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Social Security Changes for Employees in France

HR departments with staff on assignment in foreign countries are challenged to keep track of legislative changes that affect employment, payroll and withholding.  Without local experts to advise and guide you, it is possible to miss important changes to employment laws, and even miscalculate required contributions.

A good example of this is where clients of ours with employees in France were recently affected by a number of changes to social security contributions and ceilings.  Since all of our clients’ staff are employed by our French employer of record, they are required to make statutory contributions through payroll under French law.

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Summary of Key Changes

Here is how we explained the key changes to our clients and how their employees would be affected:

Social Security Contribution Ceiling in France 

The first change is that the annual social security contribution ceiling is raised in 2018, form 39,228 Euros to 39,732 Euros, which allows for slightly greater overall employee contributions.  There were also some changes to the items that would be applied toward the ceiling limit such as deferred salary payments, as well as new rules on prorated payments for terminated employees.

Contribution Calculations and Changes in France

More importantly, are the changes in how statutory contributions are calculated each month.  The CSG social contribution rate increased from 7.5% to 9.2%, but a greater portion is deductible from the employee’s income tax, somewhat offsetting the decrease in net pay.

On the plus side, contributions to unemployment insurance will be phased out in 2018, and the employee contribution to health insurance was abolished as of January 1, 2018, giving France-based employees a total of 3.15% contribution relief from those payments.  Evidently, this was the intention of the French government, to give employees in France more purchasing power from their pay.

Obviously, this affects any French employees, including expats that are employed locally through a legal entity, which includes our clients with staff in France.

How Shield GEO Helps Clients with Legislative Changes

In this case, the changes meant that there would be new calculation of contributions from the French payroll of our clients’ employees.  Shield GEO’s in-country experts were in touch with the French authorities and were able to advise our clients on how to handle the changes, and the way that each individual employee would be affected.

Because the contribution rates changed in several areas, this would affect the calculation of payroll starting in January, and our French employer of record would input the new, correct calculations for our client’s employees.  This is one example of how Shield GEO can assure our clients that they are in full compliance with local laws and regulations for their staff on assignment.

The Shield GEO employment solution is comprehensive, handling all aspects of immigration, employment and payroll for rapid and legal deployment of your staff abroad.  We make international employment simple and cost-efficient, allowing your HR department to focus on staff management and performance.

Need help employing in France? Get in touch!

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