The new 2018 legal social contributions rates.

As of January 2018 social contributions rates changed.

The employee CSG contribution increased from 7.5% to 9.2%.

The Issurance for sickness, maternity, invalidity, death 0.75% employee contribution has been canceled.

And the Unemployment employee contribution has been reduced from 4% to 0.95%

Here are the new rates:

Benefit Global rate %Employer %Employee %Base
I. URSSAF (social security)
Assurance for sickness, maternity, invalidity, death) (1)13.0013.00Total gross salary
Solidarity for autonomy0.30.3
Family allocation (2)5.255.25
Retirement2.31.900.40
Housing help (at least 20 employees)0.50.5
Union funding0.0160.016
Work related accidentVariable rate based on the company’s activity
CSG9.29.298,25% of the total gross salary (3)
CRDS0.50.5
Retirement   15.458.56.9Salary limited to 1 social security ceiling
Housing help (less than 20 employees)0.10.1
Unemployment (4) (5)54.050.95Salary limited to 4 social security ceiling
AGS0.150.15
II. Complementary retirement (ARRCO & AGIRC)
Executives offciersArrco TA7.754.653.1Salary limited to 1 social security ceiling
Minimum mandatory life insurance1.51.5
AGFF TA21.20.8
Agirc TB20.5512.757.8Salary between 1 and 4 social security ceiling
AGFF TB2.21.30.9
Apec0.060.0360.024Salary limited to 4 social security ceiling
AGFF TC2.21.30.9
Agirc TC20.5512.757.8Salary between 4 and 8 social security ceiling
CET0.350.220.13Salary up to 8 social security ceiling
Non-executives officersArrco T17.754.653.1Salary limited to 1social security ceiling
AGFF T121.20.8
Arrco T220.2512.158.1Salary between 1 and 3 social security ceiling
AGFF T22.21.30.9
III. Taxes & others
Taxe on salary (6)4.254.25Total gross salary
Construction (at least 20 employees)0.450.45
Apprentice0.680.68
Professional training (at least 10 employees)11
Professional training (less than 10 employees)0.550.55

Do not throw away your used equipment give it to your employees!

compter equipment

Your company is renewing its IT equipment? Don’t throw await the used equipment give it to your employees.

Why give a used equipment to an employee?

Providing benefits to employees is a good wait to avoid turn over.

However, in France most of the benefits are taxable. The most obvious example is the health insurance. The amount paid by the employer on this benefit is subject to income tax for the employee.

But what about used equipment given to the employee?

When the employer give a used IT hardware to its employees, this benefit is not subject to social and fiscal contributions neither for the employee nor for the employer.

However, this exemption is limited.

What are the condition for this benefit to be exempted?

For the donation of an equipment to be exempted from any contributions there are 3 conditions:

  1. The equipment must be fully depreciated.
  2. The equipment must allow the connection to electronic communication. (a smartphone would do a printed wouldn’t)
  3. The gift(s) must not exceed 2000€ per year per employee.

Of course, needless to say, the gift must be free, which excludes any employee participation.

In short

An employee can giver used equipment to its employee. This gift is free of taxes if, it does not exceed 2000€ per year per employee, it allows connection to the internet and if it is fully depreciated.


Source
SVP : http://www.svp.com/article/dons-de-materiel-aux-salaries-incidences-en-matiere-de-paye-100004516

French Payroll Expert

The lunch voucher in the French payroll

Lunch Voucher

As you know the social contribution on a French payroll are non-negligible.

Most of the benefits provided to the employees are taxable.

However, some are not.

The lunch vouchers are one of those benefits.

What is a lunch voucher?

A lunch voucher is a ticket with which the employee can pay for his food in most restaurants and food stores.

Then what is the difference with direct cash?

The difference is that the employer pays part of the face value of the voucher.

What are the condition for the exemption of social contributions?

As the employer pays part of the value of the voucher, this is a benefit provided to the employees.

