Hire Employees in France: All You Need to Know

France is fast becoming one of Europe’s most attractive talent markets. 

From aerospace engineers in Toulouse to fintech developers in Paris, the country offers deep regional expertise, generous R&D credits, and a highly educated workforce: nearly half of young professionals hold a university degree.  

But hiring in France isn’t simple. The labor laws are strict. A single misstep: misclassifying a contractor, issuing the wrong contract type, or mishandling a termination, can result in fines, audits, and litigation. And if you’re thinking of setting up a local entity, expect a €25,000+ bill and timelines stretching past six months.

That’s why many companies use an Employer of Record (EOR) to hire employees in France quickly and compliantly, without opening a legal entity.

This guide breaks down both options: entity vs. EOR, so you can choose the right path based on speed, risk, and long-term hiring goals. 

Explore how Tarmack’s EOR solution works in France 

Hiring in France: Your Legal Options

To hire employees in France, you have two legal paths: set up a local entity or partner with an Employer of Record (EOR). 

Here’s how the entity route works, and when it makes sense.   

Set up a local entity

Setting up a local entity is the right path if you’re planning to build a long-term presence or hire a sizable team (say 15+) in France. You’ve full control over hiring, payroll, and HR policies, but it also comes with significant legal and administrative overhead.

Here’s what the setup process include:

• Choose a business structure, usually an SAS (a flexible joint-stock company favored by startups and global companies) or SARL (a more rigid but simpler limited liability company), to define your company’s legal and operational framework.
  
• Register with the French Commercial Court to incorporate.
• Get a SIRET number from INSEE. This unique ID is used for tax and admin tracking.
• Register with URSSAF to declare yourself as an employer and handle social security declarations and contributions.
• Open a French bank account, secure a local office address, appoint a director, and hire an accountant to handle tax filings.

The setup process typically takes 3 to 6 months, with costs ranging from €15,000 to €30,000 depending on structure, legal support, and translation needs. Banking delays or trouble with leasing, or director appointments, are common.

The compliance burden doesn’t end there. You’ll need to follow France’s strict labor code and any Collective Bargaining Agreements (CBAs), sector-specific rules that often define minimum salaries, working hours, sick leave, and bonuses. 

If your team grows beyond 11 employees, you must also set up a Social and Economic Committee (CSE), a formal employee representative body.

Use an EOR in France

An EOR offers a faster, lower-risk way to hire employees in France without establishing a legal entity. 

It becomes the legal employer on paper: managing payroll, taxes, benefits, and compliance with French labor law. You maintain operational control over the employee’s work, while EOR handles all administrative and legal responsibilities.

Here’s how it works with a partner like Tarmack:

• You identify and select the candidate
• Tarmack hires them under its own entity and issues a compliant French employment contract 
• From there, we manage monthly payroll, statutory benefits (including health insurance and pensions), income tax withholding, and mandatory filings like DSN (a monthly social declaration) and DPAE (a pre-employment notice you must submit before an employee starts), right from day one.

This model is particularly useful if you’re hiring a small number of employees, testing the French market, or needing to onboard employees in days rather than months. It mitigates classification risk by ensuring that your French hire is fully compliant with labor regulations from day one. 

Wondering how other companies use EORs to scale globally? Here are the top 10 reasons leading teams choose this model.

Down the line, if you want to establish your own French entity, EOR like Tarmack also help you transition employees onto your local payroll without breaching employment continuity. 

What You Need to Know About French Employment Contracts 

In France, every hire must have a written French-language contract.   

The contract must follow the French Labor Code (Code du Travail), and in most industries, also adhere to sector-specific CBAs. It should clearly outline role, compensation, weekly work hours, paid leave, and probation and termination terms.   

Types of employment contracts

France has several employment contract types, but not all are interchangeable. Each has specific legal use cases:

1. CDI (Contrat à Durée Indéterminée)

This is the standard permanent contract with no end date. It offers the highest legal protection and is preferred by most employees.Use it unless you have a clear, short-term need.

2. CDD (Contrat à Durée Déterminée)

Use a CDD only when you have a specific, temporary requirement, like backfilling a parental leave or managing a seasonal surge. French law strictly limits how long and how often you can renew a CDD.

