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Here's the taxes on French salaries for reference. - The company has 60k budget. - 25% goes to employer tax (charges patronales). 45k left. That's commonly ca

Here's the taxes on French salaries for reference. - The company has 60k budget. - 25% goes to employer tax (charges patronales). 45k left. That's commonly called the gross salary (salaire brut). - 25% goes to employee tax (charges sociales). 34k left. Commonly called the net salary (salaire net) - Employee pays income tax at the end of the year. The rate is progressive and highly variable depending on personal situation. (30k left if you're single living alone). Tip: Generally speaking I strongly advise to avoid discussing taxes with French citizens, fact is absolutely nobody understands where money goes to or how much. The usual payslip only shows the "charges sociales" itemized as 10 to 20 lines of things.

krstf13 6y ago
This is grossly inaccurate. What you're calling taxes, are fees that allow employee to get several benefits. Practically speaking, these are delayed salary. They include social security, unemployment benefits, retirement benefits, training ... When your employee is sick, they can stay at home without losing their pay, and without your company paying for it. They can seek medical treatment without risking bankruptcy. If you have to lower you activity because business is bad, you can put in place part time unemployment, and your employees won't lose money in the process... Also, the fees paid by the employer are often subsidised through eg tax credits, reimbursements (up to a certain amount)... So that these numbers are not only inaccurate but also totally meaningless.
- user5994461 6y ago
  French has multiple words historically (impots, taxes, charges) with subtle differences in meaning. However they've not been observed strictly in a long long time. It's all money taken out of the employee pocket at the end of the day. In English it's all translated to "tax" and rightfully so. English languages and cultures don't have subtle semantics like French does. For example everything in the UK is a tax, corporation tax, income tax, council tax, etc... (one exception being the UK national insurance).
  - shard 6y ago
    Same in the US. On my paycheck there are Social Security tax, Medicare tax, State disability insurance tax, State unemployment insurance tax. If it is a mandatory deduction taken out of your paycheck to fund a government project (not the best word, but can't think of the proper word at the moment), even if you get benefits later, it's called a tax.
    - bgorman 6y ago
      The US Government tries the same trick. Social Security is a called an "insurance program" although it is completely unrelated to conventional insurance. The closest financial instrument is a Ponzi scheme, which is illegal under US law.
      - jbn 6y ago
        It is insurance in the sense that it pools the risk. The risk here is "aging" ("Social Security" in the US only covers base retirement, whereas "Social Security" in France covers 5 risks), it only happens to be a risk that realizes 100% of the time, unlike fire insurance for instance.
  - krstf13 6y ago
    Nope,that’s not correct. Even in English health insurance is not tax, unemployment insurance is not tax... And by the way what you call ‘charges’ is historically‘cotisations’ (fees).
    - hansvm 6y ago
      In my circle of acquaintances, the distinction lies not in what the money is funding (e.g. health care), but in where it's going: Health coverage goes to some entity that isn't the government and is usually optional, so it's viewed as a benefit and taken into account when computing total compensation. Unemployment insurance on the other hand is taken out of every paycheck and handed to the government without an opt-out. Yes, of course you get something for it; the whole point of taxes is that society gets something in return. They're still taxes.
