Hiring in France Made Simple with an Employer of Record

France is a prime target for business expansion due to its robust economy, strategic location in Europe, and access to a highly skilled workforce. As the world’s seventh-largest economy, it offers a stable market with strong consumer demand. However, when it comes to hiring employees in France as a foreign company, businesses must navigate legal requirements for hiring, including the country’s strict labor protections, 35-hour workweek, and high social security contributions. Keep reading to learn more about hiring in France without a legal entity—and how an Employer of Record could be the solution.  

France Hiring Overview

Understanding French Taxes

Employers in France may encounter a complex tax landscape, as the country is known for its robust social welfare system and strict labor regulations. Below are the key tax obligations based on standard French tax rules as of 2025:

1. Social Security Contributions

Employers must contribute to France’s social security system, funding healthcare, pensions, unemployment benefits, and family allowances. These are managed by URSSAF (Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales).

Employer Cost: Approximately 40-45% of an employee’s gross salary. For example, on a €3,000 monthly salary, employers pay €1,200-€1,350 in contributions.

Employee Cost: Employees contribute ~20-22%, which employers deduct from gross pay and remit to URSSAF.

Businesses must submit monthly declarations via the DSN (Déclaration Sociale Nominative), with late payments or errors potentially resulting in fines of €1,500 per employee or 0.5% of unpaid amounts per month.

2. Income Tax Withholding (PAYE)

Since 2019, employers withhold income tax directly from salaries under the Prélèvement à la Source (PAYE) system, reporting to the tax authority (DGFiP, Direction Générale des Finances Publiques).  

Companies are responsible for deducting tax based on employee-specific rates (0–43%) provided annually by the DGFiP, or applying neutral rates for new hires—ranging from 0% for low earners to 28% for high salaries.

Process:

• Integrate rates into payroll software.
• File monthly DSN reports, combining tax and social security data.
• Issue pay slips showing deductions (mandatory, retained 5 years).  

Incorrect filings cost €250 per error. Failure to withhold can lead to employer liability for unpaid taxes.

3. Vocational Training Tax

Vocational Training Tax (VFT) in France funds employee skill development programs. The funds go to Opérateurs de Compétences (OPCOs), industry-specific training bodies that manage training rights and support workforce development. This is mandatory for all businesses, and failure to pay can result in penalties.

Rate: 0.55% of annual payroll (gross salaries). For a €1 million payroll, that’s €5,500.

Employers must comply by making an annual payment each February for the previous year, declared via DSN, with non-payment resulting in a 2% surcharge.

4. Apprenticeship Tax

Apprenticeship tax is paid by companies to help fund schools, training centers, and apprenticeships. Private-sector employers who have at least one employee and are subject to French corporate tax must comply.  

Rate: 0.68% of payroll for firms with 250+ employees; 0.34% for smaller firms. On €1 million payroll, that’s €6,800 or €3,400.

This tax is declared via DSN and must be paid by March, with errors subject to a 1% monthly penalty.

5. Other Minor Taxes

• Housing Tax Contribution (Effort de Construction) funds social housing for firms with 50+ employees.
  Rate: 0.45% of payroll (~€4,500 on €1 million). Paid annually, and non-compliance adds 2% of unpaid sums. ‍
• Taxe sur les Salaires applies to firms not subject to VAT (e.g., banks, nonprofits), rare for most employers.
  Rate: 4.25-13.6% of payroll, tiered by salary. Paid quarterly or monthly, depending on size.

6. Participation and Profit-Sharing (Optional but Common)

Firms with 50+ employees must share profits (participation) if profits exceed thresholds (e.g., 5% of equity). This is voluntary for smaller firms.

Rate: Varies (~3-5% of net profits), negotiated via collective agreements. Paid annually, often as employee bonuses or deferred savings.

Salary Payment Requirements and Standards

Salary payment requirements and standards in France are tightly regulated to ensure compliance with labor laws, protect employees, and maintain transparency. These rules cover payment frequency, minimum wage, pay slips, overtime, bonuses, and deductions.

1. Payment Frequency

Salaries must be paid at least monthly, typically on or before the last working day of the month. Some sectors like hospitality or agriculture may pay biweekly for hourly workers, but monthly pay remains the norm for permanent (CDI) and fixed-term (CDD) contracts.  

Additionally, Collective Bargaining Agreements (CBAs)—such as Syntec for the tech sector—may stipulate specific pay dates, like payment by the 28th of each month.