3. Internships & Apprenticeships

These contracts are ideal for building a future talent pipeline. But it must be tied to an educational program, specific duration, and meet the required legal compensation.

4. Temporary/Agency Contracts

Go this route when you need short-term help through a staffing agency. It’s suitable for urgent or stopgap roles, but make sure the agency handles compliance.

French Employment Contracts: What You Need to Get Right Even with an EOR or local legal help, these are non-negotiables if you’re hiring in France: Use French: Contracts must be written in French. This is a legal requirement, not a translation preference. Include the right CBA: It sets the minimums for salary, leave, and bonuses.  Define work hours clearly: The 35-hour standard or a “forfait jours” setup for managers. This impacts overtime, leave, and cost. Include a probation period (upfront): You can’t add it later. Miss one of these, and you risk penalties, back pay claims, or labor disputes.

Working hours and overtime

Unlike the US, UK, or India, where extended hours are often informal or compensated later, France mandates precise limits on how long employees can work and when they must rest. 

If you don’t meet those rules, it could cost you in fines, employee disputes, or trigger labor inspections.

French employees’ working hour and overtime rules:

Category	Details
Legal Full-Time Workweek	35 hours (standard for full-time roles)
Max Weekly Hours	48 hours (60 hrs max under exceptional circumstances)
Daily Rest	11 consecutive hours off per 24-hour period
Weekly Rest	24 consecutive hours off (usually Sunday), plus the daily rest
Overtime Pay	+25% for hours 36–43, 50% for hours beyond

For senior roles, you can opt for a “forfait jours” arrangement. This lets employees work a set number of 218 days per year without hourly tracking. It’s popular for managers, executives, and knowledge workers.

Probation periods, notice, and termination

In France, you must include probation periods (période d’essai) in the contract upfront. These are subject to strict duration limits depending on role type. You have to follow a formal process to terminate an employee, and pay severance in most cases of dismissal.

Role Type	Max Probation Period	Max w/ Renewal	Notice (After 1 Yr)	Minimum Severance
Regular Employees	2 months	4 months	~1 month	¼ month per year of service
Technicians	3 months	6 months	~1–2 months	¼ to ⅓ month/year of service
Managers/Executives	4 months	8 months	2–3 months	⅓ month/year beyond 10 years

Tip: If you want flexibility and legal clarity, consider a rupture conventionnelle, a mutual separation that must be validated by labor authorities. It’s clean, predictable, and reduces the risk of disputes.

Navigating the Payroll in France 

Hiring in France means managing a highly regulated, paperwork heavy payroll system, whether you’re a French entity or working through an EOR. 

Compliance isn’t optional. Penalties, invalid contracts, and denied benefits are real risks if you miss a step.

Step 1: Register the employee with DPAE     

Before an employee can legally start work, you must file a Déclaration Préalable à l’Embauche (DPAE) with URSSAF. In layman terms, an official notice to the French government that you’re about to employ someone.

You must submit it to URSSAF at least one working day before your employee’s start date. It will activate  social security, occupational health coverage, and labor inspections.

Miss the deadline? You risk a €450 fine per employee, and the possible invalidation of the contract. 

If you’re a foreign employer without a French entity, you have two choices:

• Appoint a local representative in France and register with URSSAF for foreign employers (centre national des firmes étrangères), or 

• Use an EOR who files DPAE on your behalf.

Managing payroll across borders? Here’s how to pay international employees compliantly.

Step 2: Register for occupational health check

Every new employee must undergo a medical visit (visite d’information et de prévention) within 3 months of starting. 

As the employer, you’re responsible for registering the employee with an authorized occupational health provider and covering the cost. 

If you fail to register on time, you risk administrative fines and potential liability if a health issue arises later. In some cases, it can also invalidate the employment relationship or delay onboarding audits tied to DSN and URSSAF reporting.

Tip: Partner with an EOR, they’ll handle this for you.. If you’re hiring directly, line up a provider as soon as the contract is signed.

