Running payroll in France

French legislation is known for being very complex and difficult to navigate for foreign employers. This does not only apply to local labor law and the countless collective bargaining agreements, but also to payroll rules and regulations. As confirmed by the 2023 Global Payroll Complexity Index, France remains the unchallenged leader when it comes to payroll complexity.

However, the country has seen some legislative changes in the past few years which have lessened the reporting burden on employers with regard to income tax and social security, as a new universal tax and social charges declaration system has been introduced.

Before employers can start processing payroll in France, they must undergo a series of registration processes with the local authorities, including social security bodies and tax authorities. Employers need to register with the URSSAF, which is the national institution responsible for collecting social security contributions from employers. There are several regional centers, and the registration must be done with the one closest to where the company is registered.

In case the company doesn’t have a permanent establishment in France, it’s the URSSAF closest to where the employee is based that is responsible. Every new employee needs to be reported to URSSAF via a hiring declaration (DPAE). The registration must be completed eight calendar days before the official start date. In addition, new hires also need to be registered with the mandatory social security schemes, such as health, pension, and unemployment.

The French social security system is fairly complex and consists of many different institutions and authorities. Social security contributions are shared between employers and employees. Tax rates and bands increase with income.

Tax Considerations

Resident employees pay income tax according to a progressive tax regime which comprises five tax rates ranging from 11% to 45%. Individual income of up to EUR 11,520 per year is tax free (valid for the 2025 tax year).

Income exceeding EUR 250,000 is subject to a 3% surcharge (EUR 500,000 for couples). For income beyond the EUR 500,000 threshold (EUR 1,000,000 for couples), the surcharge is 4%. Here is an overview of the personal income tax bands and rates (last verified March 2025).

The indicated tax thresholds are the same for single taxpayers and married couples with children, but the calculation of the net taxable income works differently depending on the family status. For married couples and those with children, the net taxable income is divided into different shares (i.e. two shares for married couples without children, 2.5 shares for a couple with one child etc.) before being taxed according to the above given tax rates. Families with children therefore pay less tax than childless couples or singles.

Tax Withholding and Reporting

In 2019, France adopted the PAYE system for sourcing income tax. This means that income tax must be withheld directly from employee salaries and submitted to the French tax administration (Direction Générale des Finances Publiques). Tax payments are made through the official internet portal.

In addition, a monthly declaration must be filed online which contains a summary of wages, income tax and deductions for each employee as well as information on social security contributions. This declaration is called DSN (Déclaration Sociale Nominative).

The deadline for filing the DSN varies depending on the size of the company:

• For companies of more than 50 employees: DSN due by the 5th of the following month

• For companies of less than 50 employees: DSN due by the 15th of the following month

Social Security Contributions

Employers are obligated to withhold social security contributions from employee salaries as well as make their own contributions. The contributions need to be declared and submitted along with the employee’s income tax in the monthly DSN.

For employees, contributions amount to between 23% and 25% of their gross earnings, while employers have to contribute up to 42% of an employee’s gross salary. Contributions include (but are not limited to):

• General social security levy (CSG),

• Health/maternity/disability/death insurances,

• Family benefits fund,

• Pension insurance,

• Social security debt reimbursement (CRDS),

• Unemployment insurance,

• Complementary pension fund(s),

• Workers compensation,

• Vocational training and apprenticeship tax,

• Wage guarantee insurance, and

• Complementary health insurance (not mandatory).

Employees in France enjoy a high level of protection and a wide range of statutory benefits. These include:

• Annual leave: 30 days per year for employees working six days per week or 25 for those working five days per week, plus 11 public holidays

• Maternity leave: 16 to 46 weeks, depending on the number of births and the total  number of children

• Paternity leave: up to 28 days (comprising 3 working days immediately after birth and 25 calendar days following) for a single birth and up to 35 days (comprising 3 working days immediately after birth and 32 calendar days following) for multiple births

• Parental leave: shared between both parents with an initial leave period of one year which can be extended twice

• Sick leave: employee remuneration must be maintained during sick leave for a certain length of time depending on the employee’s seniority

For more information on employee benefits and other employment requirements in France (including severance pay and termination procedures), check out our Global Hiring Guide.

Since November 2024, the gross minimum wage in France is set at EUR 11.88 per hour which leads to a monthly minimum remuneration of EUR 1,801.80. Overtime (i.e. any hour worked beyond 35 hours per week) needs to be paid at a rate of 125% of the employee’s normal wages. For every hour exceeding a weekly threshold of 43 hours, overtime pay is 150%. Collective bargaining agreements might mandate higher rates for overtime. Although not legally required, it’s customary to provide a 13th salary which is typically paid out in December.

Payroll in France is processed on a monthly basis, and payments are typically issued to employees at the end of each month. The most common and widely accepted method for paying salaries in France is through bank transfer. However, it is not mandatory to issue salary payments via a French bank account.

Employers are obligated to issue a valid payslip at the end of each pay period. Since 2017, both electronic and paper payslips are legally permitted. Employers must keep record of payroll-related data for at least 5 years.