Late payments can lead to fines of €3,750 per violation and employee claims for interest (0.5% per month delayed).

2. Minimum Wage (SMIC)

Also known as SMIC (Salaire Minimum Interprofessionnel de Croissance), the minimum wage is adjusted annually (January) based on inflation and cost-of-living indices.

Rate: €12.82 per hour, equating to €1,943.24 per month (gross) for a 35-hour workweek (151.67 hours/month).

Exceptions apply for young or inexperienced workers. Apprentices earn 25–78% of SMIC based on age and year (e.g., €4.81/hour for a 16-year-old in year one). Those under 18 with less than six months of experience can be paid 80–90% of SMIC (€10.26–€11.54/hour).

Paying below SMIC risks fines of €7,500 per employee and back-pay orders, enforceable via labor inspectors (Dreets).

3. Pay slips

Employers must provide a detailed pay slip with every payment, either paper or electronic (if employee consents).

Mandatory details:

• Employee and employer details (name, SIRET number).
• Gross salary, hours worked, and hourly rate.
• Deductions: Social security (~20-22% of gross), income tax (PAYE, 0-43% based on brackets).
• Net salary paid.
• Overtime, bonuses, and benefits (e.g., meal vouchers).
• Leave balance (accrued vacation days).
• CBA reference (e.g., “Syntec” for tech workers).

Missing or incorrect pay slips can lead to €450 fines per instance and employee disputes in prud’hommes (labor court), often costing €2,000-€10,000 in settlements.

4. Overtime Pay

Hours worked beyond the standard 35-hour workweek must be paid at premium rates, unless a CBA or contract allows time-off in lieu.  

Rates: First 8 overtime hours (36-43 hours/week): 125% of regular rate (e.g., €16.03/hour for SMIC); Beyond 43 hours: 150% (€19.23/hour for SMIC).

Details:  

• Annual cap: 220 overtime hours, unless a CBA permits more
• Daily limit: 10 hours max (exceptions for emergencies)
• Some CBAs (e.g., metallurgy) set higher rates (200% for Sundays)
• Managers on forfait jours (annualized hours) are exempt but may get bonuses for extra days

Underpaying overtime incurs fines of €1,500 per employee and back-pay claims. Non-compliance risks labor audits.

5. Bonuses and Additional Payments

Bonuses are not legally mandated unless specified in a CBA, contract, or company policy, but some are common. It is subject to social security contributions (40-45% employer, 20-22% employee) and income tax. Profit-sharing (participation) is mandatory for firms with 50+ employees if profits exceed thresholds (~3-5% of net income), paid annually.

Types:  

• 13th-Month Pay: Common in sectors like banking, tech, and retail (e.g., Syntec CBA mandates it for engineers). Paid as a year-end bonus or split monthly. ‍
• Performance Bonuses: Tied to targets, discretionary unless contracted (e.g., sales roles). ‍
• Seniority Bonuses: Required by some CBAs (e.g., 3% salary increase after 5 years in chemicals). ‍
• Holiday Pay: Not extra, but accrued leave (25 days/year) must be paid if taken or unused at termination.

Failing to pay CBA-mandated bonuses risks €7,500 fines and employee lawsuits, often settled at €5,000+.

6. Deductions

Employers must withhold mandatory deductions and report them via DSN (Déclaration Sociale Nominative) monthly. Deductions vary by role (executives pay more for pensions, ~8% AGIRC-ARRCO).

Types:  

• Social Security: ~20-22% of gross salary (health, pensions, unemployment). Employer adds 40-45%. ‍
• Income Tax (PAYE): Since 2019, withheld based on DGFiP rates (0-43%), updated annually or on employee request. ‍
• Other: Union dues (optional, ~0.5%) or court-ordered garnishments (e.g., alimony).

Errors in DSN filings cost €250 per instance; non-reported deductions trigger €1,500/employee fines and URSSAF audits.

7. Special Cases

• Part-Time Workers: Paid pro-rata (e.g., 20 hours/week at SMIC = €1,108.99/month). Overtime kicks in below 35 hours if exceeding contract (e.g., 25% extra for 21st hour).
• ‍Temporary/Seasonal: Same SMIC and payslip rules, plus 10% end-of-contract indemnity (prime de précarité) for CDD workers. ‍
• Interns: Not employees, but paid €4.35/hour minimum (2025), exempt from social contributions if under €600/month. ‍
• Expatriates: Subject to same rules unless tax treaties apply (e.g., U.S.-France treaty avoids double social security).