Step 3: Run monthly payroll (and file a DSN) 

France mandates monthly payroll filings, and payslip compliance is taken seriously.  So transmit a digital report known as the Déclaration Sociale Nominative (DSN).

Requirement	Details
Payroll frequency	Monthly (legally required)
Payslip format	Must include gross/net pay, hours worked, contributions, leave, etc.
Payslip delivery	Digital or paper; must be accessible for 5 years
DSN reporting	Submitted monthly to URSSAF; integrates tax/social declarations
Payment of contributions	Monthly or quarterly (depending on the size of the workforce)

Best Practice: Run a monthly DSN audit to catch reporting errors early. Mistakes in social declarations can lead to URSSAF penalties or denied benefits for your employee.

How income tax withholding works

Since 2019, France uses a pay-as-you-earn (PAYE) model known as Prélèvement à la Source. You’re required to:

• Withhold income tax directly from salaries, based on a personalized rate from the French tax authority
• Apply a default rate if no rate is available
• Update rates automatically when the employee updates their profile on impots.gouv.fr.

Social security contributions

France has one of the highest payroll tax burdens in the Organization for Economic Co-operation and Development (OECD). Here’s where the money goes:.

Contribution Type	Employer Share	Employee Share	Notes
Social Security (base)	~25%	~15%	Includes sickness, maternity, disability
Pension (basic + top-up)	~15–18%	~11%	Includes general and Agirc-Arrco schemes
Unemployment (Pôle Emploi)	~4.05%	—	Only employers contribute
Family Benefits	~3.45%	—	URSSAF-managed
Work Injury & Illness	Varies (0.9–7%)	—	Based on sector risk
Total (approximate)	~45%	~22%	Based on gross salary; varies slightly

These contributions fund France employee benefits: healthcare, pensions, unemployment insurance, and family allowances. 

Say you hire a software engineer at a gross salary of €70,000. By the time you factor in employer social contributions, your real cost is closer to €101,500.

That’s an extra €31,500 in mandatory charges, before benefits or bonuses.

Note: The exact breakdown may vary depending on industry, employee status, and applicable CBAs.

Total Cost of Employment and Benefits in France 

Hiring in France comes with a high total employment cost (TEC), largely due to statutory social contributions and mandatory benefits. As an employer,  expect to spend an additional ~45% on top of gross salary for each hire.

Total cost of employment breakdown

Cost Component	Approximate % of Gross Salary
Employer social contributions	40–47%
Mandatory insurance (mutuelle)	~1–2%
Meal vouchers, transport, other	~2–4%
Total Employer Burden	~45%

This means, a mid-level developer in Paris earning €4,500/month will cost you closer to €6,500/month once taxes and benefits are factored in. In secondary cities like Lyon, Toulouse, or Marseille, you can expect to pay 10–15% less. 

Sample salary benchmarks (Paris, 2024)

Role	Monthly Gross Salary (2024 Avg)
Minimum Wage (SMIC)	€1,766 (approx.)
Software Developer (mid)	€3,500–€5,000
Finance Manager	€5,500–€8,000
Customer Support Rep	€2,200–€2,800

Common mandatory benefits

In France, salary isn’t the only cost. Under most CBAs, you’ll also be expected to provide a set of employee benefits, some required by law, others simply market standard, such as:

Paid time off:

• 25 paid vacation days + 11 public holidays
• Sick leave (usually 50% paid by Social Security, with CBA top-ups up to 100% for seniority)

Parental leave:

• Maternity: 16–26 weeks
• Paternity: 25 days
• Parental: Up to 3 years (job-protected)

13th-Month Bonus: 

• Not legally required, but common under CBAs in banking, insurance, and tech.

Meal Vouchers (Tickets Restaurant):  

• You cover 50–60% in most CBAs.

Transport Reimbursement

• You must reimburse 50% of public transport commuting costs.

Mandatory Health Insurance (Mutuelle):

• Group health plan with minimum coverage (100% hospitalization, dental/vision options).
• You must cover at least 50% of the cost; the rest is deducted from the employee’s pay.

