Payroll in France 2026: contributions, income tax and payslips

In France the employer runs payroll every month: it deducts the employee's pension contributions, CSG and CRDS (about 21% of gross pay), withholds income tax at source at the rate sent by the tax administration, and pays its own contributions of roughly 40% of gross before the RGDU reduction, all reported in one monthly DSN.

Payroll in France at a glance

Social security contributions in 2026

Contributions are calculated on gross pay, some only up to the monthly social security ceiling (PMSS) of €4,005. Agirc-Arrco calls band 1 (T1) the pay up to one PASS and band 2 (T2) the pay from one to eight PASS (€4,005 to €32,040 a month).

What to watch:

• CSG and CRDS base. The 1.75% allowance (98.25% of gross) applies only up to 4 PASS, €192,240 in 2026. Employees have no unemployment contribution of their own.
• Other employer levies. The training contribution is 0.55% below 11 employees and 1% from 11, the apprenticeship tax 0.59% plus a 0.09% balance, the CPF-CDD contribution 1% on fixed-term contracts, and employers with 11 or more employees pay a versement mobilité at the local rate.
• Health top-up. Covering employees with a complémentaire santé is compulsory and the employer must fund at least half of it.
• Alsace-Moselle. Employees in the Haut-Rhin, Bas-Rhin and Moselle pay an extra 1.30% health contribution.

The RGDU: the 2026 reduction in employer contributions

In 2026 the general degressive reduction and the reduced health (7%) and family (3.45%) rates merged into a single reduction, the réduction générale dégressive unique (RGDU). The reduced rates now survive only for some zone-based and sector exemptions and certain special schemes, so most employers pay the full 13% and 5.25% and deduct the RGDU.

The RGDU applies to pay below three times the SMIC. It is gross pay multiplied by a coefficient:

• fewer than 50 employees: 0.0200 + 0.3781 × [½ × (3 × annual SMIC ÷ annual gross pay − 1)] to the power 1.75, at most 0.3981
• 50 employees or more: the same formula with 0.3821, at most 0.4021

For 2026 the SMIC in the formula is the one in force on 1 January 2026 (€1,823.03 a month for 35 hours), or equivalently 2.9293 times the SMIC of 1 June 2026. The reduction covers the employer's health, pension, family, Agirc-Arrco, FNAL, CSA and unemployment contributions and the shared part of AT/MP (0.49%). It is declared every month in the DSN and regularised either progressively or once a year, on December's contributions.

Income tax: the prélèvement à la source (PAS)

Income tax on salaries is withheld at source. The tax administration calculates an individual rate for each employee from their last tax return and sends it to the employer every month; the employer must apply a new rate within 60 days. The employee can instead ask for the household rate, or choose not to disclose their rate, in which case you apply the neutral rate, which depends only on the pay you pay. The neutral rate also applies when no rate has been sent, for example when the employee has never filed a tax return.

The withholding applies to the net taxable pay (net imposable): gross pay minus social contributions and the deductible part of the CSG. The non-deductible CSG and the CRDS therefore stay in the base.

Neutral-rate grid for mainland France from 1 May 2026 (monthly base; separate grids apply in the overseas departments):

The personalised rate comes from the annual income-tax scale. The 2026 scale, applied to 2025 income per household share, is 0% up to €11,600, 11% up to €29,579, 30% up to €84,577, 41% up to €181,917 and 45% above.

The tax withheld is declared in the DSN and paid electronically (télérèglement) to the company tax office (SIE) the month after the withholding. Employers with fewer than 11 employees can opt to pay it quarterly, by the 15th of the first month of the following quarter.

Minimum wage, working time and mandatory pay

• SMIC. €12.02 gross an hour (€1,823.03 a month for 35 hours a week) from 1 January 2026, then €12.31 an hour and €1,867.02 a month from 1 June 2026. Employees under 18 with less than six months of practice in their sector can be paid a reduced SMIC: €11.08 an hour at 17, €9.85 at 16 and under.
• Working time and overtime. The legal working time is 35 hours a week (1,607 hours a year). Without a collective agreement, overtime is paid at +25% for the 36th to 43rd hour of the week and +50% from the 44th; an agreement can set other premiums, but never below 10%. The default annual overtime quota is 220 hours per employee.
• No statutory 13th month. Bonuses such as a 13th month, a holiday bonus or a year-end bonus are compulsory only when the contract, a collective agreement, a company custom or a unilateral commitment provides them.
• Paid leave. Employees earn 2.5 working days (jours ouvrables) a month, or 30 working days (five weeks) for a full year.

