EOR in France: Costs and Employer Contributions Explained

Would you like to hire an employee in France or use a French umbrella company (EOR – Employer of Record) to employ a worker in France?
In this article, we explain the cost of an employee and French regulations.

Understanding the cost of an employee in France

The cost of an employee to an employer is not just the salary paid. The overall cost of an employee takes into account the net salary, employee contributions and employer contributions.

The employee receives the net salary minus the income tax paid by the employer to the tax office.

In France, the salary mentioned in the employment contract is the gross salary. It corresponds to the net salary plus employee contributions. The employer also pays the employer’s contributions. The total sum is the cost of the employee.

Employee cost = Net salary + employee contributions + employer contributions

The employee receives the Net Salary less income tax in his bank account.

For a contract with executive status, the amount of contributions is as follows:

• Employee contributions: between 22 and 24% of gross salary
• Employer’s contributions: between 44% and 45% of gross salary

The rates vary according to the amount of the salary and the type of contract (fixed-term or permanent contracts).

If you wish to use a French umbrella company (known as EOR – Employer of Record) to employ a worker, the employee will receive a pre-tax net salary of 50% of the total cost.
For example, if you want the employee to receive a salary of 5,000 euros net (before tax), the portage salarial company will have to bill you 10,000 euros.

What are the social security contributions? What are they for?

Whatever the contract, the employee receives a net salary after the deduction of social security contributions. It is the employer who declares these contributions to URSSAF.

Here are the main contributions:

1. Social Security contributions: These cover several branches:
   • Sickness: for health care.
   • Old age: for retirement.
   • Industrial accidents and occupational diseases.
   • Family: for family allowances.
2. Unemployment insurance: If you are an employee, you also contribute to unemployment insurance, managed by France Travail.
3. Supplementary pension: In addition to the basic pension scheme, private-sector employees pay contributions to supplementary pension funds such as Agirc-Arrco.
4. Training: A contribution is also made to finance training.
5. Health contributions: In addition to Social Security, mutual health insurance can also be taken out to cover non-reimbursed medical expenses.

How does freelance administration work?

Do you want to hire a worker in France? Do you want them to benefit from French social protection without having to set up your own structure? Do you want to minimize your risks?

Then a French umbrella company (also known as EOR – Employer of Record) is the ideal solution for you. It takes less than 24 hours to set up. We sign a service contract with you and an employment contract with the worker. We invoice you for the services provided and convert the fees into a salary. You are relieved of all French administrative constraints.

You could also deepen your understanding of related topics:

• The Advantages of a French Employer of Record (EOR)
• Working Abroad with the Status of Secondment
• How to Get a Work Visa in France
• Portage Commercial: Benefits of Specialized Services
• IR35: UK Tax Legislation
• Payroll Services in France
• Types of Employment Contracts with an EOR