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- How do you negotiate a salary in France?<\/li>\n
- When does the employer have to pay their employee?<\/li>\n
- Which type of American company does the SARL or SAS stand for?<\/li>\n<\/ul>\n
Here are some of the answers.<\/p>\n
7 tips on French business practices<\/h2>\n
![\"business](\"https:\/\/jcarmand.com\/en\/wp-content\/uploads\/2013\/11\/business-practices-in-france.jpg\" "\\"Business")
<\/p>\n1. Business practices in France: employer employee relations<\/h3>\n
The net salary is always after deduction of payroll taxes, but before deduction of income tax.<\/p>\n
In France, as opposed to many countries (USA, Canada, UK, Northern European countries, Germany), income tax is not prepaid by the employer. It’s separately paid directly by the employee the following year.<\/p>\n
Unless specified, when negotiating a salary in France gross salary is always implied. And it is this gross salary that is mentioned in the employment contract.<\/p>\n
Nonetheless, nothing prevents the parties from negotiating a net salary, as is the practice in some countries (USA, Germany). Moreover, this practice has been growing in recent years. However, the hiring company will have to calculate from this net salary a gross salary that will be mentioned in the employment contract. In order to find the gross salary, the net salary must be divided by about 0.77.<\/p>\n
The salary is always paid at the end of the month, except in some cases (resignation, dismissal, end of a contract).<\/p>\n
Pay slips are the size of a novel!The reason: as opposed to many countries, there is not only one body that collects payroll taxes; the company is in charge of redistributing the amounts to each beneficiary body.<\/p>\n
However, since the beginning of 2011, the collections from URSSAF<\/a> (health and retirement) and POLE EMPLOI<\/a> (unemployment benefits), the two major insurance funds have been unified.<\/p>\n
2. Business practices in France: payroll taxes<\/h3>\n
Welfare taxes are paid monthly unless the company employs less than 10 people, in which case they are paid quarterly.<\/p>\n
Since the taxes are collected from both the company as well as the employee, they represent 88% of the net salary.<\/p>\n
It is a large amount that surprises many foreign companies\u2019 CFOs at the start of an activity in France.<\/p>\n
3. Business practices in France:\u00a0VAT<\/h3>\n
The VAT, as its name implies, is the tax collected at each step of the value chain.\u00a0Consequently, every company is subjected to this tax.<\/p>\n
The VAT charging mechanism on purchase and sales make the VAT neither a burden nor revenue for companies. However, the VAT is a cost to the final consumer. It is not the case of State sales tax in the USA, which in its principle is also a tax on the final consumer, but only some activities are liable and the rate varies from State to State.<\/p>\n
In principle, the VAT is paid monthly. Companies whose turnover is below a certain amount can pay it quarterly.<\/p>\n
4. Business practices in France: corporate tax<\/h3>\n
France has a very centralized administration; companies only have one income tax return to fill, and pay corporate tax solely to the French State.<\/p>\n
In other words, there is no income tax return to fill or to pay at a regional, provincial, Lander or departments\u2019 levels, as opposed to federal states (USA, Canada, Germany) or confederate states (Switzerland).<\/p>\n
5. Business practices in France: relations with administrations<\/h3>\n