Monthly payroll calendar and filings

1. 1Before each hire: send the déclaration préalable à l'embauche (DPAE) to the Urssaf before the employee starts work or the trial period, at the earliest 8 days before the hiring date.
2. 2Every month: pay the salary with a payslip, then file the monthly DSN with payroll-compatible software on net-entreprises.fr. It is due by the 15th of the following month below 50 employees, and by the 5th from 50 employees when the salary is paid in the month worked (the 15th if it is paid the following month).
3. 3Contributions: paid with the DSN on the same dates. Employers with fewer than 11 employees can opt for quarterly payment, by the 15th of the first month of the following quarter.
4. 4Events: sick leave, an early return to work and the end of a contract are reported in an event DSN within 5 working days.
5. 5Income tax at source: collected by the tax administration the month after the withholding.
6. 6December: annual regularisation of the RGDU, unless you regularise it progressively.

What a payslip must show. The clarified payslip (bulletin de paie clarifié) shows the employer's name, address, SIRET and APE code; the collective agreement; the employee's job and classification; the period and hours, with overtime and its rates; gross pay; contributions grouped under health, accidents at work, pension, family and unemployment; the total of exemptions; the total cost to the employer; the net pay before income tax; the montant net social; the net taxable pay and its year-to-date total; the tax withheld at source and its year-to-date total; and a reminder to keep the payslip with no time limit. Payslips are electronic by default unless the employee objects. Keep a copy for 5 years; the employee can challenge a payslip for 3 years.

Worked example: €3,000 a month

A non-executive employee in mainland France outside Alsace-Moselle, full-time on 35 hours, no overtime, single, no dependants, neutral rate (no personalised rate sent), employer with fewer than 50 employees, 2026:

The RGDU coefficient is 0.0200 + 0.3781 × [½ × (3 × €1,823.03 ÷ €3,000 − 1)] to the power 1.75 = 0.0999, rounded to four decimals as in the Urssaf examples. Of the €299.70, €254.46 is deducted from the Urssaf contributions and €45.24 from the Agirc-Arrco contributions (ratios 0.3380 and 0.0601 out of 0.3981). The net taxable pay of €2,460.27 falls in the €2,315 to €2,738 band of the neutral grid, hence 5.3%. With a personalised rate the tax would differ. Not included: the AT/MP rate notified by your Carsat, training and apprenticeship levies, the versement mobilité, and the complémentaire santé and prévoyance contributions.

Common mistakes

1. 1Still applying the 7% health and 3.45% family rates in 2026 alongside the RGDU; outside a few specific exemptions they now sit inside the RGDU.
2. 2Using the wrong SMIC in the RGDU: the formula takes three times the SMIC of 1 January 2026, or 2.9293 times the SMIC of 1 June 2026.
3. 3Calculating CSG and CRDS on 100% of gross pay instead of 98.25%, which applies up to 4 PASS.
4. 4Applying the PAS to net pay instead of the net taxable pay, or not applying a new rate within 60 days.
5. 5Missing the 5th or 15th DSN deadline, or forgetting the event DSN within 5 working days of sick leave or the end of a contract.
6. 6Hiring without a DPAE before the first day of work.
7. 7Forgetting the CET once pay exceeds the €4,005 ceiling, and the T2 rates above it.

How Clientlly helps

Clientlly ships a built-in payroll profile for France: the income-tax bands and allowance as modelled, the employee and employer contribution rates, the contribution ceilings and the minimum wage, checked against official sources in October 2026. It calculates gross to net and the employer contributions, produces payslips, and supports recurring payroll adjustments and imports of employees and payroll data; an administrator can adjust the rates in the payroll tax settings.

The French profile approximates the official formulas, the RGDU and the income-tax withholding included, so check the result against the rate sent by the tax administration and the official Urssaf simulator. It models one employee in a primary job, single, without dependants, at national level, so the AT/MP rate, training levies, the versement mobilité, collective agreements and personal circumstances must be checked separately.

Alongside payroll, the human resources module handles leave requests and approvals with a leave calendar and HR documents, and attendance and time tracking records working hours and overtime. To close the books after the payroll run, see our month-end close checklist.