As a foreign company employing staff in France, you must fulfill the obligations relating to the declaration and payment of employer and employee contributions and fees due in respect of that employment. A company headquartered abroad and having no permanent establishment in France may employ salaried staff even if it has no office in France.
There are two scenarios for the recruitment of an employee in France by a foreign employer :
- If the company does not have a permanent establishment in France: The foreign employer may designate by agreement a representative resident in France, or fulfill its obligations directly to organizations dedicated to foreign firms.
- If the company has a permanent establishment in France: The employee recruited will be attached to this establishment, which will be responsible for declaring and paying the contributions under the same conditions as for other employees.
In all cases, the recruitment of an employee in France to carry out a professional activity obligatorily attaches him/her to the French social security system and entails the payment of related contributions.
Registration and declaration of the foreign company employing staff in France: Assignment of a SIRET number
Before recruiting employees, foreign companies with no establishment in France must register with the CNFE (Centre national des firmes étrangères) , by completing the E0 form for the attribution by the INSEE of a SIRET number and affiliation to social organizations (URSAFF and Humanis Retraite et Prévoyance).
The pre-employment declaration (DPAE) is a systematic and nominative declaration procedure for each employee that an employer intends to hire that must be made to the URSAFF, regardless of the duration and nature of the employment contract.
Drawing up pay slips
The foreign company will be required to draw up pay slips and an employment contract for its employees in France. These documents will have to be drawn up in accordance with social regulations.
Payment and declaration formalities for social security contributions and contributions
The foreign employer is obliged to fulfil obligations relating to the declaration and payment of employer and employee contributions to be paid in connection with the employment of salaried personnel.
The employment of an employee in France implies the payment of employer and employee contributions due for :
- the general social security system ;
- the unemployment insurance scheme;
- the compulsory supplementary pension, provident and mutual insurance schemes;
- contributions for paid vacations, bad weather unemployment and prevention of workplace accidents for construction and public works companies.
As part of the withholding tax, the employer will collect the income tax on behalf of the tax authorities.
The tax rate applicable to each employee will be communicated to the employer by the tax authorities through the personal social declaration (DSN). Each month, when paying the employee, the employer will have to apply the rate to the remuneration and deduct the deduction from the net salary to be paid.
In order for the withholding tax to be effective, you will need to have a bank account in the SEPA zone, so don’t forget to open one.
How much does it cost for the employer to employ an employee in France?
In principle, the employer’s charges represent on average 42% of the gross salary, and the employee’s social security charges represent on average 23% of the gross salary.
Do you want to hire an employee in France? contact us.
We will take care of all the necessary formalities for the declaration of your wages in France.
Déborah Zerbib has several years of experience in the field of personal and international taxation after a Master II specialized in Tax Law.