Euro, EUR

Currency

68.1 million

Population

2.6 trillion

GDP

33rd Ranked

Ease of Doing Business

French

Language

Monthly

Payroll Cycle
HOW EOR CAN HELP YOU

Grow your team in France

Benefits of hiring in France

France is one of the world’s most modern countries and a leader among European nations. The country is the world’s seventh-largest economy as of 2020 and the second-largest in the European Union after Germany.

France is one of the easiest countries to do business with, according to the World Bank’s latest Doing Business report from 2019.

France is also one of the most promising markets for tech firms considering global expansion, according to Velocity Global’s 2020 State of Global Expansion™ Report’s Global Expansion Tech Index™.

France is one of the easiest countries in which to do business, according to the World Bank’s Doing Business report.

Challenges of hiring in France

The French legal framework is protective of employees. An employee can only be dismissed in very specific circumstances and after the completion of a regulated process.

The Corporate Income Tax rate for businesses in France is 25%. The French government gradually reduced the Corporate Income Tax rate for businesses from 33.3% in 2017 to 25% in 2022. Foreign companies must pay a limited tax liability on their source income from the country.

The French Competition Authority may need to be notified of certain mergers and acquisitions, as anti-competitive practices are punishable offenses. Using an EOR in France ensures you avoid these potential penalties.

The French legal framework is protective of employees. An employee can only be dismissed in very specific circumstances and after the completion of a regulated process.

Cultural nuances of doing business in France

Use gendered titles and last names to greet clients and only use first names when invited. French professionals expect formal speech etiquette. For example, “Bonjour Madame Dubois,” or “Au revoir Monsieur Monet.”

Business introductions and meetings often begin and end with a firm handshake accompanied by an appropriate salutation.

The French appreciate when visitors show respect for their culture and language by learning basic French phrases or greetings and using them whenever possible.

The French appreciate passionate and deep conversations during business discussions, a common practice in France. Small talk is seen as a waste of time.

The French do not take a quick lunch break at their desk or alone in their office. Sharing lunch as coworkers, as a team, is seen as very important. The lunch break is usually several hours.

Work-life balance is highly revered and is considered sacred. Most employees often have an email signature that states, “If this email is sent outside of office hours, please do not reply immediately, unless it’s an emergency.” It can be considered a Human Resources violation of moral harassment to send emails past working hours, during the weekend, or during an employee’s vacation time, so be cautious of this when doing business in France.

The French appreciate passionate and deep conversations during business discussions; this is a common practice in France. Small talk is seen as a waste of time.

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Onboarding

Hiring in France

  • Employment in France

    When employing an individual in France, the following formalities must be adhered to:

    • The employer must fill out a pre-hiring declaration form for newly hired employees (“déclaration préalable à l’embauche”)
    • When hiring its first employee, the employer must inform the French Labor Administration (“Inspection du travail”)
    • The employer has to register the company with the complementary pension funds (“retraite complémentaire”)
    • The company has to acquire healthcare insurance (for medical expenses) and a provident insurance (for the risk of death, invalidity, and incapacity) that complies with the specific provisions of French law and of the applicable collective bargaining agreement (if any)
    • The full names of all employees have to be recorded in the staff register (“registre du personnel”)
    • When hiring a non-French employee (excluding European nationals), the necessary immigration formalities must be completed
  • Probationary periods in France

    Probationary periods in France help mitigate risk in hiring. Employees can be subject to a probationary period that enables the employer to assess employees’ skills. Unless an employee’s collective bargaining agreement outlines increased protections, the contract can be terminated during the probationary period without cause and at no additional cost to the employer outside of providing the mandatory notice.

    This probationary period is not automatic and must be provided in the employment contract. The French Labor Code provides that the probationary period can be two to four months (depending on the employee’s position). Standard probationary periods are two months for office and blue-collar workers (“employés et ouvriers”), three months for supervisors and technicians (“agents de maîtrise et techniciens”), and four months for executive employees (“cadres”).

PAYROLL

Easily navigate payroll laws, contributions, and requirements in France

Varies

Tax due date in France

 Tax return deadlines vary slightly each year and are announced in late spring of the same year the taxes are due. 

    Monthly

    Payroll cycle in France

    The payroll cycle in France is generally a monthly cycle, with wages paid by the last working day of each month.

    35 HRS/WK

    Average working hours in France

    Usually, employees work 35 hours per week.

    • Minimum wages and salaries in France

      As of May 1, 2022, the minimum wage in France is €1,645.58 per month or €11.75 per hour on a 35-hour working week. This minimum wage is one of the highest in the European Union.

    • Bonus payments in France

      Bonuses in France are not mandatory unless it is part of a collective bargaining agreement; however, most companies offer some type of bonus pay. Many French employers pay their employees a bonus in December, known as the 13th-month salary.

    • Overtime in France

      Compared to other countries, overtime in France is less common. However, employers can agree to a longer working week with their employees. Employers must pay for any time worked over 35 hours a week by 25% more per hour for the first eight hours of overtime. After that, employees earn 50% more per hour.

      Employees are entitled to at least a 20-minute break for every six hours of work. Collective bargaining agreements may place other stipulations on the number of hours employees can work and on overtime pay.

