Mandatory Social Contributions in France
As an employer in France, you are required to subscribe to various mandatory social insurances for your employees. Specifically, this involves collective contracts for 'retraite' (pension), 'prévoyance' (disability insurance), and 'mutuelle' (health insurance).
Retraite
The French pension system consists of two mandatory contributions:
- Basic Pension: Contributions are paid to the URSSAF, the agency responsible for collecting social contributions.
- Supplementary Pension: Employees contribute monthly to the AGIRC-ARRCO, a system that operates on a points-based system. The final pension amount depends on the number of points accumulated throughout the career.
In addition to these mandatory schemes, employers may choose to establish an extra pension plan ('retraite surcomplémentaire') at the company level, often in the form of a savings plan with a financial institution.
Prévoyance
The 'prévoyance' insurance provides financial protection in case of long-term illness, disability, or death of the employee. The premium for this insurance is calculated based on the employee's salary. In the case of long-term illness, this insurance supports the employer in continuing to pay the salary, depending on the terms of the contract. In case of disability, the employee typically receives a periodic benefit, and in the event of death, a lump sum is paid to the survivors.
Mutuelle
It is mandatory for French employers to offer a 'mutuelle,' an extended health insurance plan that goes beyond the basic coverage. This insurance reimburses, among other things, the costs of doctor visits, hospital stays, dental care, and optics. The premium is calculated as a percentage of the Plafond Mensuel de la Sécurité Sociale (PMSS), which is set at €3,925 in 2025.
To subscribe to these insurances, you need to consult the relevant collective labor agreement, as it may contain specific minimum requirements and distributions of premium costs between the employer and employee. While the collective labor agreement may prescribe minimum guarantees, employers are free to offer more favourable terms than those legally required.
For proper implementation and compliance with these obligations, it is advisable to seek professional advice to ensure both your company and your employees are optimally protected. Our Payroll Insurance Consultancy team is ready to assist you!
It is no coincidence that France is often cited as one of the countries with the most complex payroll systems.
Read more about this in the article, France tops the list of countries with the most complex payroll.