Employing and setting up payroll in France – a quick guide

Employing and setting up payroll in France – a quick guide

March 05, 2019 || ReportsFranceLegal

You have made the decision to establish your business in France and you plan to hire employees. The first step is to establish your company and register it at the Commerce Register (“Greffe”). This will require drafting your company’s articles of incorporation and determining its legal form. The choice of your company’s articles of incorporation requires your full attention. These are the three most common company types for international firms establishing in France:

SARL: limited liability company

SAS: limited liability company by shares

SA: public limited company

Do I need a company in France to hire people?

No, it is not necessary, but in moste cases it makes sense. In order to choose the most adequate company form, it is a recommended to engage a lawyer specializing in corporate law. Internago works with French lawyers, which can advise you on the best option for your company. It also possible to establish a branch for the international mother company, and also to employ directly from the mother company. A final option for a foreign company is to employ staff without having any local establishment in France. This is called SEF (“sans établissement en France”). Still the company needs to contact URSSAF (the Strasbourg branch) to proceed with the registration process to become a conform employer. There are several legal and tax considerations to be made in the choice of the establishment process, which requires the advice of a lawyer and a tax specialist.

How do I register as an employer?

Once the registration is complete, the CFE (“Centre de formalités des entreprises”) file is the application used to register your business with the relevant institutions. The CFE provides you with a receipt for your application. The French National Institute of Statistics and Economic Studies , INSEE assigns your company with an identification number, the SIRET (14 digit number), which is unique to your business. This number comprises the SIREN number, which identifies the legal entity) and NIC number, which identifies the business geographically. The company is also allocated an APE code indicating the primary activity of the business. Once your company is formed and registered in the Commerce Register, you are ready to hire your first employee. The procedure is quite simple. To declare your employee, you must draw up a Pre-employment Declaration (DPAE) 48 hours before the employee is hired. The DPAE can be found on the following website at this link this DPAE will have the effect of opening your URSSAF account. URSSAF is the management body for French social security. It manages, among other things, employees’ rights to health insurance, the mandatory retirement pension, and family allowances. Please note that the DPAE is mandatory for all hiring even after opening the company’s account with URSSAF.

Registration for pension

The company must also be registered with a supplementary pension organisation. This is a pension system that complements the old-age scheme (“régime de viellesse”) provided by Social Security. The pension fund is determined in the first place by the business identifier code (APE) given to you by the business start-up centre (CFE). If no pension fund is allocated to your business identifier code (APE), the pension fund assigned will depend on the location of your place of business declared at the time of the company’s formation.

Private health insurance – la mutuelle

In France, it is also mandatory to subscribe to a private health insurance (“mutuelle”) for all employees. You can subscribe to such private health insurance with insurance companies such as Axa, Gan, Allianz, Swiss Life, or Generali, or with a pension organisation such as Ag2R, Klesia, or Malakoff Médéric etc. Although it is mandatory to subscribe to private health insurance, your employees are not obliged to join if they are covered by other affiliations. Yet, in order to be exempted from joining the mandatory private health insurance scheme, your employees must provide proof of coverage from another health insurance. Some employees are automatically excluded from subscription to a private health insurance. These are, for example, fixed-term employment contracts (CDD) shorter than 12 months, and beneficiaries of Universal Health Coverage (CMU – Couverture Maladie Universelle). It is also necessary to draft a document with the assistance of a Human Resources advisor that includes a unilateral decision made by the employer specifying the adherence conditions of the employees for the private health insurance.

Life and accident insurance – prévoyance

Finally, depending on the collective agreement of your company, which in turn depends on the business activity of your company, it may be necessary to subscribe to a private accident- invalidity and life insurance (“prévoyance”). This insurance guarantees the employees throughout the duration of their employment against the risks of total or temporary incapacity, providing an education annuity, as well as benefits for the employee’s family in case of death. The company can subscribe to this type of contract with a local insurer such as Axa, Gan, Allianz, Swiss Life, or Generali… or with a pension organisation such as Ag2R, Klesia, or Malakoff Médéri.

Internago can help you to set up your company and register you as an employer in France and get started with payroll. We offer a full payroll solution with local payroll consultants and a web system for an easy workflow of payroll processing. Welcome to contact us here with any question.


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