Definitive Guide to Hiring in France

Hiring in France

For companies that want to hire employees and run payroll in France without first establishing a business entity or subsidiary, Global Expansion provides Employer of Record services (EOR France).

Our EOR services streamline and simplify the global hiring process.  We handle the core global HR tasks - compliance, contracts, payroll, global benefits, and more - so that you forgo hours of ongoing admin, human error, and compliance risk.

In France, companies would historically establish a subsidiary or branch office to legally hire in that country. With Global Expansion, this step is no longer necessary. We have subsidiaries all over the world and therefore can legally hire on your behalf. The employees are ours only on paper and report directly to managers within your company.

Labor Laws in France

Employment laws in France are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on France’s policies here.

Employment Contracts

There are two (2) types of employment contracts in France:

1. Fixed-term contract
   • This contract includes specific start and end dates.
   • The maximum length of fixed-term contracts is 18 months.
   • Under certain circumstances, the fixed-term contract duration may extend to 24 months.
   • The employer and employee cannot terminate the fixed-term working contract prematurely without a qualified reason or mutual agreement.
   • All fixed-term contracts must be in writing.
2. Permanent employment contract
   • Employees agree to work for an employer for an indefinite period.
   • The working contract states the nature of employment, whether full-time or part-time.
   • Permanent employment contracts must include key details such as working hours and conditions.

Employee Probation Period

The Labor Code in France permits probationary periods to enable the employer to evaluate the employee’s competence and the employee to assess whether the job suits them. Indefinite-term employment contracts may provide for a maximum probationary period of:

• 2 months for blue-collar and white-collar employees
• 3 months for supervisors and technical employees
• 4 months for managers and professional staff

These probationary periods may be extended once, up to a maximum of double the original duration, if an applicable industry-wide collective agreement permits this.

Annual Leave in France

France has a mandatory vacation time period, which describes the vacation days in France for employees who have worked 12 months during the previous year. These workers are entitled to a minimum of 30 days (or 5 weeks) annual leave. This is prorated for employees having worked less than 12 months over the year.

Holidays in France

There are 11 official public holidays in France:

Maternity Leave France

• Mothers  have a right to 16 weeks' leave (in principle, 6 weeks before the expected date of childbirth and 10 weeks after);
• They are required to take at least 8 weeks leave (6 of which after childbirth).
• Mothers may be granted 2 additional weeks before the birth in the event of a pathological pregnancy and up to 4 weeks afterward if the birth leads to health complications.
• For the arrival of the 3rd child and any after that, the amount of leave is increased to 26 weeks (8 prenatal weeks and 18 postnatal weeks.)
• In case of multiple births, the prenatal leave is increased to 12 weeks for twins and to 24 weeks for multiple births.
• The postnatal period of compensation is set at 22 weeks for births of more than 2 children.
• In the event of a premature birth amounting to over 6 weeks before the expected childbirth date (with hospitalization of the child), the duration of maternity leave is increased by the number of days between the date of childbirth and 6 weeks before the expected date of birth.

Paternity Leave France

• Paternity leave is set at 25 days, or 32 days in the event of multiple births.
• Adoption leave is set at 16 weeks, or 22 weeks in case of adopting more than one child.
• Parents with at least 2 dependent children before the adoption benefit from 18 weeks.
• If the leave is shared between the parents, its duration is extended by 25 days (single adoption) or 32 days (multiple adoption).

Sick Leave in France

In case of an inability to work, a sick leave note must be written by the doctor. The daily allowance is only payable from the 4th day of sick leave. Sick leave has a maximum of 6 months.

On the day an employee stops working, they must satisfy the following conditions:

• Having worked for at least 150 hours over the 3 calendar months or 90 days before stopping work;
• Or having received a salary totaling at least 1,015 times the amount of the hourly SMIC over the 6 calendar months before stopping work.

