How to convert gross salary to net salary | MIA Assurances

Are you hiring your first employees in France and looking to set their level of remuneration, including all the charges you’ll have to pay?

In this article, we explain how salaries are calculated in France!

What is the difference between net and gross?

1. Work out the total cost to the employer

The amount you specify on the employment contract is the gross salary. On top of this salary, and to calculate the total cost of your hire, you will have to pay employer’s contributions.
Total cost to the employer = gross salary + employer’s contributions + gross amount of any bonuses and other types of compensation.
2. Calculate net salary before tax
The gross salary is not the amount that will be paid to your employee. A certain number of charges are deducted from the gross salary and the amount of these charges will vary according to the status of your employees (executive or non-executive). These charges, deducted from the gross salary, are funded by the employee.

Net pay before tax = gross pay – employee contributions

3. Net salary paid

Income tax is now deducted at source: that means the tax is deducted directly from salary before it is paid to the employee. The amount your employee will actually have in their pocket at the end of the month will therefore correspond to their net salary before tax less their personal tax calculated depending on their household income. This rate, which is given to the employer by the tax authorities, is shown on the pay slip.

How to calculate your employee contributions

To convert gross salary to net salary, you can use the calculator created by

What are the contributions for?

The amount of charges deducted from gross salary is significant. France is in fact the European country with the highest employer and employee contributions. These contributions are used to fund public systems: health, retirement, unemployment, family support, etc.
In case of health problems or life events, this aid supports all French people, whatever their situation. Some of these charges relate to insurance which in other countries is funded individually by the employee; the ultimate effect on purchasing power is therefore similar.

Employee contributions relate mainly to:
– Healthcare: the deduction is sent directly to URSSAF to fund the French Social Security system. Also, if you have taken out a supplementary health and/or supplementary pension plan for your employees, the premiums will be deducted directly and sent to the insurer.
– Retirement: every employee in France contributes towards their future retirement. The money is sent to one of the 35 existing pension funds.
– Unemployment managed by the French Employment Agency, Pôle emploi and family benefits managed by the CAF.

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