Payroll Outsourcing France
A guide to payroll outsourcing in France.
Across all the various HR functions, payroll is the most often outsourced. This is especially true for companies hiring employees in France and even more so if the employer is a foreign company.
How can outsourcing your French payroll help your company?
France has one of the most complex payroll systems in Europe. Navigating the numerous and rapidly evolving laws affecting French payroll requires substantial local expertise.
Outsourcing French payroll to benefit from local expertise
Whether hiring through a French legal entity or as a foreign employer, you will have to apply local mandatory provisions, including Collective Bargaining Agreements (CBAs) which are binding in many industries.
Employment contracts & Collective Bargaining Agreements
The first crucial step that should not be skipped is determining the applicable CBA. The CBA significantly impacts many aspects of the employment relationship and needs to be considered when drafting the employment contract, which is why we recommend having the employment contract drafted by local experts.
A French version of the employment contract is mandatory. In some cases, it is advisable to prepare a bilingual French-English contract, with the French version applicable in case of conflict.
Here are some key points to be considered:
Even though the 35-hour French work week is the legally allotted working time, it is far from being the norm. In many industries, employees work 39 hours or more every week. For some staff, it is even possible to agree on a specific number of annual working days.
With fixed-term contracts being the exception, the trial period is critical. However, its duration in France is significantly shorter than in other countries. For so-called ‘cadre’ staff, i.e., executives and highly qualified staff with a certain degree of autonomy, the trial period is commonly four months. Yet, CBAs of some industries reduce it to three months.
On the other hand, many CBAs also provide the option of renewal. For instance, in the IT industry, cadre staff can conclude a four-month trial period which can be renewed for another four months under certain conditions.
Gross salaries & bonuses in France
Minimum salaries in France are established according to the French minimum wage (SMIC) and collectively agreed minimum wage scales for different industries. Yet, in many industries, salaries well above the minimum have to be proposed for an employment package to be competitive.
Annual bonuses are sometimes part of an employee’s compensation, in most cases by negotiation and, in some cases, required by law. For instance, a vacation bonus is mandatory in the IT industry.
As can be seen through these examples, CBAs significantly impact the employee-employer relationship. To ensure these nuances are considered, we recommend having the employment contract drafted by local experts.
Expert advice on employer contributions
Your French payroll outsourcing company will advise you on employer contributions and payroll taxes in France.
French employer contributions vary between 3% and 46 %. They depend on several variables, the most important of which is the salary level. To put it simply, you should expect the following for a full-time position (35-hour week):
Annual gross salary ≈ 20 – 32K: 3% – 37%
Annual gross salary ≈ 32 – 49K: 35% – 38%
Annual gross salary > 49K: 41% – 46%
My Payroll Pro France provides cost estimations for your unique case as part of our payroll services in France.
Request your free cost estimation
Outsourcing employee benefits management
Your French payroll outsourcing company will ensure that your employees receive the benefits they are entitled to, thus avoiding employee dissatisfaction and even legal disputes.
Besides advising on mandatory employee benefits, My Payroll Pro France provides guidance on common practices to ensure the competitiveness of your employment offers. Employees around the world have different cultures and expectations regarding employment compensation. For instance, it is common to offer optional benefits like meal vouchers in France. Such practices can also help optimize employer contributions as employer participation is fully exempt from social contributions.
Payroll solutions for foreign companies without legal entity in France
French payroll already poses quite a challenge for local French businesses; it becomes even more daunting for foreign companies.
Understanding your options is imperative to identifying the ideal solution for your unique case. You might often read that an Employer-of-Record solution is the only option for hiring without a legal entity. However, in France, you can actually hire an employee directly through your foreign company without setting up a legal entity. To do so, a French payroll outsourcing company like My Payroll Pro France will register you as a foreign employer in France. We will manage all payroll-related tasks and ensure all important deadlines for tax filings and social declarations are met.
Outsourcing French payroll to maintain compliance
Payroll compliance is an important consideration, especially when dealing with payroll in a foreign country. Companies employing staff in France need to comply with French legislation and are obliged to pay contributions in France, even if they have no local office and operate from their home country. Getting an external French payroll outsourcing company to handle payroll for your employees in France will ensure you are protecting your business by staying up-to-date on changes.
My Payroll Pro France is a French payroll provider that specializes in providing services to small- and medium-sized companies with employees in France. Contact us to discuss how we can help you with payroll outsourcing solutions in France.