Disability, Death, and Critical Illness (Prévoyance):

• Legally required for managers, and often extended to all employees
• Fully funded by the employer

Best Practice: Always verify which CBA applies before making an offer. It governs most benefit entitlements.

Work Visa & Immigration Requirements

If you’re hiring talent from outside the EU/EEA/Switzerland, you must sponsor a work visa before employment begins.

Common Work Visa Types

Permit Type	Who It’s For	Validity
Talent Passport	Skilled workers earning €38,475+ per year (2024), incl. tech and R&D roles	4 years, renewable
EU Blue Card	Higher earners (€53,836+), typically in tech, engineering	1–4 years
Employee Permit	General work permit for local hires	12–24 months

The sponsorship process includes:

• Submitting a work permit request to DREETS (formerly DIRECCTE)
• Helping the employee apply for a long-stay visa (VLS-TS)
• Handling post-arrival steps (visa validation, health check, OFII registration)

If you’re hiring local French talent or EU citizens, you can skip this process entirely.

The entire process takes over 6–12 weeks and costs you €1,500–€3,000+ (if using an immigration lawyer).

Fun Fact: When using an Employer of Record (EOR), these immigration steps and risks are typically handled by the provider, so you’re legally compliant from day one.

Want a deeper dive? Read our complete guide to EOR services for global employers.

EOR vs Entity: What’s Right for You?

By now, you’ve seen how both hiring routes work. But which one is right for you?

It depends on how fast you need to hire, how many people you plan to onboard, and how much legal responsibility you’re ready to take on.

Here’s a quick comparison to help you decide:

Criteria	Employer of Record (EOR)	Set Up a French Entity
Time to hire	Days	3–6 months
Setup costs	Minimal	€15,000–€30,000
Control over contracts	Limited	Full
Legal responsibility	Shared with EOR	Fully yours
Compliance complexity	Handled by EOR	High (labor law + CBAs)
Best for	<15 hires, testing the market	15+ hires, long-term presence

Planning to scale quickly? Use EOR first, then transition.

Many companies start with an EOR to enter France quickly, then switch to their own entity once they hit scale. The key is managing this transition without breaking the employee relationship.

Done right, it preserves tenure, benefits, and compliance history.

Tarmack supports this process end-to-end. From initial hiring through to entity setup and compliant handover, so you can scale in France without disruption.

Frequently Asked Questions (FAQs)

Can a US company legally hire someone in France?

Yes, but you can’t do it informally. You must either set up a registered French entity or work with an Employer of Record (EOR) that becomes the legal employer on your behalf. Hiring without proper structure can trigger tax, labor, and immigration violations.

How much does it cost to hire in France?

The total cost of employment is typically 45–50% higher than gross salary due to employer social contributions and mandatory benefits. For example, hiring someone at €60,000/year may cost you €85,000–€90,000 annually once all contributions and benefits are included.

What is the best way to pay employees in France?

You must run local payroll in euros, provide compliant payslips, and withhold taxes via France’s “prélèvement à la source” system. Using an EOR is the simplest way to stay compliant with DSN filings, URSSAF contributions, and tax deductions. 

What are employer taxes in France?

Employers contribute to social security (~25%), pensions (~15–18%), unemployment (~4%), family benefits (~3.45%), and work accident insurance (varies). Altogether, this adds up to ~45% of gross salary.

Can I hire French freelancers legally?

Yes, but be cautious. If you control the freelancer’s schedule, tools, or working methods, or if they work exclusively for you, they may be reclassified as an employee under French law. Misclassification carries financial penalties and back pay obligations. If in doubt, consider an EOR.

Is the 13th-month bonus mandatory in France?

No, the 13th-month bonus is not mandated by French law. However, it is a common practice and may be required under certain collective bargaining agreements (CBAs) or stipulated in individual employment contracts. If your industry’s CBA includes a 13th-month bonus, or if it’s specified in an employee’s contract, you are obligated to provide it.

Can I transition from an EOR to a local entity later?

Yes, transitioning from an Employer of Record (EOR) to your own French entity is a common progression as businesses expand.

This process involves a legal transfer known as “novation,” which shifts the employment relationship from the EOR to your company without interrupting the employee’s tenure or benefits.