Being an entrepreneur in France: What’s my social protection?

Social protection in France

The social protection of managers depends on two things: the legal structure of the business, and their place within it.

Summary:

  1. The “Employee” social security regime
  2. The “Independent” Social security regime (RSI):
  3. Comparing the two

 

The “Employee” social security regime

The ones who are concerned by this regime are:

  • Minority managers” or “equalitarian managers” SARL.
    This refers to managers who hold 50% of the shares of the company or less (this includes the shares held by their spouse, minor children, or partner bound by a PACS). Managers who hold strictly more than 50% of the shares are called “majority managers”.
    If the company has multiple managers, all of them are considered to be majority managers as long as they have more than 50% of the shares combined.
  • The presidents and general managers of Public Limited Companies (SA).
  • The presidents of Single-member companies (SAS).
    These managers are regarded as “employees” because they enjoy the same social protection as employees, except for unemployment insurance.
    They also cannot use their status as managers to benefit from the arrangements of labor law (for example the rules applicable to dismissal, collective agreement, minimum remuneration etc.).
  • The leaders of Cooperative companies (Scop)
    In a Scop, all the cooperating associates, including the executive corporate managers, have the status of employee (including in regard to unemployment insurance).

Learn more about all these company types here

The “Independent” Social security regime (RSI)

It is also called the “Non-salaried worker” regime (TNS).

It mainly concerns:

  • Individual entrepreneurs (including micro-entrepreneurs),
  • The majority manager(s) of an SARL
  • The sole associate of an EURL

Learn more about all these company types here

 

Comparison of the scheme of assimilated employees and self-employed

The “Employee” social security regimeThe “Independent” Social security regime (RSI)
Compulsory memberships:

  • Health and maternity insurance, family allowances, work accidents, old age (basic): affiliation and payment of employer and employee contributions by the company to the Urssaf.
  • Complementary pension: affliction with a pension fund of executives
  • Provident scheme, etc.

 

Compulsory memberships:

  • Health and maternity insurance, work accidents, old age (basic): affiliation to the Independent Social Security Regime
  • Family allocation: affiliation to:
    • The Ursaff for liberal professions
    • Social security for independents, and for merchants and artisans
  • Retirement-Disability-Death: Affiliation with an old-age pension fund that is either:
    • social security for the self-employed for tradesmen and craftsmen,
    • CNAVPL for certain liberal professions
Unemployment insurance:

  • No unemployment insurance coverage
    Except in certain situations, and only on the part of their remuneration corresponding to a technical work contract, distinct from the social mandate, and subject to the recognition of this employment contract by the French Employment center (Pôle Emploi).
  • Possible to subscribe to optional insurance
Unemployment insurance:

  • No unemployment insurance coverage
  • Possible to get optional insurance in a group insurance contract with:
    • The Social Guarantee of Business Managers (GSC)
    • The Association for the Protection of Independent Leaders (APPI)
    • April Insurance
Contribution base:

  • 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
  • For the CSG and the CRDS: the base corresponds to 98.25% of the remuneration.
Contribution base:

  • 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-enterprise: 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
Minimum contribution:

  • No minimum contribution to pay
Minimum contribution:

  • There are minimum contributions to pay if there is no profit or if there is a deficit
Employer and employee contribution rate (companies with less than 10 employees)

 

  • CSG-CRDS: 9.2% on 98.25% of salary
  • Sickness-maternity: 13% on the total salary
  • Family allowances:
    • 5.25% on the totality of the remuneration
    • The rate of 3.45% (applying to earnings below 3.5 times the minimum wage) concerns only companies falling within the scope of the Fillon reduction.
    • Salaried employees not contributing to unemployment insurance are not concerned.
  • Vocational training: 0.55% on the total salary
  • Basic old-age insurance:
    • 15.45% on segment A
    • 2.30% on segment B
  • The retirement of executives:
    • 7.75% on segment A
    • 20.55% on segments B and C
  • + Contribution of 0.35% on segments A, B, C
  • AGFF (Association for the management of the Agirc and Arrco financing fund):
    • 15.45% on segment A
    • 2.30% on segments B and C
  • Pensions: 1.5% on segment A
  • Work accidents: variable according to the risk of the company.
  • Housing assistance: 0.10% within the ceiling of the SS.
  • APEC : 0.06% on the portion of salary between tranche A and tranche B
Rate:

  • CSG-CRDS: 9.2% of the total activity income.
  • Sickness-maternity:
    • from 0.85 to 2.20% if income less than 40% of the Pass,
    • 2.20% and 7.20% if income between 40% and 110% of the Pass
    • 7.20% if income exceeds 110% of the PASS (Annual Ceiling of the Social Security)
  • Daily allowances: 0,85% within the limit of 5 times the Pass (artisans and traders only).
  • Family allowances:
    • 0% for income below 110% of the Pass.
    • between 0 and 2.15% for income between 110% and 140% of the Pass.
    • 3.10% for income above 140% of the Pass.
    • Professional training: 0.25% (or 0.29% for craftsmen) of the Pass.
  • Basic old-age insurance:
    • Traders and craftsmen: 17.75% within the limit of the Pass, and 0.6% beyond 1 Pass
    • Liberal professions: 10.1% within the limit of 1 Pass and 1.87% between 1 and 5 times the PASS.
  • Additional old-age insurance:
    • Traders and craftsmen: 0.7% within the limit of 1 PASS, 0.8% for the income range between 1 and 4 times the PASS.
    • Liberal professions: variable from € 1,277 to € 16,597 depending on income.
  • Pensions:
    • Traders and craftsmen: 1.30% within the limits of the PASS,
    • Professions: 76, 228 or 380 euros depending on the class chosen.

 

Total cost for the company

  • Employer payroll taxes represent about 40% of gross executive compensation and 52% of net compensation.
    The employer and employee charges represent globally:

    • 80% of the net remuneration paid to the officer,
    • or 62% of his gross remuneration (40% of employer contributions and 22% of employee contributions).

 

 

Total cost for the company:

  • Social security contributions represent 45% of the total amount of the net remuneration paid to the executive officer or the amount of the profit (for an individual entrepreneur).

 

Social Security

  • Hospitalization: 80%
  • High Risk: Total Reimbursement
  • Small risks: 70 – 65 – 60 – 30 – 15%
  • Daily sickness-maternity benefits capped
  • Accidents at work: Total coverage + higher benefits
  • Supplementary pension of executive (if remuneration with the ceiling)
  • Family allowances

 

Social Security

  • Hospitalization: 80%
  • High Risk: Total Reimbursement
  • Small risks: 70 – 65 – 60 – 30 – 15%
  • Daily allowances in case of hospitalization, illness or accident (for traders and craftsmen only).

Rest allowance and lump sum daily allowance in case of maternity (subject to minimum income conditions)

  • No accident insurance
  • Basic and Compulsory Supplementary Retirement
  • Family allowances