This benefit it exempted from social contribution if the employer complies with 3 conditions:

  • The employer part must not exceed the indexed limit on the income tax scale. In 2017 that limit is of 5.38€
  • The employer part must be between 50% and 60% of the voucher value

How many lunch voucher can I give to my employees?

An employer can only give one voucher per employee per lunch break within the daily working schedule.

This means that you can only give one lunch voucher per day.

This also indirectly means that if the lunch of a specific lunch break is already paid, you cannot provide a lunch voucher.

For example:

You provide 22 lunch voucher to an employee for his 22 days of work during the month.

At the end of the month, the employee provides you with and expense for inviting a client to lunch.

In this case, the lunch is paid twice, by the expense and by the voucher. In case of an URSSAF audit, the URSSAF will consider the expense as the normal lunch payment and the lunch voucher as a benefit fully subject to contributions.

Best practice

The best way to make sure you provide your employees with the correct number of lunch voucher is to provide them with one month delay.

For example, the number of lunch voucher given to an employee in the beginning of April will be the number of days worked in March.

You also must make sure that the employee signed a receipt each time he receives his vouchers from the company. To make things simpler dematerialised vouchers now exists. It the best way to insure the receipt of the voucher as well as their safe keeping.

 

 


Source

URSSAF : https://www.urssaf.fr/portail/home/employeur/calculer-les-cotisations/les-elements-a-prendre-en-compte/les-frais-professionnels/les-titres-restaurant.html


French Payroll Expert

What payroll changes in 2017

As always, with the news come a few changes. Here are the ones related to the payroll.

Minimum wage increase

Avery year the minimum hourly wage (SMIC in French) is updated. With the presidential election in 2017 we expected the government to increase the SMIC at a higher rate than the inflation. We were happily disappointed.

The minimum hourly wage will increase of 0.93% on the 1st of January 2017 putting it at 9,76€ (it was 9,67€ in 2016).

For a full-time employee (35 hours per week) the monthly gross salary will then be of 1480€. The net will be of 1153€.

Visit our database for more information about the SMIC: http://www.frenchpayrollexpert.fr/database/minimum-wage-smic/

Social security ceiling increase

In the same way than the minimum wage salary the social security ceiling increases every year. In 2017 it will be of:

  • 39 228€ for a year (38 616€ in 2016)
  • 3 269€ for a month (3 218€ in 2016)
  • 180€ per day (177€ in 2016)
  • 24€ per hour (identical in 2016)

Some contribution rate increases when the employee’s salary exceeds the social security ceiling. Other contributions are limited to the social security ceiling. All in all, this increase is of a limited impact for most people.

Visit our database for more information about the social security ceiling: http://www.frenchpayrollexpert.fr/database/social-security-ceiling/

Retirement contribution increase

The retirement contribution paid to the URSSAF (social security) on the whole salary (not limited to the social security ceiling) will increase on the 1st of January. It will be of:

  • 0,40% for the employee contribution (0,35% in 2016)
  • 1,90% for the employer contribution (1,85% in 2016)

Transport contribution increase

Part of the public transportation program is financed by the payment of the transport contribution. This contribution is paid by companies employing at least 11 people. This contribution is paid on the whole salary. It’s rate will depend on the region were you company’s establishment is located.

In Paris the contributions rate will increase from 2,85% to 2,95% on the 1st of January.

You can find you contribution rate on this web site: https://www.urssaf.fr/portail/home/taux-et-baremes/versement-transport.html

Unemployment contribution decrease

The AGS is one of the unemployment contribution paid by the employer. In 2016 its rate was of 0,25% of the salary limited to 4 time de social security ceiling.

In 2017 this rate will decrease to 0,20%.

DSN

The DSN (“Déclaration Sociale Nominative” in French) is a global change in the declaration format.

This means that as of the 1st of January 2017, every payroll provider (in house, service provider or accountant) must provide the authorities with one (and only one) declaration.

