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

Thomas BIDOU has been sworn in as a new assessor at the social security tribunal

In late January our CEO Thomas BIDOU was sworn in as a new assessor at the social security tribunal.

What is the social security tribunal?

When an employer or an employee has a problem with the social security the first step is to seek an amicable recourse.

If the recourse is not satisfactory for the employer (or the employee) the next step is to go to court. This court is the social Security tribunal called TASS (Tribunal des Affaires de la Sécurité Sociale).

What does an assessor do?

The court of the social security tribunal is composed of one professional judge, one assessor from an employee union and one assessor from an employer union.

The decisions of the tribunal are taken by the majority of the three (judge + assessor).

An assessor therefore renders justice in the name of the French people. The decisions of the assessor are based on the law (social security code).


Source:

La CNDI (employers union) : http://www.la-cndi.fr/tass/


French Payroll Expert

Hiring Process

What you need to know and do to hire an employee in France.

You have done your interviews and you finally found the right candidate for the job. Now what?

Engagement letter

If the employment contract is not yet ready it is a common practice to write an engagement letter to your future employee.

However, be very careful. This letter will be legally binding. Should you decide not to continue with your future employee he can go to court and a claim heavy indemnity. The law considers an engagement letter as an employment contract.

Therefore, should you write the engagement letter we strongly recommend that you limit your wording to the legal requirement. These requirements are:

  • Job description
  • Expected starting date

Employment contract

Legally a signed employment contract is not necessary. However, if you do not sign an employment contract the employee will considered as a full-time employee on an undetermined term contract.

Since the employment contract will establish the basis of your relationship with your employee, we strongly recommend that it be drafted by a lawyer.

The employment contract must be signed by both parties as soon as possible.

French Payroll Expert very strongly recommend that you have the contract drafted before the first day of your new employee. You will then be able to have the employee sign the contract at least on his first day on the job.

Employee data

To hire a new employee, you will need to know a lot of information about him. A simple resume with a name and an address is largely inadequate.

The best way to collect of these data is to have an employee file temple that your employee will file in on his first day.

You will find at the end of this post the temple French Payroll Expert is using.

Employee documents

Even if trust and loyalty are a very important part of the employer/employee relationship, you will need your employee to provide you with documents to prove his words.

These documents will also be need for some of the registration process. They are the following:

  • ID card and/or passport
  • Social security attestation (we recommend you do not limit yourself to the social security card)
  • Work permit (do not forget to send a copy of the permit to the authorities for authentication)
  • Disabled worker attestation
  • Public transportation attestation
  • Bank detail
  • Attestation of affiliation to a mandatory health insurance (if an exemption is possible and requested)
  • Children(s) school certificate (if they are over 16 for registration to the life insurance)

We recommend that you request the employee to come with originals of which you will make copies.

Employee registration

To the social security

You (or your payroll service provider) will need to do the employee’s registration to the social security.

This registration is a very simple process done via the internet on this web site: https://www.due.urssaf.fr it is called the DPAE.

You will automatically receive a receipt to be keep. It will be asked in case of an URSSAF audit or a labour inspection.

This registration does not need any signature therefor it can be done by a third party.

To the retirement fund

The registration of the employee to the retirement fund is automatically done with the social declaration. Neither you nor your payroll provider need to do anything.

The life and health insurance

Registration to the life and health insurance is mandatory. To register your employee, you will need to file a registration form.

These forms are specific to the insurance company. You may have one per contract or you both contracts are provided by the same insurance only one.

However, there are some elements that will not change.

For the life insurance, the employee will need to indicate who will be the beneficiary of this insurance. He will also need to sign this document.

For the health insurance, the employee will need to sign the document. He may also have to indicate he his/her children and/or spouse are to be affiliated to the insurance. He will then have to provide the requested school certificate.

AS these documents require the action of the employee they cannot be done by a third party. However, preregistration can sometime be done via the internet on your insurance companies web site. Do not hesitate to contact your insurance company about that.

In 2017 the registration process is supposed to change with the DSN declaration. However, most of the insurance company are not yet ready and document and information from the employee will be required. Therefore, we recommend you do not yet throw away your registration template.

Occupational medicine

Every new employee must go to a medical check-up done by the occupation medicine doctor before the end of his trail period.

The registration of a new employee is usually done with the request for the 1st medical check-up.

This request can be done by email or via the medicine web site or even by a simple phone call.

The check-up must be done within working hours. If you have variable planning, you need to make sure that the individual doing the booking knows the employee’s planning.

