What’s the best social regime for an entrepreneur in France?

Social regimes

When it comes to the French social regime, one must make the difference between the Employee Regime and the Non-salaried worker regime. If you are an entrepreneur, the one you will be subject to depends on the type of your company and your position in your business (find out more here).
As such, one can wonder: what exactly are the differences between these social regimes, and is there one that is preferable to the other?
We at Companow have devised two simple tables to help you figure out which one would be best for you:

 

Summary:

  1. Contribution base
  2. Contribution rate

 

1- Contribution base (2018)

Employee regimeNon-Salaried-Worker regime

Depending on the risks, the contribution calculation base is either:

  • the remuneration paid to the manager,
  • or part of that remuneration:
    • Segment A: 0 to 3 311euros per month
    • Segment B: 3,311 to 13,244 euros per month
    • Segment C: 13 244 to 26 488 euros per month

  • If subject to Income Tax: it is the taxable activity income before:
    • the 25% increase applied to the income in the event of non-adherence to an approved management center or association, or even to a chartered accountant, an accounting firm or a management and accounting association contracted by the tax authorities,
    • possible tax breaks,
    • the deduction of optional social contributions.

For individual entrepreneurs subject to the tax regime of the conventional micro-company: the base corresponds to the turnover achieved after deduction of the standard abatement representative of expenses (except for the micro-social scheme where the base then corresponds to the turnover).

  • If subject to the Corporate Tax: net remuneration paid to the manager, plus a fraction of the dividends received
  • For the CSG and CRDS: all social security contributions (mandatory and optional) must be reinstated

 

 

2- Contribution rate

Employee regime (companies with less than 10 employees)

Manager + employee rates

Non-Salaried-Worker regime

CSG – CRDS:

  • 9.7% on 98.25% of the income
CSG – CRDS:

  • 9.7% on the taxable professional income (to which social contributions are added)

Sickness and maternity:

  • 13% one the whole income
Sickness and maternity:

  • Merchants and craftsmen
    • from 0 to 3.16% if income below 40% of PASS (2)
    • from 3.16 to 6.35% if between 40% and 110% of the Annual Ceiling of the Social Security (PASS).
    • 6.35% if income is between 110% of PASS and 5 PASS
    • + 0.85% for daily allowances up to 5 PASS
  • Liberal professions
    • 1.5% to 6.50% if income less than 110% of the PASS
    • 6.50% if income exceeds 110% of the PASS

Family allowances:

  • 3.4% if salary is inferior to 3.5 times the minimum wage
  • 2.25% otherwise

Family allowances:

  • 0% for income below 110% of the PASS
  • between 0 and 3.10% for income between 110% and 140% of the PASS,
  • 3.10% for income above 140% of the PASS

Base old-age insurance:

  • 15.45% on segment A
  • 2.30% on the whole salary

Base old-age insurance:

  • Merchants and craftsmen:
    • 17.75% within the limit of the PASS
    • 0.60% beyond the PASS
  • Liberal professions:
    • 10.1% within the limit of the PASS
    • 1.87% between 1 and 5 times the PASS

Additional old-age insurance:

  • 7.75% on segment A (arrco)
  • 20.25% on segments B and C (agirc)
  • +0.35% (exceptional and temporary contribution)

Additional old-age insurance:

  • merchants and craftsmen:
    • 7% in the limit of the PASS
    • 8% between 1 times the PASS and 4 times the PASS
  • Liberal professions: variable from 1,277 to 16,597 euros depending on income

AGFF (Association for the management of the financing fund of Agirc and Arrco):

  • 2% on segment A
  • 2.20% on segments B and C

Work accident:

  • Variable Rate depending on the activity

Provident scheme:

  • 1.5% on segment A

Provident scheme:

  • merchants and craftsmen: 1.3% on income below the PASS
  • Liberal professions: 76, 228, or 380 euros depending on the class chosen

APEC:

  • 0.06% on segments A and B

National capital for housing help (FNAL) – companies with less than 20 employees:

  •  0.1% on the whole salary
Professional formation:

  • 0.55% on the whole salary

Professional formation:

  • Merchants and liberal professions: 0.25% of the PASS
  • Craftsmen: 0.29% of the PASS