How to hire and pay remote workers in France

Tapping into global markets and finding diverse talent can give your business the competitive edge it needs to succeed. If you’re looking for top talent in Europe, hiring from France is a solid option. France has a thriving economy and a talented workforce, which means that you can definitely find capable candidates who can add value to your team.

But hiring and paying remote workers in France can be a complex and burdensome process. French labor laws are extensive, and it can be difficult for overseas businesses to understand and act on them. As a result, there is a high risk of non-compliance while hiring French workers.

If you’re looking to expand your talent pool in France but don’t know where to begin, this guide is for you. This article will cover key information about hiring and paying remote workers in France so that you can hire in France with confidence.

How do foreign businesses pay remote workers in France?

When your business wants to hire remote workers based in France, you have three options for paying them.

Open a legal entity in France

Opening a legal entity in another country gives your company a physical presence with a local address, phone number, and bank account. You are essentially starting a business in France to hire and pay your remote workers. To maintain your legal entity in France and comply with local regulations, you'd need to find a reliable team of local accountants, legal counsel, and other professionals.

Work with a global employment partner

Global employment companies come in many forms, including staffing agencies, payroll companies, professional employer organizations, or employers of record (EORs). An EOR handles hiring, compliance, payroll, taxes, and benefits for your foreign workers, making it the ideal choice if you want to hire and pay remote employees in France easily.

Pay workers in France as contractors

The final option for paying your remote workers in France is hiring and paying them as independent contractors. In this scenario, the contractor is responsible for paying their income tax and security contributions themselves. Working with independent contractors may seem like the easiest choice for hiring workers in France, but you risk misclassifying your workers and running afoul of French labor law, which can lead to serious penalties.

In what currency do companies pay remote workers in France?

The local currency in France is the Euro (€, EUR). When you work with an EOR, the company will handle currency conversions and ensure your workers in France receive monthly payments on or before the last working day of each calendar month.

What are the tax rates for tax brackets in France?

Residents of France, whether French citizens or not, must pay French taxes. Like most countries, France has an income tax, social security tax, and sales tax (value-added tax or VAT). The tax brackets for personal income tax differ depending on how much workers earn in France.

In 2023, the income tax rates in France are:

Up to €10,777 = 0%

€10,777 to €27,478 = 11%

€27,479 to €78,570 = 30%

€78,571 to €168,994 = 41%

€ Over 168,994 = 45%

Remote workers in France can also work as independent contractors. A self-employed individual is subject to a different tax rate unless they are considered a “microentrepreneur.” The microentrepreneur status simplifies an individual’s tax status and accounting requirements and allows them to file their taxes under the standard rates listed above.

If a resident of France is a U.S. citizen, they are also responsible for filing and possibly paying U.S. taxes. Ascertaining tax liability as a remote worker can be difficult, especially when dealing with the tax systems of more than one country. Working through a global employment partner can help to simplify the process of paying the relevant taxes.

Which parts of salary in France are taxable?

In France, personal income up to €10,777 is not taxable. France also has a social security system that provides basic coverage, unemployment benefits, compulsory retirement plans, death or disability coverage, and complementary health insurance based on contributions from workers and employers. 

For the employer, these contributions are about 45% of the gross salary. For the employee, it’s between 20% and 30% of the remuneration. These numbers may change from year to year and as salary increases or decreases. Additionally, employers must make contributions to medical coverage schemes, which are taxable.

Workers pay personal income tax on the amount they earn after employer withholdings. A French salary and benefits are subject to tax after these social security contributions — except the general social contribution and the contribution to social debt — and after a 10% deduction for professional expenses.

It’s important to note that if you are paying a non-French citizen who resides in France but has elected to pay into the social security system of their home country, it may change your requirements.

Components of France salary that incur taxes

In France, taxable income includes salaries, wages and gross proceeds, and benefits. An employee’s salary has several components that make up an entire benefits package. Employee benefits in France are different from other EU countries, so it’s important to know what you can offer to potential employees. France has both statutory and optional benefits.

Statutory benefits for French workers:

• Sick pay and vacation time

• Overtime and RTT (Reduction du temps de travail)

• Parental leave

• Health benefits

• Pension plans and retirement contributions

Additional benefits for French workers

• Meal vouchers

• 13th-month bonus pay

• Professional equipment (laptop, phone, etc.)

Which of these benefits are taxable in France?

• Employees may not earn a lower gross salary while on vacation than what is stated in their employment contract, so regular income taxes apply.

• Overtime pay in France is subject to a 125% payout and exempted from taxation and social security contributions.

• Workers on parental leave receive a leave allowance from the government, which is subject to 21% of earnings for taxes and social contributions.

• Both employers and employees contribute to the cost of a health insurance plan.

• French pensions earned from employment are taxable the same way as a salary. However, state pensions, occupational pensions, and private pensions have a 10% tax deduction.

• Meal vouchers are taxable in France.

• 13th-month bonuses are part of an employee's total gross salary and are therefore taxed the same way as a regular salary.

• As of 2021, allowances received by the employee to cover expenses related to home-working are exempt from income tax, due to the COVID-19 situation.

What payroll deductions are employers required to make in France?

French payroll taxes are complex. Employers must report employee wages for income tax, withhold social contributions from employee salaries, and pay additional social contributions.

