Setting up and maintaining France payroll outsourcing
France’s strong, diverse economy, well-connected Western European location, and high standard of living make it an attractive place for foreign businesses to expand.
If you’re interested in building your business in France, then one of the first steps is likely to be hiring a French workforce, which means establishing a payroll in France. This can turn into a lengthy and time-consuming process for many organizations, with a complex and unique set of regulations to navigate.
Many organizations choose to outsource this difficult phase, bypassing the administration to focus on the real work of expanding in France. At Horizons, we offer full France payroll outsourcing services for organizations expanding into the country, whether you have already registered a legal entity in France or not.
Why choose the Horizons payroll solution?
If you have an entity
If you have already registered an entity for your business in France, we can provide France payroll outsourcing support to help you establish and manage your local payroll. In addition, we can manage all of you HR, contracts, and legal compliance work to ensure you are fully equipped to hire locally as rapidly as possible
This level of outsourcing is a good choice for any company that already has an entity in France and could benefit from expert payroll support.
If you don’t have an entity
For organizations that have not established an entity in France, we can offer a more comprehensive France payroll outsourcing service using our France subsidiary to act as employer of record, while also taking care of HR, contracts, legal compliance, and more.
This flexible service helps you to achieve all the key benefits of hiring locally in France with the ability to scale rapidly and a reduced level of risk.
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France payroll guide
What are the rules for payroll and withholdings in France?
France’s unique tax system can be difficult to follow. The country has a progressive tax model, with higher earners paying more in taxes. The income tax rate is between 0% and 45%, depending on income level. There is also a surtax of either 3% or 4% for the highest earners.
Rates are affected if employees are married or have certain numbers of children.
There are also several social funds that cover all kinds of state benefits, such as health insurance, pension funds, unemployment insurance, and so on. Employers usually need to contribute around 45% of salaries to these funds, and employees contribute roughly 22% of their salaries.
Health, Maternity, Disability, Death | 13.00% |
Autonomy Solidarity Contribution | 0.30% |
Old Age Insurance (ceiling of 3,311 EUR) | 8.55% |
Family Benefits | 5.25% or 2.45% |
Unemployment (ceiling of 13,244 EUR) | 4.05% |
AGS (Wage Guarantee Insurance) | 0.15% |
Total Employment Cost | Up to 28.50% |
Old Age Insurance (ceiling of 3,311 EUR) | 6.9% |
Social Security Surcharge | 9.20% |
Total Employee Cost | Up to 16.10% |
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+3.0% surcharge for income over 250,000 EUR
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Progressive rates from 0.0-45% |
Contractual entitlements and termination regulations
A formal contract of employment should always be provided when hiring locally in France. Such employment contracts should always feature clear details of any relevant entitlements like vacation leave and sick pay, as well as termination rules.
Severance pay is generally required for terminations after one year of employment, and the mandatory rate is one-fifth of monthly salary for every year of the first ten years with an employer, then one-third of monthly salary for each year after.
French termination terms and severance payments can be complicated and can depend on many different things, such as collective bargaining agreements (CBAs). If the process is particularly complex, it is usually best to get legal help and negotiate a settlement with employees.
How to set up France payroll outsourcing
The most important thing when setting up a France payroll outsourcing system is preparation. You will need to ensure you are fully compliant with the complex regulations and have strong written contracts in place for each employee, or you may be risking expensive legal trouble.
Alternatively, you can choose to outsource the setup and administration of your France payroll to a global PEO. At Horizons, we provide extensive France payroll support, helping you avoid the hassle of navigation the country’s complex legal framework.
Manage payroll in France
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