Employee information

Somme mandatory information needs to be given to the employee. For each one of them you will need to have a signed receipt from the employee. They are the following:

  • DSN information letter.
  • Life and health insurance coverage details.
  • Life and health insurance DUE (employer’s unilateral declaration).

This receipt may be requested by the URSSAF or the labour office in case of an audit or an inspection.

Best practice

In theory, the best practice for hiring a new employee is simple. Once your interviews are finish you must:

  1. Send the engagement letter.
  2. Send the DPAE to the social security.
  3. Draft the employment contract.
  4. Inform the employee of the data and documents needed on his first day.
  5. Fill in the employer part of the life and health registration documents.

On the employee’s first day you must:

  1. Have the employee sign the employment contract.
  2. Have the employee provide you with his personal data.
  3. Have the employee provide you with the needed documents.
  4. Have the employee fill in the life and health registration documents.
  5. Give the employee the DSN letter.
  6. Give the employee the life and health insurance coverage details.
  7. Give the employee the life and health insurance DUE.
  8. Book the employee’s first medical check-up.

In real life we all know that it is not that simple. Document are missing information are incomplete…

This is why French Payroll Expert recommend that you have check list for the entire process. And that this check list is kept open until it fully checked. You will find with this post the check list we are using for our clients.


Sources:

https://www.service-public.fr/particuliers/vosdroits/F10403

https://www.service-public.fr/particuliers/vosdroits/F15635

https://www.service-public.fr/particuliers/vosdroits/F2211


 Document:
Download our hiring process file on our database.
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

Income tax withholding in France

Very common in many countries, the withholding of the income tax is a new system in France.

When

The withholding of the income tax has been announced over 6 months ago, by the French government.

However, it will only become a reality in January 2018.

The is no need to stress about it yet.

Who

The withholding of the come tax will be applied to every one with a taxable income.

To put it simply if on your employee pay slip you can read an amount for the “net imposable” (taxable net), then you will need to withhold the income tax

What rate

The rate of the withholding is a personal one for each employee. Therefore, every employee must inform the employer of his rate.

The employee will be informer by the fiscal authorities of his 1st rate by the fiscal authorities in October 2017 once he has completed his 2016 income tax declaration.

If the rate changes during the year, the employer will be directly informed by the authorities.

How

In January 2018, there will be a new raw on your employee’s pay slip. It should be called “Prélèvement à la source”.

This raw will be the withholding, it will in deduction to the net to be paid.

The employer will then pay the withheld tax to the authorities. The payment period is not yet known but it will most likely be a monthly payment.

The declaration will be done via the DSN (new declaration format active in 2017), and the payment via direct debt should be recommended by the authorities.

French Payroll Expert Advises

The income tax withholding will be a non-event as long as:

  • You collect the income rate from you employees. We recommend that you add the request of this rate to your process for all newly hired employee starting October 2017.
  • You remember that the withheld tax must be paid. The fiscal authorities are even less kind about unpaid tax that the social authorities with unpaid contributions.

Source
https://www.service-public.fr/particuliers/actualites/A10458
https://www.service-public.fr/professionnels-entreprises/actualites/A10614

French Payroll Expert

The Absences

During his life in his company, the employee can be absent from work.

The French law strictly regulate these absences. You will find in this post a short list of some possible absences and their regulations.

Paid vacation

Each employee is allowed 25 opened day of vacation per years for a full year of work.

When an employee joins a company he doesn’t have any right to vacation days. He needs to acquire them.

Each employee acquires 2,08 opened days of vacation for a month of work. He can only use these vacation days once they are acquired.

Legally the acquisition period is from June to May. This means that an employee should not be allowed to use his acquired vacation before June of the next year.

Example:

An employee joins a company on November 2015. He acquires 2,08 days of vacation per month from November 2015 to May 2016. However, he can only use them starting June 2016.

At the end of May 2016, he would have acquired 14,56 (2,08 x 7) days. At the end of the period the acquire days are always rounded to the higher digit. Therefore, starting June 2016 he will be able to use 15 days of vacation.

At the end of May 2017, he would have acquired 25 days to be used starting June 2017.

Collective Bargaining Agreement

A collective bargaining agreement can give additional vacation days to an employee based on his seniority.

RTT

The RTT are compensation days for unpaid overtime. They are also called rest days.

When the legal working time became 35 hours per week, the employer had the possibility to keep the previous legal working time (39 hours per week) without paying overtime. In compensation, they had to give their employee extra rest days. These days are the RTT.

The RTT are acquire monthly and they must be used before the end of the civil year.