After the 6th month of sick leave, the employee has to satisfy the following conditions:

• On the date that work was stopped, prove 12 months payments into the sickness benefits scheme;
• And have worked for at least 600 hours during the 12 calendar months or the 365 days before the date of stopping work;
• Or have received an income totalling at least 2,030 times the hourly Smic over the 12 calendar months (or 365 days) prior to stopping work.

The daily allowance is equal to 50% of the daily basic wage.

• The gross reference wage is limited to €2,885.61 gross per month. Therefore, the daily allowance paid cannot exceed €47.43.
• When the sick leave exceeds 3 months, the daily allowance may be reassessed (up to the maximum gross amount) in the event of a general increase in income.

Working Hours in France

The legal length of the work week in France is 35 hours in all types of companies. This typically results in a French working week of 5 days with, 7 hours per day.

There are some additional rules:

• An individual working day may not exceed 10 hours.
• Employees may not work for more than 4.5 hours without a break.

Overtime in France

Overtime must be paid as follows:

• 25% an hour for each of the first 8 hours of overtime (from the 36th to the 43rd hour inclusive)
• 50% for each hour after that

It should be noted that many exceptions are allowed, especially under collective labor agreements.

• In the absence of collective agreements stipulating otherwise, the overtime hours cannot be greater than 220 hours per year (Art. D212-25 of the Labor Code).
• Under the new law, the maximum weekly working hours can be extended to 60 hours on authorization by the administrative authority. This increase in weekly working hours is allowed only in exceptional cases.
• The average working hours however cannot exceed 46 hours per week.
• Some managerial staff classified as “autonome” work more than 35 hours a week, but are given additional holiday days.

Termination of Employment in France

There must be real and serious grounds for a dismissal to be deemed fair. Grounds may be personal or economic.

Dismissal on personal grounds (art. L. 1232-1): the employer must justify grounds that are valid and related to the individual in order to proceed with dismissal.

• These may include professional misconduct, incompetence, inaptitude, etc.

An employee who is declared unfit by the physician must be reclassified by the employer, taking into account his or her capacities (Articles L. 1226-2 and L. 1226-10).

• The new job must correspond as closely as possible to the former job, if necessary by means of adaptation measures or working time arrangements.
• The employer's reclassification obligation is deemed to be satisfied when the employer offers the employee a new job, taking into account the opinion of the occupational physician.

Dismissal on economic grounds (art. L. 1233-2, 1233-3): the employer must justify economic grounds in order to dismiss an employee.

• Dismissal on economic grounds is taken as dismissal on grounds that are not personal and related to the employee as a result of reorganization, employment reduction or a modification, refused by the employee, of an essential provision in the employment contract, as a result of economic difficulties or technological developments.
• The August 2016 Labour law clarified the definition of real and serious causes for dismissals for economic reasons.
  • It now explicitly includes a substantial reduction in at least one of several economic indicators listed in the law, such as losses, orders or turnover (Article 1233-3).

Dismissal of an employee on economic grounds can be contemplated only once all efforts have been made with regard to retraining and if the employee cannot be reassigned within the firm or the enterprises of the group to which the firm in question belongs (Art. L1233-4 French Labour Code).

• Dismissed workers benefit from a priority for re-hiring (L. 1233-45) Criteria for selecting which workers to dismiss include tenure and social characteristics (L. 1233-5, 1233-7).

Unfair: An unfair dismissal is a dismissal that is not based on real and serious grounds.

• For example, for a dismissal claimed to be on economic grounds, the sole aim of saving money or boosting the firm’s profits cannot be used as an argument to define economic difficulties.

The following conditions may not be used to justify dismissal on economic grounds:

• Economic difficulties when there is a marked increase in sales and when the dismissal is designed to boost profitability at the expense of stable employment.
• A void dismissal: dismissal for reasons with regard to the employee’s private life, based on discriminatory grounds or as a result of psychological or sexual harassment.