    TAXES

    Taxes and social security in France

    Tax thresholds in France

    Non-French citizens categorized as French tax residents are taxed as French citizens on their salary and social security contributions. French tax residents are defined by having one of the following characteristics apply to them:

    • They live in France, or they have their main residence in France
    • They mainly work in France
    • They mainly have their economic affairs and interests in France

    If a non-French citizen is not a French tax resident and works in France, a withholding tax at a progressive rate of 0%, 12%, or 20% is imposed on salary payments unless a double taxation treaty provides otherwise.

    There is a tax deduction of 10% for a professional expenses allowance limited to €12,652 per year.

    Health insurance in France

    All workers are required to register for French Social Security. This system covers workers in case of injury, illness, maternity, paternity, disability, and death.

    The French Social Security system provides universal health coverage, called PUMA, which ensures anyone who works for an employer in France will have their medical expenses covered from the day they start working. A worker’s family can also benefit from this coverage. The medical expenses which are covered in full or in part include:

    • Medical and paramedical expenses
    • Prescription medication expenses
    • Hospital expenses
    • Transportation expenses when covered by a prescription

    PUMA health insurance in France is also accessible to all individuals, regardless of employment status, who have been residents in France for at least three months.

    Pension in France

    The required age to apply for a retirement pension is 62 years for anyone born after 1955.

    The amount of the retirement pension paid by the French Social Security system depends on a worker’s duration of insurance and the average annual income of their career’s 25 most advantageous years. Retirees are entitled to draw between the minimum rate set at 37.5% and the full rate set at 50% of their average annual income from their career’s 25 most advantageous years.

     

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    LEAVE

    Leave entitlements in France

    • Annual leave in France

      Employees are entitled to a minimum of five weeks paid vacation time a year and public holidays.

    • Parental and maternity leave in France

      As of July 1, 2021, maternity leave in France includes 16 weeks leave (in principle, six weeks before the expected date of childbirth and ten weeks after). Mothers are required to take at least eight weeks’ leave. Six weeks are taken right after delivery, and they may be granted two additional weeks before the birth of the child in the event of a pathological pregnancy. If the birth leads to health complications, mothers can take up to four additional weeks after the birth.

      Paternity leave includes 25 consecutive days or 32 consecutive days in the event of multiple births.

      Adoption leave is set at 10 weeks for one child or 22 weeks in the case of adopting more than one child.

      The amount of daily maternity, paternity, or adoption leave allowance is calculated from the average income over the last three months which leads up to the pre-natal leave. In January 2021, the allowance amount was set between €9.66 and €89.03 per day.

    • Sick leave in France

      Employees absent due to illness or injury receive daily indemnities from the Social Security system for a maximum of three years. Emergency provisions for sick leave pay have been implemented as a result of COVID-19.

    • Regional and national holidays in France

      France has the following public holidays, which are not included in the minimum holiday entitlement by the French Labor Code. However, employers generally give their employees all of France’s public holidays off work. Furthermore, collective bargaining agreements may dictate employees get these days off work:

      • New Year’s Day (January 1)
      • Easter Monday (March/April, this fluctuates each year)
      • Labor Day (May 1)
      • Victory in Europe Day/End of World War II (May 1)
      • Ascension Day (May/June, this fluctuates each year)
      • Whit Monday (May/June, this fluctuates each year)
      • Bastille Day/National Day (July 14)
      • Assumption of Mary (August 15)
      • All Saints’ Day (November 1)
      • Veterans Day/Armistice Day/Remembrance Day: End of World War I (November 11)
      • Christmas Day (December 25)
    BENEFITS

    Employment benefits in France

    Social Security (“Sécurité Sociale”) is the French public health insurance system that covers all life risks for residents of France. Employees and their families are fully eligible for France’s comprehensive Social Security system, which includes:

    • Health, maternity, paternity, disability, and death insurance
    • Occupational accident and illness insurance
    • Government pension contributions
    • Family allowances
    • Unemployment benefits

     

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    TERMINATION

    Termination and notice period in France

    An employer must give notice before dismissing an employee, except in cases of serious misconduct or negligence. The notice period in France depends on the employee’s length of service; however, it is usually one or two months. Different notice period durations may also be provided for by the employee’s collective bargaining agreement. A company may release the employee from working during the notice period and pay out severance in lieu of notice. Severance pay depends on the employee’s length of service and the relevant collective bargaining unit provisions. It is generally calculated on the basis of an employee’s average salary during the last 12 months of employment.

    FAQ

    • What is an employer of record in France?

      An employer of record (EOR) in France is a third-party organization that becomes the full legal employer of your in-country workforce. The EOR compliantly handles employer-related responsibilities like onboarding, pay, and benefits while enabling you to continue managing the day-to-day operations of your team.

    • How does an employer of record in France help hire talent?

      An EOR enables you to hire in France without going through the complexities and restrictions of setting up a legal entity. As an EOR, Velocity Global acts as the legal employer, hiring your new team members through local, compliant employment contracts—you get back the time and flexibility to focus on your growing business.

    • Can an employer of record run payroll in France?

      When you work with Velocity Global’s EOR solution in France, our experts compliantly handle all payroll and benefits for your team members in the country.

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