- xur17 6y ago
  All of this is called "tax" in the US.
  - athenot 6y ago
    Not quite: health insurance is not called tax in the US, yet is a benefit under the French system with premiums paid by the employer.
    - user5994461 6y ago
      Not quite: An employer in France must provide a private health insurance plan to employees. It is paid out of the pocket of the employee and they can't refuse it. France has good public health service but it's also pushing private health insurance down the throat of everybody through their employers, quite like the UK or the US. The large majority of the population has double coverage.
- kelnos 6y ago
  I think quibbling about terminology misses the point. If you think about it as the total cost per employee, it seems like a a lot that doesn't actually go directly to the employee as take-home pay. I think a lot of that is good, and replaces other external costs, but it's still a lot of extra money a small company will need to budget just to hire someone. And things like tax credits are only useful if you have the cash on hand immediately, and can wait up to a year to get it back. A brand-new venture may not have that.
lma21 6y ago
Charges patronales and charges sociales are not really "taxes" given your understanding of taxation. Charges patronales and charges sociales are well explained in every payslip, i.e. where that money goes and how the employee/employer benefit from them. Also, every person's net income tax is also explained and you can see where it goes. At the end of the day, when a French person loses their job (even if they're a non-essential worker in any industry), they go home not worrying about a single damn thing... it's good to have such security, no?
- kelnos 6y ago
  I agree that it's great for the French worker (way better than how US workers are treated), but you have to also see how it's a disincentive for a French entrepreneur to create a new company, no?
  - ldng 6y ago
    It has been that way quite a few decades. Yet, people are still creating companies. So maybe it is harder than somewhere else but it is far from being the only problem you'll meet when creating a company.
- ldng 6y ago
  The term "Charges" is not even legally correct. It is a way to give it a negative bias on purpose.
  - jbn 6y ago
    Yes. "Charges" translates to "load" or "burden" in English. Using that word makes it sound like it is only the employer that bears this burden, whereas it is very much >50% of the employee compensation package that is socialized (or mutualized, which may be a better word) towards health/unemployment/age insurance.
- jbn 6y ago
  You are right that Charges patronales and charges sociales are not really "taxes" , in fact some politicians (LFI and EELV come to mind) insist on calling it "socialized portion of the employee salary", which is a better description. However doing this would cause a mind shift where the employees would realize how large a fraction of their compensation package is in fact retained by the government either in the form of taxes or in the form of charges. A positive outcome of this is that it would force this realization, since so many people think healthcare/education/pension are free... Another aspect to this is that different corporations have been allowed to charge these Charges patronales and charges sociales at different rates (for instance nurses pay 14% for retirement, whereas the rest of the population pays 28%...). Worse an entire half of the workforce, namely all the civil servants, have no Charges patronales and charges sociales at all (in other words, the French state is a special employer that gets away with not paying for these, paying for the actual pensions out of its general budget rather than its stowed-away-for-later funds.... and when the French state goes bankrupt, it just needs to raise more taxes on the private sector employees to make payroll on its pensions!).

