Summary

France has a comprehensive social security system which covers health, maternity, paternity, disability and death insurance, occupational accident and illness insurance, old age pensions, family allowances and unemployment benefits.

Details

Contributions

The different elements of French social security have different earnings ceilings for the purposes of calculating contributions. For the very highly paid, this has the effect of reducing the headline percentage contribution rate. For most individuals, however, the employer contribution burden is around 40-45%, and the employee contribution rate is around 20-22%. A social security charge is also applied to investment income and capital gains.

Treaties

France has social security agreements with all European Economic Area countries and 40 non-EEA countries, including the UK, US, Canada, Japan and Brazil. Many of the agreements are with francophone former French territories. These agreements determine which country has the right the levy social security contributions and provide benefits, and prevent social security being levied twice on the same income. Most inbounds expatriates to France therefore continue to pay home country social security rather than French contributions. The agreement with the UK limits home country coverage to two years. Special rules apply to individuals working in France and other EEA countries (plus the UK) on a regular basis.

While inbounds to France are generally protected from French social security, ordinarily under the same agreements, French outbounds would remain French insured. In practice, many employers choose to arrange assignments to remove individuals from French mandatory social insurance while abroad, pay host country social security, and retain French entitlements through paying French voluntary contributions (CFE). This is a widespread cost reduction strategy.

Exemptions

For individuals coming to France from non-agreement countries, the PACTE law allows an exemption from the mandatory French basic and complementary old age pension schemes. The exemption is granted for a period of three years, renewable once (i.e. six years in practice).

Administration

There is a wide range of social security institutions in France – but contributions are collected by one – URSAAF. All employers are required to file a variety of declarations when hiring or brining in from abroad a new employee. For supplementary pensions, employees are registered with the scheme to which their employer belongs. There are separate registration procedures for employers who send individuals to France but do not have a place of business there.

Benefits

Pension benefits are determined by the number of quarters of contributions (generally, 166-172 quarters are required for a full pension) and average yearly earnings, and can be claimed at 62 years of age. The 2023 pension reforms which aimed to raise the statutory retirement age have been suspended until 2028. The full pension is payable to those over the age of 67 regardless of contributions.

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