The number of acquired RTT will change based on the type of employment contract (based on the hour or based on the day worked) and the working time.

Example:

The calculation for the number of RTT of a “cadre” (usually translated as executive) with a working time of 218 days per year is the following:

Number of days in a year – number of vacation days – number of weekend days – number of bank holidays during the opened days – number of worked days = number of RTT days

In 2017 it is:

366 – 25 – 104 – 9 – 218 = 9

Therefore, the employee acquires 0,75 RTT days per month.

Bank Holidays

The bank holidays are normal working days for which the employee is not required to work.

In France (except Alsace-Moselle region) the bank holidays are the following:

New year: 1st of January

Easter Monday: The 1st Monday after Easter

Labour day: 1st of May

Ascension Thursday: 40 days after Easter

The 8th of May: world war 2 victory

Pentecost Monday: 50 days after Easter

National Holiday: 14th of July

Assumption day: 15th of August

All Saints day: 1st of November

The 11th of November: End of world war 1

25th of December: Christmas

Only the 1st of May is a mandatory rest day. The rest of the bank holidays can be worked should the employee.

Collective Bargaining Agreement

The law does not state that a worked bank holiday should be over paid. However, it is very common to have such statement in the collective bargaining agreement.

Sick leave and accident

During the life of an employee sickness or accidents may happen.

The absences to these causes are allowed as long as the employee provides a certificate from his doctor.

There is no limit to the number of sick or accident leave allowed to an employee.

During this absence, the employee is paid by the social security. The indemnity paid is called IJSS “Indemnité journalière de securité sociale”.

However, if the employee has at least 1 year of seniority, and if the social security pays the indemnity, the employer as the obligation to pay the employee 90% of his salary for 30 days and then 2/3 of the salary for 30 more days. Each duration is increase by 10 days every 5 year of seniority.

This indemnity only applies after 7 days in case of a sick leave. In case of an accident this indemnity applies from the 1st day of leave.

The IJSS are deduced from the employer indemnity so that the employee doesn’t get paid twice. To simplify the calculation, the employer can ask that the IJSS be paid to the company.

Collective Bargaining Agreement

The collective bargaining agreement can increase the duration and the rate of the employer’s indemnity.

Maternity leave

When a female employee is pregnant she is allowed a maternity leave. The duration of this leave will depend on the number of children to be born and the number of children the employee already has.

Family situation Number of week
Before giving birth After giving birth Total
Mother with less than 3 children 6 10 16
Mother with 3 children 8 18 26
Twice 12 22 34
Triplets or more 24 22 46
Sickness of the mother + 2 + 4

 

During the maternity leave the employee is paid by the social security.

Collective Bargaining Agreement

Due to the collective bargaining agreement, the employer may have to pay an indemnity to the employee during her maternity leave.

Paternity leave

When an employee becomes a father, he is allowed paternity leaves.

There 2 type of leaves.

The birth leave is a 3-day special leave granted by the employer. This leave is paid 100% by the employer.

The paternity leave is a leave of 11 days granted by the social security. This leave is paid by the social security.

Collective Bargaining Agreement

The collective bargaining agreement can increase the duration of the birth leave. Also due to the CBA the employer may have to pay and indemnity to the employee during the paternity leave.

Parental leave

When an employee becomes a mother or a father he is allowed a parental leave if he has at least 1 year of seniority.

The leave can start after the maternity leave and can last up to the 3rd birthday of the child.

The parental leave is paid by the social security family allowance.

Leave for family events

The French law authorize the employees to have specific days of for specific events.

The events and days allowed are the following:

Event Number of days Paid
Wedding of the employee 4 days Yes
PACS (civil union) of the employee 4 days Yes
Birth of child (or adoption) 3 days Yes
Death of a child 2 days Yes
Death of a spouse (wedding or PACS) 2 days Yes
Wedding of a child 1 day Yes
Death of a mother/father/step-mother/step-father 1 day Yes
Sickness of child of less than 16 years old 3 days per year No
Sickness of child of less than 1 year old 5 days per year No
Sickness of child of less than 16 years old if the parent has at least 3 children of less than 16 years old 5 days per year No
If a parent needs to take full care of the child with grave sickness of handicap 310 days over 3 years No

 

Collective Bargaining Agreement

Your CBA can add other events or increase the number of paid days. The most common example (and frequently requested by the employee) is the moving day.

When an employee changes his home address he usually thinks he is untitled to 1 day of leave. This is not true unless your company’s CBA says so.


 

This listing of the absences is not exhaustive and very simplified. Do not hesitate to contact us or your payroll provider for more détails.



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.