krstf13 6y ago

This is grossly inaccurate. What you're calling taxes, are fees that allow employee to get several benefits. Practically speaking, these are delayed salary. They include social security, unemployment benefits, retirement benefits, training ... When your employee is sick, they can stay at home without losing their pay, and without your company paying for it. They can seek medical treatment without risking bankruptcy. If you have to lower you activity because business is bad, you can put in place part time unemployment, and your employees won't lose money in the process... Also, the fees paid by the employer are often subsidised through eg tax credits, reimbursements (up to a certain amount)... So that these numbers are not only inaccurate but also totally meaningless.

user5994461 6y ago
French has multiple words historically (impots, taxes, charges) with subtle differences in meaning. However they've not been observed strictly in a long long time. It's all money taken out of the employee pocket at the end of the day. In English it's all translated to "tax" and rightfully so. English languages and cultures don't have subtle semantics like French does. For example everything in the UK is a tax, corporation tax, income tax, council tax, etc... (one exception being the UK national insurance).
- shard 6y ago
  Same in the US. On my paycheck there are Social Security tax, Medicare tax, State disability insurance tax, State unemployment insurance tax. If it is a mandatory deduction taken out of your paycheck to fund a government project (not the best word, but can't think of the proper word at the moment), even if you get benefits later, it's called a tax.
  - bgorman 6y ago
    The US Government tries the same trick. Social Security is a called an "insurance program" although it is completely unrelated to conventional insurance. The closest financial instrument is a Ponzi scheme, which is illegal under US law.
    - jbn 6y ago
      It is insurance in the sense that it pools the risk. The risk here is "aging" ("Social Security" in the US only covers base retirement, whereas "Social Security" in France covers 5 risks), it only happens to be a risk that realizes 100% of the time, unlike fire insurance for instance.
- krstf13 6y ago
  Nope,that’s not correct. Even in English health insurance is not tax, unemployment insurance is not tax... And by the way what you call ‘charges’ is historically‘cotisations’ (fees).
  - hansvm 6y ago
    In my circle of acquaintances, the distinction lies not in what the money is funding (e.g. health care), but in where it's going: Health coverage goes to some entity that isn't the government and is usually optional, so it's viewed as a benefit and taken into account when computing total compensation. Unemployment insurance on the other hand is taken out of every paycheck and handed to the government without an opt-out. Yes, of course you get something for it; the whole point of taxes is that society gets something in return. They're still taxes.
xur17 6y ago
All of this is called "tax" in the US.
- athenot 6y ago
  Not quite: health insurance is not called tax in the US, yet is a benefit under the French system with premiums paid by the employer.
  - user5994461 6y ago
    Not quite: An employer in France must provide a private health insurance plan to employees. It is paid out of the pocket of the employee and they can't refuse it. France has good public health service but it's also pushing private health insurance down the throat of everybody through their employers, quite like the UK or the US. The large majority of the population has double coverage.
kelnos 6y ago
I think quibbling about terminology misses the point. If you think about it as the total cost per employee, it seems like a a lot that doesn't actually go directly to the employee as take-home pay. I think a lot of that is good, and replaces other external costs, but it's still a lot of extra money a small company will need to budget just to hire someone. And things like tax credits are only useful if you have the cash on hand immediately, and can wait up to a year to get it back. A brand-new venture may not have that.

lma21 6y ago

Charges patronales and charges sociales are not really "taxes" given your understanding of taxation. Charges patronales and charges sociales are well explained in every payslip, i.e. where that money goes and how the employee/employer benefit from them. Also, every person's net income tax is also explained and you can see where it goes. At the end of the day, when a French person loses their job (even if they're a non-essential worker in any industry), they go home not worrying about a single damn thing... it's good to have such security, no?

kelnos 6y ago
I agree that it's great for the French worker (way better than how US workers are treated), but you have to also see how it's a disincentive for a French entrepreneur to create a new company, no?
- ldng 6y ago
  It has been that way quite a few decades. Yet, people are still creating companies. So maybe it is harder than somewhere else but it is far from being the only problem you'll meet when creating a company.
ldng 6y ago
The term "Charges" is not even legally correct. It is a way to give it a negative bias on purpose.
- jbn 6y ago
  Yes. "Charges" translates to "load" or "burden" in English. Using that word makes it sound like it is only the employer that bears this burden, whereas it is very much >50% of the employee compensation package that is socialized (or mutualized, which may be a better word) towards health/unemployment/age insurance.
jbn 6y ago
You are right that Charges patronales and charges sociales are not really "taxes" , in fact some politicians (LFI and EELV come to mind) insist on calling it "socialized portion of the employee salary", which is a better description. However doing this would cause a mind shift where the employees would realize how large a fraction of their compensation package is in fact retained by the government either in the form of taxes or in the form of charges. A positive outcome of this is that it would force this realization, since so many people think healthcare/education/pension are free... Another aspect to this is that different corporations have been allowed to charge these Charges patronales and charges sociales at different rates (for instance nurses pay 14% for retirement, whereas the rest of the population pays 28%...). Worse an entire half of the workforce, namely all the civil servants, have no Charges patronales and charges sociales at all (in other words, the French state is a special employer that gets away with not paying for these, paying for the actual pensions out of its general budget rather than its stowed-away-for-later funds.... and when the French state goes bankrupt, it just needs to raise more taxes on the private sector employees to make payroll on its pensions!).