Notice Period in France

Each employee that is to be dismissed is entitled to a notice period, except if the dismissal was due to gross misconduct, negligence, or incapacity. The employee continues to work in the company under the same status and receives regular remuneration until the employment relationship is terminated. The length of notice depends on the employee's seniority in the company:

• The notice period for seniority below six months is set by collective agreement or company practice.
• One-month notice for six months to two years of seniority.
• Two months’ notice for more than two years of seniority.

The notice period commences on the day on which the letter of dismissal is presented to the employee. The notice period cannot be postponed or suspended except in case of an accident at work, an occupational disease or paid leave.

Severance in France

Severance pay is only awarded if:

• The employer terminates an indefinite-term contract.
• The employee has the minimum length of service required by the Labor Code or an applicable collective bargaining agreement (CBA). The minimum length of service has been reduced to eight months of seniority by the Macron Reform.

Severance pay depends on the employee's length of service and the relevant CBA's provisions. It is generally calculated on the basis of an employee's average salary in France (often including bonuses as well as basic salary) during the last twelve months of employment.

Employees receive mandatory severance pay (that is, one fourth of monthly salary for each year of service for the first ten years of service and one third for each year above ten years of service) if no CBA applies or the CBA rate is lower than the mandatory amount.

Employment contracts can also provide for severance payments, provided that their rate is higher than that of the CBA or the mandatory amount. However, severance payments in company directors' employment contracts must be approved by the company's corporate governance body.

France Salary and Wages

France minimum wage

The minimum wage in France is approximately €10 per hour or an estimated €1,500 monthly or €18,000 yearly, which is roughly the same amount in 2022 dollars.

France Salary Ranges

• The average wage in France for 2021 was €3,340 monthly or €41,100 per year before taxes.
• The median wage in France is significantly higher at €46,600.
• The maximum average salary in France is €221,000 with far higher actual salaries on record. This explains the difference between the average and median salaries.

France Salary Comparison

Those with 2-5 years of experience earn 32% more than those fresh out of college or junior employees. Those with 10 or more years of experience have a salary increment of 21%, while workers who cross the 15-year mark get an additional 14%.

Workers with a higher education degree get paid more for skills and knowledge. Those with a bachelor’s degree earn 24% more than those who only attained a certificate or diploma. Meanwhile, workers with a Ph.D. make 23% more than those with a Master’s degree, even if they do the same job.

On average, male employees in France make 10% more  than female employees in all industries.

13th Month Salary in France

There is no mandatory requirement to pay the 13th or 14th month salary. However, bonuses are common and are not specified whether they are holiday bonuses or performance bonuses. These may be contractual or discretionary, when the bonuses are contractual they give the employee a right to receive the bonus.

The French social security system is composed of various schemes providing a wide range of benefits. The comprehensive provisions for retirement in France especially stand out. This system includes:

• social security basic coverage
  • sickness
  • maternity
  • disability
  • death
  • work-related accident benefits
  • old age state pension
• unemployment benefits
• compulsory complementary retirement plans
• complementary death/disability coverage
• health insurance in France is also included e.g. complementary health coverage.

The contributions are shared between employer and employee; on average the employer's share of contributions represents 45% of the gross salary.

• For 2022, the employee’s share of French social contributions represents approximately 20% to 23% of the remuneration.

However, since the contributions are assessed using various ceilings, the average rate will decrease as the gross salary increases. Employers' contributions made to additional medical coverage schemes (which are mandatory and collective) are taxable.

Generally, for any employee who carries out a salaried activity in France, the employer withholds the employer's share and pays the employer's share of French social security charges.

However, France has entered into agreements with more than 40 countries whereby expatriates temporarily transferred to France may remain under the home country social security schemes and are exempt from French charges (scope of the exemption according to the applicable provision of the bilateral agreement), provided they hold a valid certificate of coverage.

Deductible Expenses in France

Employment Expenses

Salaries and other related benefits are taxed after deducting an employee's mandatory social security contributions, except CRDS and part of CSG, and after a standard allowance for professional expenses equal to 10% of taxable employment income (limited to EUR 12,829 on 2021 remuneration).

