Net Salary France
The gross to net calculation explained.
The calculation of the net salary in France is very complex. When looking at the French Payslip you will notice that there are about 30 different lines and behind each stands a detailed calculation, impacted by various variables.
Net Salary in France: Gross to Net Calculation
The gross to net calculation is just as complex as the calculation of the employer’s payroll taxes in France.
In France, this calculation is done in several steps:
– Social contributions
= Net salary before tax
– withholding tax
= Net salary after tax
– net deductions
= net salary to be paid
Net Salary before Tax
The net salary before tax corresponds to the gross salary minus the social contributions. In France, the employee’s total rate decreases the higher the salary gets. Generally, it is between 21 and 23 %
To visualize this, we compare the tax rates of different monthly salary levels of a full-time position in the following chart.
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How overtime impacts the employee's social contributions
There is one element that significantly impacts the employee’s deductions: the relief of contributions on extra hours.
Since January 2019, overtime is exempted from some of the employee’s pension contributions and exempt from income tax up to an annual limit (tax-exemption on overtime in France).
The exemption is calculated on the amount corresponding to the extra hours. The legal contributions to the state pension insurance and supplementary retirement insurance are taken into account, up to a limit of 11.31%.
Example: Employee with a 39-hour employment contract and a salary of 3000 € per month
|Hours per month||Rate||Amount|
|Full-Time Salary||151.67||100.00 %||2625.07 €|
|Overtime||17.33||125.00 %||374.93 €|
|Total Gross Salary||3000.00 €|
|Social Contributions without exemption||23.00 %||-690.00 €|
|Overtime Exemption||11.31 % on 374.93 €||+42.29 €|
|Total Deductions including exemption||-647.71 €|
|Net before tax||2352.29 €|
Net Salary after Tax
The next deduction is the Withholding Tax in France that has to be paid via the payroll since January 2019. The rate depends on the employee’s individual cicumstances.
After deduction of the withholding tax you get the net after tax.