Working and paying tax in France — contracts, charges, and PAS

Employment contracts — CDI, CDD, intérim, freelance

CDI (contrat à durée indéterminée) is the gold standard French contract — indefinite term, strong protection against dismissal, full benefits, and long notice periods (typically 1–3 months). Around 87% of French employed are on a CDI. Employers find it hard to dismiss CDI employees outside genuine economic reasons or serious misconduct (faute grave).

CDD (contrat à durée déterminée) is fixed-term, capped at 18 months total including renewals, and used for seasonal work, replacements, or specific projects. Comes with a 10% precarity bonus at the end of the contract. Repeated CDDs can be requalified into a CDI by labour courts.

Intérim (temporary agency work) and freelance (auto-entrepreneur, profession libérale, micro-entreprise) cover the rest. Auto-entrepreneur status is the simplest self-employed framework — one form online, social charges as a flat percentage of revenue (12.3–22.0% depending on activity), capped revenue at €77,700/year for services and €188,700/year for retail.

Social charges — the wedge between gross and net

French employees see two different "salary" figures: salaire brut (gross) and salaire net (net, before income tax). The wedge is around 22% — that is the employee's share of social charges (health, pension, unemployment, family benefits). The employer contribution on top (which doesn't show on your slip but represents the full labour cost) is another ~40% of the gross — meaning the total cost to the employer of a €40,000 gross salary is closer to €56,000.

Take a gross salary of €40,000/year: the employee's social charges deduct ~€8,800/year, giving net before tax of ~€31,200/year. Then income tax (PAS) is deducted at source — the rate depends on household composition. A single employee with no dependants pays roughly €2,400 income tax on €31,200 net, leaving ~€28,800 in the bank. The 22% deduction is consistent across most jobs and unionised salary structures.

Income tax — prélèvement à la source (PAS)

Since 2019, French income tax (impôt sur le revenu) is collected at source via the prélèvement à la source (PAS). The DGFiP (tax authority) calculates a personalised rate based on your household ("foyer fiscal") and sends it to your employer; the rate is applied to each pay slip. Your annual tax declaration in May reconciles any over- or under-payment.

Income tax is progressive — 0% up to €11,294 (2024 brackets), 11% to €28,797, 30% to €82,341, 41% to €177,106, 45% above. Rates are calculated per household and per "part" (children count as half a part each, third child onwards as a full part), making large families noticeably tax-advantaged versus individuals.

Most employees just verify the auto-filled declaration in May at impots.gouv.fr. Self-employed declare their actual net business income; the DGFiP recalculates the rate and applies it from September. First-year arrivals may need to pay manually for the months before PAS catches up.

The 35-hour week, RTT, and overtime

The 35-hour working week (durée légale du travail) was introduced in 2000 and remains the legal default. Most employees work between 35 and 39 hours per week; the gap above 35 is compensated by additional paid days off (RTT — réduction du temps de travail), typically 8–12 RTT days per year. Some companies have negotiated different setups via collective agreements (forfait jours, particularly common for managerial cadre roles).

Overtime above the standard hours is paid at +25% for the first 8 hours and +50% beyond. Sunday work is generally restricted (Code du Travail) and triggers premium pay where allowed. The right to disconnect outside working hours (droit à la déconnexion, since 2017) limits employer expectations on out-of-hours availability.

Leave entitlements

Every employee accrues 2.5 days of paid leave per month worked — 5 weeks/year (25 working days) total, plus the RTT days mentioned above. Leave is taken in agreement with the employer; refusal must be justified.

Sick leave: covered by Sécurité Sociale at ~50% from day 4 of absence (employer often tops up to 90% via the convention collective during the first weeks). Maternity leave is 16 weeks (more for third+ children); paternity leave is 28 days (extended in 2021); parental leave can extend to 36 months unpaid with job protection. Bereavement, marriage, child-illness, and family-care leaves are also codified.

Dismissal and severance

Dismissing a CDI employee requires a "real and serious cause" (cause réelle et sérieuse) and a procedural framework — written notice, an interview, and a formal letter. Genuine economic dismissals (licenciements économiques) trigger statutory severance (typically 1/4 month per year for the first 10 years, 1/3 month thereafter), unemployment benefits, and reclassification support.

Faute grave (serious misconduct) and faute lourde (gross misconduct) allow dismissal without severance. Disputes are heard by Conseils de Prud'hommes (specialist labour courts), which historically rule in favour of employees more often than not.

Mutual agreement to part ways is possible via "rupture conventionnelle" — increasingly common, often the employer pays statutory severance plus a bit more in exchange for the employee's consent. The employee then qualifies for unemployment benefits, which they would not after voluntary resignation.

Unemployment — France Travail (formerly Pôle Emploi)

Unemployment insurance covers former employees (CDI, CDD, intérim, rupture conventionnelle) — voluntary resignations are mostly excluded. After registering with France Travail (renamed from Pôle Emploi in 2024), benefits run typically 60–75% of prior salary for 18–24 months for those under 53, longer for older workers.

Means-tested top-ups (RSA — Revenu de Solidarité Active) cover those with no entitlement or expired benefits. The minimum benefit floor (€635/month for a single in 2024) keeps the system inclusive. Compulsory job-search activity and training are part of the package; sanctions exist for repeat refusals.

Self-employment frameworks

Auto-entrepreneur (now called micro-entrepreneur) is the simplest framework: register online via auto-entrepreneur.urssaf.fr, declare revenue monthly or quarterly, pay social charges as a flat % of revenue (12.3% retail, 21.2% services BIC, 21.1% liberal BNC, 22.0% liberal CIPAV), and pay income tax either via PAS or via the optional "versement libératoire" (1.0–2.2% of revenue). Capped at €77,700/year for services and €188,700/year for retail.

For larger or more capital-intensive activities, options include EI (entrepreneur individuel), EURL/SARL (limited-liability single-owner or multi-owner), SAS/SASU (joint-stock with one or more owners). SASU is increasingly popular for solo consultants who outgrow auto-entrepreneur — more administrative overhead but lower social charges on dividends and clearer separation between personal and business.

Profession libérale (architects, lawyers, doctors, accountants, etc.) has its own frameworks under the Caisses d'Assurance Maladie spécifiques.

Cadre vs non-cadre — managerial status

French employment law distinguishes between cadre (managerial / professional) and non-cadre status. Cadre status comes with higher pension contributions (and ultimately higher pension), broader job description, often a "forfait jours" arrangement (annual day-count rather than weekly hours), longer notice periods, and access to APEC for executive job-search. Salaries are typically higher; non-cadre roles dominate at the median income.

Most engineers, mid-level managers, and senior specialists are cadres. The convention collective (industry-wide collective bargaining agreement) determines who qualifies. Increasingly common to see cadre status offered as a benefit at hiring negotiations.

Foreign income, double taxation, and tax residency

France taxes worldwide income for tax residents. You become tax-resident if any of: France is your principal home; you spend 183+ days/year there; France is the centre of your economic interests; or you primarily work there. Many countries have double-taxation treaties with France allowing credit for tax paid abroad.

Foreign rental property, dividends, interest, and pensions are all declarable in your annual French return — boxes for each are on the form. Failure to declare is taken seriously; FATCA and CRS information-sharing means the DGFiP is well-informed about French residents' foreign accounts. Holders of foreign accounts above €50,000 must declare them on form 3916 alongside the main return.

Newcomers benefit from the "régime des impatriés" — for up to 8 years, an "impatriation premium" portion of salary can be tax-exempt, plus 50% exemption on foreign-source passive income. Eligible if you were not French tax-resident in any of the 5 prior calendar years and were specifically recruited from abroad.