This declaration will contain all the information about the month payroll.

The information will then be dispatch to all the social bodies to which the company is registered.

This system will replace all the monthly, quarterly and yearly declarations.

For the company, it will not change a thing. The rate will be the same and the payment schedule will be the same.

However, once a DSN is sent (and accepted) the company cannot modify it. This means that you cannot go back on a payroll.

We advise that you make sure you send a formal OK to your provider before he sent the DSN.

Also, every sick leave will be declared with the DSN. However, it must be done within 5 days after the employer has been informed of the leave. The sick leave information can no longer be provided to your service provider with the monthly payroll data.

The DSN is a big step to simplify the payroll process. However, we will all need to adapt and change our process and time line. We recommend you contact your payroll provider to setup this new process.

 

Somme other change for the year 2017 are note related to the payroll. Here are a few of them:

Stamp price increase

The price the stamp will increase in 2017. For a normal letter, it will go from 0,80€ to 0,85€.

Cigarette neutral packaging

The neutral packaging for cigarettes will now be mandatory.

Traffic offense

When a traffic offense is committed by a company car, the employer will now have to obligation to inform the authorities of who was driving the car when the offense took place.


Sources:

Public services: https://www.service-public.fr/particuliers/actualites/A11229?xtor=RSS-111

TISSOT editions: http://www.editions-tissot.fr/actualite/droit-du-travail-article.aspx?secteur=PME&id_art=8077&titre=Cotisation+d%E2%80%99assurance+vieillesse+2017


French Payroll Expert

Posted employee or employer without establishment?

posted-vs-esef

When a foreign company send an employee to work in France it has 2 possibilities. A posted employee or the ESEF system.

Posted employee “Salarié détaché”

A foreign employee can be sent by a foreign company to work in France. In this case for the employee to be considered as posted the company must:

  • Keep a relationship of subornation with its employee
  • Normally exercise an activity in the employer’s country

The employee must also:

  • Be a member of the EU
  • Be hired by the company for at least one month

If all the conditions are fulfilled the employee can be posted in France.

The standard duration of a secondment cannot exceed 24 month. Special agreement can be granted for longer periods.

When an employee is posted in France he can keep his original social security and not be subject to the French social security.

To do so he and the company must fill in an A1 form. This form is to be approved by the original social security of the employee. He is then subject to his original social security for the duration of the secondment.

In this case neither the employee nor the employer are subject to the French social security and no contributions are to be paid in France. The employee is kept in the roll of his foreign employer where is social contributions are paid.

As the employee his working in France he is subject to income tax in France.

In the case of a secondment, no pay slip is mandatory.

Employer without establishment in France “ESEF”

A foreign company can have an employee in France without setting up a company or a branch in France. The company then become an employer without establishment in France.

To do so the company must be registered to the French social security URSSAF by filling in an E0 form. The company then become an ESEF.

When an ESEF hire an employee (foreign or French national) the employment is subject to the French labor law. This implies that the employment contract between the company and the employee must be a French employment contract.

The employer and the employee are also subject to the social security and all the related contributions. The mandatory contributions include:

  • Social security (paid to the URSSAF)
  • Employment (paid to the URSSAF)
  • Legal retirement (paid to the URSSAF)
  • Complementary retirement (paid to HUMANIS)
  • Life and health insurance (paid to the insurance of your choice)
  • Professional training tax (paid to the training body you are registered to)

In the ESEF system a pay slip, quarterly and yearly declarations are mandatory.

What system should I choose?

Your choice between sending a posted employee and being an employer without establishment will depend on the goal of your activity in France.

A posted employee is a temporary solution for a specific job or operation taking place in France. It is limited in time and it cannot apply to French employees.

An ESEF is a more lasting solution. It has no time limitation. Also this system allows hiring a French employee. The cost is to be subject to the French labor and social security laws and contributions.