• An employee may elect to deduct actual professional expenses incurred instead of the 10% standard deduction; however, in this case, all expenses reimbursed by the employer must be added back to the taxable salary.
• Qualifying professional expenses include certain commuting expenses, meals taken while away from home, and professional documentation.
• Contributions made to foreign social security systems are also deductible for French PIT purposes for taxpayers qualifying under the provisions applicable to inbounds in France as well as for individuals who are seconded under EU regulation no. 8832004 or a social security agreement signed by France.

Personal Deductions

Taxpayers may be entitled to one or more of the tax credits or general deductions shown below:

• Limited tax credits are available for certain expenses with respect to principal residences, expenses for sustainable development, charitable contributions, domestic employees, students, and child care
• General deductions are available for child support and alimony payments
• Payments of alimony to an ex-spouse, and of child support to children under 18, made according to the provisions of a court settlement, qualify as fully deductible expenses.
• Support payments made to parents, grandparents, children over 18, or married children may qualify as a deductible expense (with a cap for children), provided that the beneficiaries are in need and that the need can be demonstrated.

Personal Allowances

The tax benefit per additional half-share for dependent children is limited to EUR 1,592 (limit) for each of the first two children and EUR 3,184 for each additional child.

• Children under 18 years of age and disabled children of all ages can be claimed as dependents.
• Children from the ages of 18 to 21, as well as children from the ages of 21 to 25 who are full-time students, can, upon request, be claimed as dependents.

Immigration France

Learn about immigration and migration in France, work visa requirements, work permits and more.

Salaried employment

If an assignee is a non-EEA national, one cannot perform a salaried activity or professional mission in France without an authorization.

The immigration reforms of 7 March 2016 and 2 November 2016 instituted a short-term authorization exemption, valid for stays of up to 90 days, consecutive or not, over a period of 180 days, from work authorizations for persons performing audit work or providing expertise in one of a number of areas including architecture, computer sciences, engineering, and finance.

This exemption is valid for both intra-group secondments and service-provider activity, and thus does not apply to work that would be considered as salaried activity for the host entity.

Some of the main work visas or visas for salaried employment are as follows:

• Short Stay Visa
• Long Stay Visa (temporary worker)
• Long Stay Visa (ICT trainee)
• Long Stay Visa (ICT posted employee)

Short-stay visa

This type of visa is generally issued for tourism, business trips or family visits. It is also issued to persons entering to France to take part in short training programmes, internships, conferences and corporate meetings, or to engage in remunerated activities (whatever the form), not exceeding 90 days.

This type of visa is also required for simple transit through France, once outside “international zone” at any airport:

• If you need to change airports to continue your travel.
• If you are waiting for a transfer flight at a hotel or at an acquaintance's home “Uniform Schengen” short-stay visa.
• This is a visa issued by a Schengen Area member country for transit or stay in part of or all Schengen space.
• It is not to exceed 90 days over any period of 180 consecutive days.
• The visa inserted in the relevant travel document bears the name of the territories in which the holder is entitled to stay.
• A Member State may request that the other Member States consult it upon receipt of visa applications from nationals of certain third countries or from certain categories of said nationals.

Visa requirements France overview

Learn about the visa policy and all the ways to obtain a regular or work visa in France.

Value Added Tax (VAT) in France

• France VAT rules are based on regulations drawn up by the EU, of which France was a founding member. The standard French VAT rate is currently 20%.
• As an EU member state, France is obliged to implement the VAT Directives, which provides guidance on VAT
• Once registered in France, the company’s obligations are not only to declare and pay the VAT but to follow French compliance rules included in guidelines as the ones on French invoices, foreign currencies conversion and reporting, credits notes and corrections.
• The standard VAT rate in France is 20%.
• Principal reduced rates are 5.5% and 10%. Other specific reduced rated exist such as 2.1% for goods from chemists or some newspapers or 13% for sales in Corsica Island.

