Learn how the cost of employment in France is calculated.
One of the first questions international companies ask when hiring in France is simple: “How much will this employee really cost us per month?”
In France, the total cost of employment is not only the net salary you promise. It is a combination of gross salary, employer social contributions, mandatory benefits and payroll-related administration. If you budget using only net salary, you will almost always underestimate.
This article gives a practical overview of the cost of employment in France, how it is built, what changes depending on the role and contract, and how using an Employer of Record (EOR) in France like Freeteam helps you forecast and hire with cost clarity without opening a local entity too early.
French compensation is often discussed using three different numbers.
This is what the employee receives after:
International companies often start here because net feels intuitive. But net salary is not a good base to budget from.
Gross salary is the contractual reference in France. Employee social contributions are deducted from gross to produce net.
Most job offers and employment contracts are structured around gross salary, plus variable pay if relevant.
The total employer cost is typically:
Gross salary + employer social contributions + benefits + fees and administration
This is the number that matters for:
In France, employer social contributions can represent a significant additional cost, which is why total employer cost can feel higher than in some other markets.
Employer contributions fund the French social model: healthcare, pensions, unemployment insurance and more.
The exact rates vary depending on:
You do not need to memorise the rates. The important point is budgeting realism: gross salary is not the total cost.
Employee contributions are withheld from gross salary to produce net pay.
This sometimes surprises candidates and international HR teams because:
From an employer’s perspective, this does not add cost directly, but it matters in discussions with candidates. In France, compensation conversations often involve explaining gross vs net clearly.
Income tax is typically withheld from salary and remitted to authorities via payroll.
This does not change employer cost directly, but it adds operational requirements and reporting, which is one reason companies prefer payroll outsourcing or an EOR for early-stage hiring in France.
With an Employer of Record in France, you can employ local talent compliantly while keeping your organisation lean.
Beyond salary and social contributions, French employment generally includes:
Some benefits are legally required, others are sector standard, and some are company policy.
If the role includes:
You need to factor in how these are treated under French rules and payroll, since variable compensation can affect contribution calculations.
In addition to payroll, international companies often forget:
These are not France-specific payroll costs, but they affect the real cost of running a French employee.
If you want a pragmatic approach:
This gives you a realistic total cost view and prevents the classic mistake of under-budgeting.
Many international companies use an EOR in France because the model gives you:
A good EOR will provide a costing view that includes:
That means finance can approve the hire with a clear understanding of all-in cost, not just salary.
If you hire directly, your teams need to build or buy:
With EOR, these are already built into the model. You pay a service fee, but you avoid building internal complexity for a small team.
If France is still a market test:
This is why EOR is often the preferred structure for early expansion: it converts fixed setup cost into a manageable operating cost.
Hiring is not only about budgeting. It is also about employer credibility.
A transparent cost and salary conversation helps you:
This matters because senior French candidates often have strong expectations around structure and clarity. Being vague on cost breakdown can make your offer feel risky, even if the salary is competitive.
The cost of employment in France can feel high if you compare net salary to total employer cost. But the system is predictable once you understand the components:
For international companies, the simplest way to gain cost clarity early is often to work with an Employer of Record in France like Freeteam. It allows you to hire quickly, stay compliant, and get a clear monthly all-in cost view, without opening a local entity before France has proven itself as a long-term market.
Discover the benefits of using an employer of record in France to hire employees compliantly, run payroll locally and avoid creating a French entity.
More detailsLearn how to hire French talent to test the French market using an employer of record, and validate demand without opening a local entity too early.
More detailsUnderstand HR compliance in France, from contracts and payroll to GDPR and termination, and how an employer of record helps you hire compliantly.
More details