Salaries are typically paid via bank transfer to a French or SEPA account, ensuring traceability. Non-traceable payments (e.g., cash over limit) risk €3,000 fines and tax fraud probes.

Onboarding and Offboarding

Onboarding Employees  

Onboarding in France involves setting up contracts, registering employees with authorities, and meeting mandatory requirements, all while aligning with the country’s regulated labor market.

1. Employment Contract
   A written contract (CDI for permanent or CDD for fixed term) must outline job role, salary, hours, and CBA (e.g., Syntec for tech). Non-compliance risks €3,750 fines (Labor Code, Article L1242-12).
2. Pre-Hiring Declaration (DPAE)
   Employers must submit a DPAE to URSSAF within 8 days before hiring, registering the employee for social security. Failure incurs €1,080 fines per employee (Labor Code, Article R1221-4).
3. Probation Period
   Probation lasts 2-4 months (2 for workers, 3 for supervisors, 4 for managers), renewable once agreed. Incorrect terms risk contract reclassification as CDI, costing €7,500 (Labor Code, Article L1221-23).
4. Employee Registration
   Register employees with social security (URSSAF) and provide a medical check within 3 months (mandatory for most roles). Non-compliance fines: €1,500/employee (Labor Code, Article R4624-10).

Offboarding Employees

1. Termination Process (CDI)
   CDI termination requires justified cause (e.g., misconduct, redundancy), with written notice and consultation. Unlawful dismissal risks €10,000+ in labor court damages (Labor Code, Article L1235-3).
2. Notice Period (CDI)
   Notice is 1-2 months, based on seniority and role; none for probation or gross misconduct. Non-compliance costs €3,750 plus back pay (Labor Code, Article L1234-5).
3. Severance Pay (CDI)
   Employees with 8+ months tenure get ~1/4 monthly salary per year served, except for gross misconduct. Errors trigger €1,500 fines and court claims (Labor Code, Article L1234-9).
4. Final Documentation
   Provide a final payslip, work certificate, and Pôle Emploi attestation; settle unused leave. Missing documents risks €450 fines per instance (Labor Code, Article R1234-9).
   

Employee Benefits in France

Employee benefits are shaped by legal mandates and cultural expectations to attract talent. These benefits include mandatory social security contributions, health insurance top-ups, and other perks often required by collective bargaining agreements (CBAs) or offered to stay competitive. Beyond salary, benefits add 10-15% to payroll (e.g., €500-€1,000/year per employee for mutuelle, vouchers). Social contributions inflate total costs by 40-45%.  

1. Social Security Contributions

Mandatory contributions cover health, pensions, unemployment, and family benefits, funded by employers (~40-45% of gross salary) and employees (~20-22%). Rates vary by role (executives add ~8% for AGIRC-ARRCO pensions). Small firms (<20 employees) may get 4-6% reductions (Réduction Fillon). Non-compliance risks €1,500 fines per employee.

2. Health Insurance Top-Up (Mutuelle)

Employers must provide a private health plan supplementing social security for dental, optical, and specialist care. This covers 50% of costs (~€30-€100/month per employee). Employees can opt out only with proof of other coverage. Failure to offer incurs €1,500 fines per employee.

3. Unemployment Insurance

Employers pay ~4% of gross salary to Pôle Emploi, ensuring benefits for laid-off workers (60-75% of prior salary for up to 2 years). Higher earners get capped benefits while voluntary resignations qualify in specific cases. Errors in contributions cost €1,080 per employee.

4. Occupational Accident Insurance

Employers pay for workplace injury coverage, with rates based on industry risk (~0.5% for offices, 3-5% for construction, ~€50-€1,500/year per employee). This covers medical costs, lost wages, and disability pension. Non-compliance fines: €3,000 per incident.

5. Paid Leave

Employees receive 25 days/year of paid vacation (2.5 days/month worked), plus ~11 public holidays, separate from sick or parental leave. Leave is pro-rated for part-time work, with a maximum of 24 consecutive days requiring employer approval. Additional flexibility comes from sick leave and parental leave (16 weeks maternity, 25 days paternity, both fully paid via social security). Mismanagement risks €450 fines per payslip error.

6. Meal Vouchers (Titres-Restaurant)

Common benefit (~€8-€12/day, 60% employer-funded), tax-exempt up to €7.63/day (2025), required by some CBAs (e.g., retail). Non-compliance with CBA terms risks a €1,500 fine.

