Social security contributions are one of the biggest expenses to be faced when running a business in France, whether on a self-employed basis or as the owner of a company employing staff.
Social security contributions (cotisations sociales or charges sociales) for the self-employed and those running a business are calculated as a percentage of his/her taxable income (i.e. the business results or their actual salary or drawings) plus the amount of ‘optional social benefits’ paid for by the business. These may include private pension plans and death and incapacity insurance plans, as well as any complementary health insurance. Contributions are paid to the relevant fund or funds, each of which has its own payment schedule.
Compulsory social security contributions for the self-employed fall into three main categories: health insurance, family allowances and pension. In addition, you must make contributions to the social security debt, known as CRDS and CSG.
In addition to the above compulsory contributions, you may make the following contributions :
- Death and Incapacity Insurance : Private death and incapacity insurance (prévoyance) for the self-employed includes provisions for paying compensation to keep a business running while the owner is unable to run it himself.
- Complementary Health Insurance : Commonly known as a mutuelle, this insurance covers the portion of medical bills not reimbursed by compulsory state health insurance.
- Unemployment Insurance : A form of private unemployment insurance is available to those who aren’t covered by the state unemployment insurance organisation, (ASSEDIC which includes most self-employed people). This insurance pays a daily compensation when the business owner is unemployed (i.e. when the business goes bust).
The two main agencies with whom you will come into contact are the Régime Social des Travailleurs Indépendants (RSI) and the Union de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales (URSSAF).
The Régime Social des Travailleurs Indépendants (RSI) was formed in 2006 and brings together three insurance funds previously responsible for the providing insurance cover for health, invalidity, maternity and pensions to the self employed. You will pay most of your social security insurance premiums to this insurance fund, who will also be responsible for making your health, invalidity, maternity and pension payments.
The other agency you will come into contact with will be the Union de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales (URSAFF). The URSSAF is the main social security conbritutions collections agency, who remain responsible for the calculation and recovery of certain social security contributions.
Please note that writers and translators pay reduced contributions, provided they’re registered with one of the two organisations that manage their contributions: the Association pour la Gestion de la Sécurité Sociale des Auteurs (Agessa) or the Maison des Artistes.
Social security contributions for your employees
If you employ full-time staff, you must make social security contributions for your employees. Also, you must complete the necessary formalities to ensure that your employees are covered by social security. You must report your intended engagement of an employee to URSSAF up to a week before he’s due to start work, using a document unique d’embauche. This document serves as registration for all the relevant social security funds as the purpose of this present section is to provide general information for those who had just set up their business and therefore who have likely no employees).
If you employ someone to undertake work for you, you should ensure that he has adequate insurance (e.g. accident and third party liability) or is registered as self-employed and, therefore, making social security contributions himself.