The social contributions that an employer withholds from an employee’s salary in France include:

• Old-age insurance. 6.9% for employees and 8.55% for employers

• Health insurance. 0% for employees and 7% or 13% for employers

• Supplementary pension (bracket 1). 3.15% for employees and 4.72% for employers

• Supplementary pension (bracket 2). 8.64% for employees and 12.95% for employers

• National Housing Association Fund. 0% for employees and 0.1% for employers with fewer than 50 employees; 0.5% for employers with more than 50 employees

• Unemployment insurance. 0% for employees (except three specific categories of employees) and 4.05% for employers through 2021

• Work accident insurance. 0% for employees and varied rates for employers based on workplace risk of injury and company size

• Family allowances. 0% for employees and 3.45% or 5.25% for employers based on employee income

• CSG (Social security surcharge). 9.2% for employees

• CRDS (Social security debt reimbursement contribution).0.5% for employees

Is per diem taxable in France?

Per diem is a type of payment you give to your employees to cover expenses for lodging, meals, and other incidentals while they travel for work. You offer a per diem allowance rather than paying for each travel expense individually.

Per diem rates are more commonly offered by government and state institutions to employees that must relocate to a new country or travel for their official duties. For private companies in France, expenses related to traveling are considered professional expenses. Every employee in France may deduct professional expenses from their taxable income, but no more than 10% of their taxable income.

Is there a difference between allowance and reimbursement in France?

In France, allowance and reimbursement schemes apply primarily to mobility, i.e., claiming mileage. In France, the difference between an allowance and a reimbursement depends on the vehicle the employee uses.

If the employer provides a company car, the employer gives them an allowance. If the employee uses a personal vehicle for business activity, the employer pays them a reimbursement. Mileage reimbursement is not taxable and exempt from social contributions, within certain limits.

France has a standardized reimbursement system overseen by the federal tax administration. It sets the maximum reimbursement amount for employees based on the car’s horsepower (HP) and the number of miles driven for business purposes. Employers can choose to reimburse their employees with a smaller amount. Moreover, employees must own the vehicle they’re using to receive reimbursement for it.

You can view the table provided by the French Service-Public to calculate the reimbursement rates for 2023.

What is the minimum wage in France?

As of 2023, the minimum wage in France is €1,709 per month or €11.52 per hour.

How much is overtime pay in France?

Overtime pay is 125% of the normal rate of pay for the first eight hours of overtime. Any overtime worked beyond eight hours is 150%.

What are the local labor laws in France?

French labor law encompasses several regulations related to work, including the duration of the workweek, public holidays, types of employment contracts, and more.

• Working week: The full-time working week is set at 35 hours. Work beyond this time is considered overtime. Workers have a 20-minute break every six hours.

• Holidays: France has 11 federal public holidays each year.

• Night work: Night work occurs between 9 pm and 6 am and must not exceed eight hours per day.

• Paid and unpaid leave: Full-time employees are entitled to five weeks of paid leave annually, or 2.5 days leave every calendar month worked, up to 30 days of leave maximum. Workers cannot take more than 24 days of leave consecutively.

• Contracts: French work contracts are either temporary or indefinite. A temporary or fixed term contract is a contrat de travail a durée déterminée or CDD. Permanent contracts are contrat de travail a durée indéterminée or CDI.

• Unpaid leave: French labor law allows for unpaid leave for caring for a disabled, seriously injured, or terminally ill child or relative; adopting a child from abroad; doing humanitarian work abroad; setting up a business; or taking a sabbatical.

• Employment termination: France has a statutory notice period for termination. For employment lasting between six months and two years, the notice period is one month. For employment duration over two years, the notice period is two months. The notice period is three months for executives,

How to pay contractors in France

When you hire independent contractors in France, paying them is relatively straightforward. You don’t have to worry about withholding payroll taxes or social security contributions.

It can seem like an easy solution for hiring remote workers in France, however, there are certain risks in this working arrangement. Specifically, you might misclassify a contractor. Knowing the difference between a contractor and an employee comes down to the working relationship between the two parties, and often, lines get blurred.

In France, the concept of an “employee” isn’t codified in French law. Rather, the distinction between employees and contractors comes from case law and Supreme Court decisions. It is, therefore, even murkier when it comes to classifying your contractor in France.

To avoid the penalties that come with misclassification, you may consider converting your contractor to an employee. An EOR like Remote can handle this process for you easily. When you work with an EOR that knows how to navigate the French labor laws, tax regulations, and social security system, you don't have to worry about being in non-compliance with French rules.  

How to pay remote employees in France

One concept that companies with overseas employees may have to worry about is the risk of permanent establishment. This term means that you have an ongoing presence in France, regardless of whether you’ve set up a legal entity. Becoming permanently established has inherent risks and may subject your business to France’s corporate tax and compliance standards. Your relationships with your workers based in that country, your means of generating revenue, and whether you make strategic decisions there, could all trigger permanent establishment.

To avoid permanent establishment, companies should work with an EOR. It’s the simplest, most scalable solution to help you hire and pay remote employees around the globe. An EOR allows you to employ legal, full-time workers in France, removing the burden of local legal requirements.

EORs differ from recruitment and staffing agencies because they can actually hire employees on your behalf. They can generate employment contracts, take care of payroll, taxes, benefits, compliance, and much more. Working with an EOR allows you to find the best people for your company, even if they’re based in France and you’re not.

You don’t have to wait for months to set up a legal entity in another country. You can easily use an EOR to scale your business and find global talent.

Pay remote workers in France with Remote

Hiring and paying remote talent abroad doesn’t have to be a challenge, especially if you have a reliable global employment partner like Remote on board.

Once you've decided to hire remote workers in France, Remote can help you every step of the way. We can handle tax compliance, offer benefits, set up payroll processes, and get your workers onboarded with a few clicks. Remote saves you time and money, leaving you free to focus on growing your business abroad.

Get in touch if you would like to learn more about how you can hire workers in France quickly and easily. If you’re ready to start hiring in France, sign up with Remote and get started in minutes!