7. Profit-Sharing and Bonuses

Firms with 50+ employees must share profits if profitable (~3-5% of net income); voluntary bonuses (e.g., 13th-month pay) common in tech, banking. Failure to distribute mandatory participation costs €7,500.

8. Transport Subsidies

Employers cover 50% of public transport costs (e.g., €30-€50/month for Paris passes), mandatory for all employees using transit. Non-payment incurs €1,500 fines per employee.

Work Visas for Non-EU Talent

Work visas in France allow non-EU/EEA citizens to legally work. Popular options include the Talent Passport for high earners and innovators, Temporary Worker for short-term roles, and French Tech Visa for startup stars. These require job offers, qualifications, or salary minimums, with processing taking 4-8 weeks. Employers play a key role, securing permits and covering contributions, and can face fines up to €7,500 for mistakes. Click here to read more about visa types, steps, and costs.  

How an Employer of Record Can Help

An Employer of Record (EOR) can help you hire in France without setting up a business by acting as the legal employer for your workers, managing complex compliance, payroll, and benefits—without requiring you to establish a local entity. Below are the key benefits of using an Employer of Record in France to simplify international hiring:

Ensures Compliance with French Labor Laws

To ensure compliance with France’s strict labor laws, managing key requirements such as the 35-hour workweek, overtime pay at 125–150% rates, and mandatory employee benefits in France like 25 days of paid leave and mutuelle health insurance plans are crucial. How an EOR helps you hire in France legally is by handling all compliance-related tasks while significantly reducing the risk of legal issues, including costly fines (up to €7,500 for wage violations) or audits from authorities like URSSAF or Dreets. Employers can avoid spending time digging into the complex details of French employment law and instead stay focused on growing their business.

Eliminates Need for a Legal Entity

An EOR acts as the legal employer, handling employment contracts, taxes, and social contributions (which typically range from 40–45% of salary), allowing companies to bypass the expensive and time-consuming process of setting up a French legal entity. EOR vs setting up a French entity for hiring is often a matter of cost and speed—this route can save businesses months of administrative work and between €10,000 to €50,000 in setup costs. How long does it take to hire through an EOR in France? Just 1–2 days.

Streamlines Payroll and Taxes

EOR services in France for international hiring eliminate the need for in-house payroll expertise by managing monthly payroll processing, including PAYE income tax (ranging from 0–43%) and social security filings through France’s DSN declaration system. The EOR ensures accurate pay slips and keeps employers compliant with strict filing deadlines—helping them avoid penalties that can range from €450 to €1,500.

Manages Benefits Administration

Managing benefits in France can be complex, but with an EOR, mandatory employee benefits in France like mutuelle health insurance (€30–€100/month) and transport subsidies (€30–€50/month), as well as optional perks like meal vouchers (€8–€12/day), are handled in full compliance with Collective Bargaining Agreements (CBAs) such as Syntec. The EOR centralizes enrollment and payments, allowing employers to provide competitive benefits without getting bogged down in the intricacies of CBA regulations.

Supports Non-EU Talent Hiring

Hiring non-EU talent in France becomes much simpler with an EOR, which facilitates work visa processes such as the Talent Passport—requiring a minimum salary of €43,243.20 per year—by managing permits and ensuring compliance with immigration regulations. This support can significantly speed up visa processing times (typically 4–8 weeks) and helps employers avoid costly fines of up to €5,000 for permit-related errors  

Simplifies Onboarding and Contracts

Simplifying onboarding, the EOR drafts compliant CDI/CDD contracts in French, handles DPAE filings, and arranges medical checks, ensuring a seamless start for new hires. This process reduces onboarding time to just 1–3 days, compared to weeks, and frees employers from navigating the legal complexities—such as €3,750 fines for contract errors—often associated with employment paperwork. What’s the probation period for new hires in France? Typically, it ranges from one to three months for most roles, and an EOR can manage this as part of onboarding.

Reduces Termination Risks

The EOR manages offboarding, including handling notice periods (typically 1–3 months) and severance pay (around one-quarter of monthly salary per year served), all while ensuring compliance with France’s strict dismissal regulations. This approach minimizes the risk of costly labor court disputes, where 70% of cases favour employees and awards can range from €5,000 to €20,000. This is why companies use EORs to hire in France—to manage risk, simplify exits, and stay compliant.  

Hiring in France can feel daunting, but with the right partner, you can manage compliance, payroll, and onboarding safely and efficiently, allowing you to expand with confidence. Contact Knit today.