Withholding Tax France

Dividends:

• Dividends paid by a French company to a nonresident shareholder are subject to a 25% withholding tax (reduced from 26.5% for 2021) unless a tax treaty provides for a lower rate or the EU parent-subsidiary directive applies.
• Under the directive, dividends paid by a French company to a qualifying EU parent company are exempt from withholding tax France (see “Controlled foreign companies” under “Anti-avoidance rules,” below, for rules on noncooperative countries).
• No withholding tax is imposed on dividends paid to residents. Interest: Interest paid by a French company to a nonresident lender generally is not subject to withholding tax (see “Controlled foreign companies” under “Anti-avoidance rules,” below, for rules on noncooperative countries).
• No withholding tax is imposed on interest paid to residents.

Royalties:

• Royalties paid to a nonresident entity are subject to the 25% standard corporate income tax rate for 2022 (reduced from 26.5% for 2021) regardless of the entity’s annual income (see “Rate” under “Corporate taxation,” above).
• The rate may be reduced or eliminated under a tax treaty, or where the royalties qualify for the benefit of the EU interest and royalties directive (see “Controlled foreign companies” under “Anti-avoidance rules,” below, for rules on noncooperative countries).
• No withholding tax is imposed on royalties paid to residents.

Fees for technical services:

• Fees paid for commissions, consultancy, and services performed or used in France are subject to the 25% standard corporate income tax rate for 2022 (reduced from 26.5% for 2021) regardless of the entity’s annual income (see “Rate” under “Corporate taxation,” above).
• The rate may be reduced or eliminated under a tax treaty (see “Controlled foreign companies” under “Anti-avoidance rules,” below, for rules on noncooperative countries).
• No withholding tax is imposed on such fees paid to residents.

Branch remittance tax:

• The after-tax income of a French branch of a foreign company is deemed to be distributed to nonresidents and is subject to a 25% branch tax for 2022 (reduced from 26.5% for 2021).
• The tax may be eliminated or reduced under a tax treaty and is not due if the foreign head office is located in the EU/European Economic Area (EEA) and is subject to income tax
• with no possibility of opting out or of being exempt, and the income is taxable in the foreign country.

Mandatory Benefits in France

Some mandatory benefits are created after a certain length of service of the employee (most notably, right to a severance indemnity or to a notice period, right to vote or participate in employee representatives' elections, and so on).

• The applicable collective bargaining agreement and company collective agreements may also award specific benefits linked to the length of service of the employees, such as:
• Certain leaves of absence (for example, parental leave (Parental rights).
• Increased protection on dismissal.
• Maintain salary during illness or maternity leave.
• Participate in the election of employee representatives and be a candidate.
• Benefit from profit-sharing plans.
• Seniority measures.

France Payroll

French residents are required to file annual income tax returns (Form 2042), in general, by the middle to end of May following the end of the relevant tax year (tax year is the calendar year), declaring their net income and charges incurred during the preceding calendar year.

• The official deadline for filing is in principle the end of February following the close of the calendar year, but this deadline is normally extended to different dates each year depending on the circumstances.
• The actual filing deadline for a particular tax year is determined by the tax administration and is reflected on the tax return forms issued to taxpayers.
• A married couple must file a joint return for all types of income and report their dependent children’s income, if any.
• Details of certain income items, such as capital gains, real estate income and income received abroad that is taxable in France, are reported on separate returns attached to Form 2042.

Payroll Accrual in France

Employee accruals

Country Accruals

The rate for accident and work varies based on company size and risks. The unemployment income limit is calculated based on income earned over the past 12 months, up to €13,712 per month.

Description:

Accident and work: This rate varies based on company size and risks.

Accrued Benefits in France

Why use Global Expansion to hire in France

Establishing a branch office or subsidiary in France can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because French labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by French law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into France. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our International Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.