How to calculate the cost of an employee?

This simple question touches upon a complicated area that can be quite tricky to calculate exactly and furthermore, unless your accountant is actually performing the service of bulletin de paie, he is unlikely to know exactly all the rates and ceilings unless you give him an exact amount and an exact status of the employee (e.g. cadre, non-cadre).

To give you a simple rule of thumb for an average salary (i.e. more than the SMIC but not a lot more thant Tranche A of the S.S.), then you can work it out like this;

GROSS= 100

NETT = 78

COTISATION PATRONALE = approx. 45-50% i.e. between 45 and 50

so the cost to the company is about 45-50% of the Brut and the cost to the employee is about 22% of the brut

Round it all up into a working example with realistic amounts;

• Notional monthly wage 2500 €
• Employee will get 1950 € nett upon which he pays Impots sur le Revenu
• Employer will pay 2500 brut + 1125 cotisations patronales for a total expense of 3625 €

ALL of the 3625 is tax deductible for the company and then any profit left to be distributed to the owner(s) either through Impots sur le Revenu (similar as per an employee) or through Dividends (15%-33.3% taxation according to amount)

I disagree with comments that it costs the double. If however the company owner is also the employed person then in that case there is a tendency to count their company contribution along with their personal and then to reason from the nett rather than brut but that is a little disingenuous. In the example above, you could for argument's sakes say that the 3625€ that the company had to pay also had to be earned by the employee and therefore, having only earned received 1950 you see a factor of almost 2 - however as said, that is a disingenuous calculation

The company could of course always encumber itself with ADDITIONAL charges like mutuelle, retraite complémentaire, etc. but they are not legally required.