Employee remuneration in France: salary, bonuses and benefits
Salary is the basis of remuneration in France and must comply with a legal minimum. It can be supplemented by bonuses and benefits in kind to attract, motivate and retain employees.
In a nutshell
- Remuneration includes a base salary and supplements.
- The salary must comply with a legal or contractual minimum.
- Bonuses can be mandatory or optional.
- Benefits in kind supplement the overall remuneration package.
How to structure employee remuneration in France
Remuneration can include:
- A base salary.
- Bonuses.
- A variable component.
- Benefits in kind.
- More broadly, all elements paid or granted to the employee in exchange for work.
What is the base salary?
Remuneration constitutes the consideration for the work provided by the employee.
Minimum wage
There are several levels of minimum wage in France.
- The minimum wage (SMIC) is the legal minimum applicable to all employees.
- Collective agreements may set higher minimums.
The company may also define its own salary scales.
The statutory national minimum wage (salaire minimum interprofessionnel de croissance or SMIC) is set by law.
- It applies to the majority of private-sector employees.
- It is adjusted regularly based on inflation.
- Specific rules exist for certain groups (employees of private employers whose working hours cannot be monitored, those under 18, apprentices/work-study trainees, etc.).
For further information, consult the page dedicated to the SMIC.
- Collective agreements may impose minimum pay levels.
- The firm can define its own internal remuneration levels.
- The most favorable salary must always be applied.
What is the difference between gross and net salary?
Understanding the salary structure is essential.
- Gross salary includes all components before social security contributions.
- Net salary corresponds to the amount received before income tax.
- Contributions fund social protection.
For further information, consult the online simulator for calculating gross and net salary.
How is the salary set?
The salary is freely determined between the employer and the employee.
- It can be set in the employment contract.
- It can be defined according to customary practices or internal agreements.
- It can be calculated based on time worked, performance or a flat-rate agreement.
However, certain rules must be respected:
- Compliance with the SMIC (minimum wage) and collective agreement minimums.
- The monthly salary payment principle.
- Equal pay between women and men.
- The absence of discrimination.
Respect for gender pay equality
Pay equality is a legal obligation.
- Equal work must receive equal pay.
- All components of remuneration are concerned.
- Differences must be justified by objective criteria.
In this context, remuneration is understood as the base salary and all other benefits and accessories.
In firms with 50 or more employees, a gender equality index must be published annually based on specific indicators measuring the firm’s situation regarding pay equality between women and men. Corrective measures must be implemented if necessary.
What bonuses can be paid in France?
Bonuses supplement the base salary. There are two types: mandatory bonuses and those that are a matter of remuneration policy choice.
They are provided for in the employment contract.
- They result from a collective agreement or a customary practice.
- They can arise from a commitment by the employer.
Examples of mandatory bonuses:
- Year-end bonuses or 13th-month pay.
- Performance or productivity bonuses.
- Bonuses linked to years of service or attendance.
- Bonuses linked to specific working conditions.
They are decided freely by the employer as part of their remuneration policy.
- They may vary based on objectives or results.
- They do not constitute a mandatory element of the salary.
Bonuses provided for under a collective agreement
Find the bonuses provided for in each collective agreement on the French Digital Labor Code: Bonuses provided for by collective agreement – French Digital Labor Code
How are benefits in kind handled?
Benefits in kind supplement remuneration without a direct cash payment. They consist of goods or services provided by the employer for the employee’s personal use, whether in full or in part. They must be taken into account in the social security treatment of remuneration and must appear on the payslip.
Examples of benefits in kind:
- Meals or restaurant vouchers.
- Accommodation.
- Company cars.
- IT equipment or mobile phones.
The value of benefits in kind must appear on the employee’s payslip at their gross value. The rules for calculating and deducting contributions are applied in the same way as for other elements of remuneration.
- They are valued according to their actual value or a flat-rate value.
- A minimum value is set by regulations.
- The higher value must be used in the event of a double valuation.
If the employee contributes financially to a benefit in kind that is valued on a flat-rate basis, the employee’s financial contribution is deducted from the amount of the benefit.
Benefits are integrated into the salary to calculate the following amounts:
- Compliance with the SMIC or the minimum collective agreement wage.
- Determination of the paid leave allowance to be paid to the employee.
- Determination of the indemnity in lieu of notice and severance pay.
- Calculation of social security contributions (social security, CSG and CRDS).
- Determination of the taxable income to be declared for income tax purposes.
For further information, consult the page dedicated to benefits in kind on URSSAF website.
What are the payment methods for salaries?
The payment of wages is strictly regulated in France.
- The salary must be paid at least once a month.
- It must be paid by bank transfer if the amount exceeds €1,500 per month.
- Below this threshold, it can be paid in cash or by check.
A payslip must be provided to the employee at the time of payment.