to authorities in the event of a leaver; however, a France Travail wage certificate must be filled in on the website of the unemployment agency.

Employee Benefits

Expenses

General expenses should be refunded only on receipt and are not subjected to social charges. If a company car is also for private use it must be considered as a benefit in kind, subjected to social charges and income taxes.

Benefits In Kind

The luncheon vouchers called “Ticket Restaurant” entitles the beneficiary to purchase, in whole or in part a meal or, food preparation. These are supported partly by the employer and can be used during the calendar year of issue.

Any employee (including temporary workers) can receive one luncheon voucher per meal included in their daily work schedule.

Part-time employees whose daily work schedule does not include the lunch hour are not entitled to luncheon vouchers.

This quantity of vouchers may be reduced if the employee is on sickness leave or if he is having a business lunch and being refunded through expense report.

Visas & Work Permits

Individuals who are citizens of a country within the European Union (EU) or European Free Trade Association (EFTA) do not require a work permit.

Short-term Visa or Visa de Court Sejour

This type of visa is for tourist trips, business trips or for family visits.

This visa allows its holder to participate in short training courses, internships or conferences, company meetings, or carry out a paid activity.

Duration does not exceed 90 days.

Long-stay Visa or Visa de Long Sejour

This visa is for an extended tourist trip, carry out professional activity, purse education or to join family members.

The duration of this visa must be between three months and one year.

None listed beyond regulatory agency names and minor process differences already included in other sections.

Further Information

For more information, or assistance with France Tax enquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.