Social security contributions in detail
Both employers and employees must pay social security contributions. Contributions are paid on a monthly basis and the overall rate depends on the type of business that the organisation carries out, its size, the employees’ position within the organisation and their remuneration (approximately from 12.6% to 47% for the employer’s contribution and from 20% to 23% for the employee’s contribution). At the median monthly salary level (EUR 3,000), the employer’s contribution totals approximately 40% of the monthly salary and the employee’s part is around 22%.
Social security contributions correspond to the coverage of major life risks, including illness, old age, death, maternity, disability, family allowances, work-related accidents and occupational illnesses, and unemployment. There is no overall cap, but some types of contributions are capped (e.g. unemployment and old age).
Note that specific rates apply in some areas of the country (e.g. Alsace-Moselle). Some rates vary depending on the amount the employee earns (e.g. family allowances). An overall reduction of the employer’s social contributions applies if the employee is paid less than 160% of the national minimum wage.
Author: Capstan Avocats
Date: April 2020
Note: All currency conversions into EUR were made on 1 February 2019, using a mid-market rate.