How to Put an Employee on Payroll in France
To put an employee on payroll in France, the employer must file a pre-hiring declaration (DPAE) with URSSAF before the employee starts, apply the right collective agreement, and submit a monthly social declaration (DSN) that reports salaries, social contributions and income tax withheld at source. A foreign company without a French entity can register as a foreign employer with URSSAF’s national centre for foreign companies (CNFE), set up a French entity, or use an Employer of Record (EOR) that operates compliantly under French law.
Three decisions to make before your first French hire
These three choices shape the contract, the payslip and the cost of the employee. Make them before you send an offer.
1. Who will be the employer?
- EOR: fastest for a first hire. French law prohibits lending staff to another company for profit, except under specific regimes such as temporary work agencies, so work with an EOR whose French set-up is compliant.
- Foreign employer without an entity: register with the CNFE, part of URSSAF, which handles contributions for foreign companies without a French establishment. You carry all employer obligations.
- French entity (SAS or SARL): registered through the national one-stop business formalities portal (guichet unique). The minimum share capital is €1, but running costs and admin are significant for a small team.
2. Which collective agreement applies?
Almost every French employer falls under a sector collective agreement (convention collective), identified by an IDCC number. It sets job classifications, minimum salaries, notice periods, sick pay top-ups and often a 13th month. It is determined by your main activity, not chosen freely.
3. Is the employee a cadre?
French employees are either cadres (managers and professionals) or non-cadres. The status changes the probation period, working-time arrangements and some contributions, such as mandatory employer-funded death and disability cover (prévoyance) for cadres.
The French admin calendar for a new employee
France runs almost all payroll reporting through one monthly file, the DSN. Before that first DSN, a few one-off steps must be done in order.
| When | What | Where it goes |
| Up to 8 days before the start date, at the latest before work begins | Pre-hiring declaration (DPAE) | URSSAF (or CNFE for foreign employers) |
| On the first day | Add the employee to the single staff register (registre unique du personnel) | Kept by the employer |
| From the first day | Enrol the employee in the company’s complementary health insurance (mutuelle) and, where applicable, prévoyance and supplementary pension (AGIRC-ARRCO) | Insurer and pension institution |
| Generally within 3 months of starting employment, subject to certain exceptions | Information and prevention visit with the occupational health service | Service de prévention et de santé au travail |
| Every month | Payslip (bulletin de paie) and salary payment | Employee |
| By the 5th or 15th of the following month, depending on the applicable deadline | DSN with salaries, contributions and income tax withheld | Net-entreprises portal |
The income tax withholding rate (prélèvement à la source) is supplied by the tax authority in response to the DSN. Until it is available, a default rate from the official scale applies.
French contract rules foreign employers must know
French employment law is detailed and formal. These are the rules that most often differ from what foreign companies expect.
- Written in French: the employment contract must be drafted in French. A foreign employee can ask for a translation, but the French version is the reference.
- Permanent is the default: a permanent contract (CDI) is the norm. A fixed-term contract (CDD) is only allowed for specific reasons, such as replacing an absent employee or a temporary increase in activity, and usually ends with a 10% end-of-contract payment.
- Probation period (période d’essai): up to 2 months for employees and workers, 3 months for supervisors and technicians, and 4 months for cadres. It can be renewed once if the collective agreement allows it, and must be stated in the contract.
- Working time: the legal working week is 35 hours; hours above that are overtime. Many cadres work on an annual day-count arrangement (forfait jours) instead.
- Paid leave: 2.5 working days per month worked, which adds up to 5 weeks a year.
- Transport: the employer reimburses at least 50% of the employee’s public transport pass.
- Dismissal: requires a real and serious cause and a strict procedure, including a prior meeting with the employee.
Why gross and net are so far apart in France
France has some of the highest employment costs in Europe. Employer contributions can represent a significant additional cost on top of gross salary, with the actual amount varying depending on factors such as salary level, employee status, collective agreement and applicable reductions or exemptions. Near the minimum wage (SMIC), a general reduction lowers the employer’s share considerably.
A French payslip groups contributions into blocks:
| Contribution block | Paid by | What it covers |
| Health, maternity, disability | Mainly employer | Public health insurance |
| Old-age pension (base) | Employer and employee | State pension |
| Supplementary pension (AGIRC-ARRCO) | Employer and employee | Mandatory top-up pension |
| Unemployment insurance | Employer | Unemployment benefits |
| Family allowances | Employer | Family benefits |
| Work accidents and occupational disease | Employer | Rate depends on sector and company |
| Complementary health (mutuelle) and prévoyance | Employer (at least 50% of the mutuelle) and employee | Health top-up and death or disability cover |
| CSG and CRDS | Employee | General social contributions on income |
| Training, apprenticeship tax, housing and other levies | Employer | Various social funds |
Income tax is then withheld at source from the net taxable salary, using the rate supplied by the tax authority.
Common mistakes foreign employers make in France
- Budgeting on gross salary alone. Candidates negotiate in annual gross (brut annuel), but the employer’s real cost is often around 1.4 times that.
- Missing the DPAE. The DPAE must be submitted before the employee starts work. Failure to complete the DPAE correctly or on time may result in penalties and may have consequences under undeclared work rules.
- Ignoring the collective agreement. Paying below its minimum for the job classification, or skipping its bonuses, leads to back pay claims.
- Using an English-only contract. Terms not available in French may not be enforceable against the employee.
- Hiring someone as a freelancer when they work like an employee. French authorities and courts can reclassify the relationship as employment, with back contributions.
- Forgetting headcount thresholds. A CSE must be established when the company reaches the legal threshold of 11 employees for the required period, subject to the applicable rules. Mandatory profit-sharing (participation) requirements apply when the company reaches the applicable employee threshold and the relevant conditions are met.
Frequently asked questions
Can a foreign company employ someone in France without a French entity? Yes. It can register as a foreign employer with the CNFE and run French payroll, or use a compliant EOR that employs the person on its behalf.
What is the DSN? The déclaration sociale nominative is a monthly electronic file that reports each employee’s pay, contributions and income tax withheld. It replaces most separate social declarations.
How much does an employee cost in France? For a mid-level salary, budget around 40% to 45% on top of gross pay for employer contributions, plus benefits such as the mutuelle, meal vouchers and transport reimbursement.
Is EOR allowed in France? Yes, if structured correctly. Lending staff to another company for profit is prohibited outside specific legal regimes, so check how an EOR is set up in France before signing.
What is the difference between EOR and portage salarial? Portage salarial is a French arrangement for independent professionals who find their own clients but want employee status. EOR is used by a company that wants to employ a specific person it has recruited.
How Parakar helps companies hire in France
Parakar brings over 25 years of international payroll & HR experience and offers EOR services in France. We handle the DPAE, collective agreement, contributions and monthly DSN, so your French hire is paid correctly from the first month. When you set up your own French entity, we can take over its payroll too.
Hiring your first employee in France? Talk to a Parakar specialist about the right route for your company.