Due to the Brexit the posted employee system may not be available very long for UK companies.


Source :

http://www.cleiss.fr/index_en.html

https://www.urssaf.fr/portail/home/employeur/creer/quelle-urssaf-pour-votre-entrepr/firmes-etrangeres.html

 

French Payroll Expert

Life and Health insurance – 3/3 – How to set it up

life and health insurance

On the 1st of January 2016 it became mandatory for every company under French social law to offer life and health insurance (called “prévoyance” and “mutuelle” in French) to its employees.

What does this means?

What will be the cost for the company and for the employees? And for what benefits?

How does the company setup these contracts?

The French labour law can appear very complex to a foreigner. Our job is to simplify it to the core issue you must deal with.

Therefore, we will see, as simply as possible, what are your legal requirements, how much will it cost you and how to best set it up.

The law

See our previous post.

Cost and benefits

See our previous post.

How to set it up

health insurance

To setup a life and health insurance contract, you need to contact an insurance company or an insurance broker.

Do not hesitate to request 2 to 3 quotes.

Once you have chosen the contract(s) you wish to provide to your employees you will need to return the sign contract to the insurance company along with a registration form. Depending on the contract and the insurance company other documents may be requested.

Then you will have to have all of your employees fill in and sign an individual registration form that you will have to send to the insurance company. This formality can sometime be done online.

You will have to draft a unilateral declaration (called “Déclaration unilatéral de l’employeur” in French) and have it sign by the company and all the employees. This document is a summary of the cost and benefits of the insurance contracts. Unfortunately this document must be in written in French.

The employee will not receive confirmation of his registration to the life insurance. However, he will receive a health insurance card confirming his registration to the health insurance.

The contributions of both contracts will be added to the payroll. The contributions will have to be paid quarterly to the insurance company. Your payroll provide will provide the insurance company with a yearend declaration.

The insurance rate are usually fix for a year. And they usually increase on January of every year. You will receive a notification of the new rate from the insurance company. Make sure it is passed along to you payroll provider for implementation on the payroll.


French Payroll Expert advice


Recently retirement fund started to provide life and health insurance contract. Since your company must be registered to a retirement fund, we recommend that you contact your retirement fund for a quote. If the quote agrees with you it may be a non-negligible benefit to limit the number of contacts by having the same company managing your retirement and you insurance.

If you do not know who to contact to have a quote, do not hesitate to contact us. We will provide you with brokers and insurance company we recommend and who can provide costs in English.

 

You cannot escape it. You must register to a life and health insurance for your employees. To make it simple do not forget to:

  • Be in compliance with the law and your collective bargaining agreement.
  • Evaluate the cost and the benefits with forgetting the HR benefits.
  • Contact us or your payroll provider. It is our job to assist you so that you can focus on your business.

 

French Payroll Expert

Life and Health insurance – 2/3 – Cost & benefits

life and health insurance

On the 1st of January 2016 it became mandatory for every company under French social law to offer life and health insurance (called “prévoyance” and “mutuelle” in French) to its employees.

What does this means?

What will be the cost for the company and for the employees? And for what benefits?

How does the company setup these contracts?

The French labour law can appear very complex to a foreigner. Our job is to simplify it to the core issue you must deal with.

Therefore, we will see, as simply as possible, what are your legal requirements, how much will it cost you and how to best set it up.

The law

See our previous post.

Cost and benefits

Health insurance cost and benefits

Now that you know what contracts you need what will it cost you? And for what benefits?

The French labour law may be complicated but in the matter of insurance contract some things are universally simple.

The more you pay the more you get.

Life insurance

life insurance

For the life insurance, the minimum cost is of 1.5% of the slice A of the officer’s salary (from 0 to 3218 € in 2016 check our web site for more detail). This contribution is paid 100% by the employer.

With this cost, the benefit is only for the employee. It is a lump sum paid to his (or her) heirs’ should he die. And a lump sum or an annuity should the employee be incapacitated.

