Managing payroll in France is more than compliance and numbers, as Tim Kelsey, MCIPP, AIPA, teaches in this three-part webinar, hosted by the Global Payroll Management Institute (GPMI). The course dove into French history and culture and explained how these pertain to the country’s laws and best practices. Cultural appreciation is tied into compliance, and the class opens with familiarizing students with behaviors in the French workplace and comparing cost of living.
“You should try to take some time to understand how people tick,” Kelsey said. “The first thing a North American would notice in a French workplace would be how very formal the environment is. When French people enter a room, they will say, ‘Messieurs, Dames.’ They are not talking to anyone in particular, they are announcing their arrival in the public space.”
In order to begin setting up payroll in France, a company must form some type of hosting entity. The simplest and most basic hosting entity is a Bureau de Liaison, which is used mainly for research and marketing to secure potential contracts.
“You can do it without a lawyer, you can do it over the internet, and you only need to register it at one place, the National Register for Enterprise and Establishments,” Kelsey explained. “It also doesn’t need to keep any formal accounts. It isn’t subject to corporation tax…disadvantages are its role in commerce in France is quite limited.”
Best practices recommend that a Bureau de Liaison should not be used for more than five years and must be registered with URSSAF, the French Social Security Authority, and obtain a SIRET number.
Kelsey goes on to cover how income tax is calculated. While income tax is considerably high (up to 45%), France’s tax system is based off family income and is very favorable towards large family units. The family’s income is totaled and divided into parts.
“The adults are one part, the first two children are half a part, and if you get to have three children that third child becomes another part, and any other children subsequent of number three are also one part,” Kelsey said. “The French tax system has for many years, since the Franco-Prussian War of 1870, particularly encouraged the production of children and that’s why the taxation benefits are so generous for family units.”
Register for the full webinar series available on demand, to learn more about French payroll, including social security, minimum wage, exemptions, and more.
Felicia DeInnocentiis is the Editorial Assistant for the American Payroll Association and for the Global Payroll Management Institute. She graduated Texas State University with a bachelor's degree in Mass Communications and Journalism.