As we indicated previously, most of the collective bargaining agreement exceed the law. They usually indicate a higher rate of contributions but with higher benefits as well.

Why would you choose a more expensive life insurance?

Except for the obvious HR reason; to provide a benefit to your employee and avoid losing the employee, you company can benefit from a life insurance contract.

When and employee is on sick leave the French labour law state that company must keep paying the employee.

With the correct life insurance contract, the insurance company can reimburse you the salary of your employee when he is on sick leave. The level of reimbursement will change based on the cost of the contract.

Also, please note that except for the minimum legal cost paid 100% by the company, the rest of the cost can be split between the employer and the employee.

Health insurance

health insurance

The minimum cost of the life insurance will depend on the insurance company you choose. Whatever the case it will a monthly lump per employee. The lowest rate we could find on the internet is of less than 10€ per month.

The cost of the health insurance contribution can be split between the employer and the employee.

The benefits of the health insurance are only for the employee. The benefit is that when the employee has health expenses (doctors, hospitals, drugs …) if the social security doesn’t fully reimburse the employee, the health insurance will reimburse part of what is missing from the social security.

The level of reimbursement depend on the cost of the insurance.

French Payroll Expert advice

When you choose a life insurance you must take into account the HR benefit from it but also the financial benefit. Do you have a lot of sick leave in your company? What is the cost of the sick leave compare to the cost of the insurance? But also do not forget the HR benefits. Do not hesitate to ask you payroll provider what is the usual rate in your line of work.

As the health insurance gives no direct benefit to the company, choosing your health insurance is only an HR benefit Vs financial cost matter. If your employees already have a private health insurance you may want to ask them what the benefits are and align your insurance contract with it.

Decrease of the AGS contribution.

AGS contribution

On the 1st of January the AGS contribution decrease from 0,30% to 0,25%

The AGS contribution is part of the unemployment contributions paid to the URSSAF. This contribution is financing the salary guarantee scheme.

The AGS contribution decrease to 0,25%

When an employer is unable to pay the salaries of his employees, the employees can claim indemnity to the AGS. The AGs then pays all or part of the salary to the employees. This scheme is financed by the AGS contributions paid by the employers.

This contribution is based on the gross salary limited to 4 social security ceiling.


Source
Public services: https://www.service-public.fr/professionnels-entreprises/actualites/006582
RF Paye: http://rfpaye.grouperf.com/depeches/35603.html

Find out more on the social contributions in our database accessible on our site for registered members.

Database Database
FPExpert

Increase of the illness contribution.

illness contribution

On the 29th of December 2015, the decree n°2015-1852 was published. This decree increases the employer contribution rate for illness from 12,80% to 12,84%.

The increase of the illness contribution is compensated by the decrease of the AT contribution.

This increase is compensated by a decreased of the work related accident contribution (called AT cotnribution). The average net rate for this contribution is now of 2,38%. In 2015 it was of 2,44%.

The employee contribution rate for illness remains 0,75%.

The illness contribution is based on the full salary and is part of the social contributions paid to the URSSAF.


Source
RF Paye: http://rfpaye.grouperf.com/depeches/35559.html

FPExpert

New GMP retirement setup for 2016

GMP retirement

The GMP retirement is the minimum retirement contribution for executive officers (“cadres”). The GMP is based on the equivalent of a virtual minimum salary. This minimum salary is only used for the calculation of the retirement contributions and the retirement benefits.

The GMP retirement is based on a monthly salary of 3 549,24 €

On the 1st of January the GMP retirement contributions will be of 816,84 €. It will be based on a virtual minimum salary of 42 590,88 € per year (3 549,24 € per month).


Reminder
The GMP is the “Garantie Minimum de Point” which translate as Minimum Retirement Benefit.

Source
RF PAYE : http://rfpaye.grouperf.com/depeches/35539.html

FPExpert