[user5994461]

Here's the taxes on French salaries for reference.

- The company has 60k budget.

- 25% goes to employer tax (charges patronales). 45k left. That's commonly called the gross salary (salaire brut).

- 25% goes to employee tax (charges sociales). 34k left. Commonly called the net salary (salaire net)

- Employee pays income tax at the end of the year. The rate is progressive and highly variable depending on personal situation. (30k left if you're single living alone).

Tip: Generally speaking I strongly advise to avoid discussing taxes with French citizens, fact is absolutely nobody understands where money goes to or how much. The usual payslip only shows the "charges sociales" itemized as 10 to 20 lines of things.

[krstf13]

This is grossly inaccurate. What you're calling taxes, are fees that allow employee to get several benefits. Practically speaking, these are delayed salary.

They include social security, unemployment benefits, retirement benefits, training ...

When your employee is sick, they can stay at home without losing their pay, and without your company paying for it. They can seek medical treatment without risking bankruptcy.

If you have to lower you activity because business is bad, you can put in place part time unemployment, and your employees won't lose money in the process...

Also, the fees paid by the employer are often subsidised through eg tax credits, reimbursements (up to a certain amount)... So that these numbers are not only inaccurate but also totally meaningless.

[user5994461]

French has multiple words historically (impots, taxes, charges) with subtle differences in meaning. However they've not been observed strictly in a long long time. It's all money taken out of the employee pocket at the end of the day.

In English it's all translated to "tax" and rightfully so. English languages and cultures don't have subtle semantics like French does. For example everything in the UK is a tax, corporation tax, income tax, council tax, etc... (one exception being the UK national insurance).

[shard]

Same in the US. On my paycheck there are Social Security tax, Medicare tax, State disability insurance tax, State unemployment insurance tax. If it is a mandatory deduction taken out of your paycheck to fund a government project (not the best word, but can't think of the proper word at the moment), even if you get benefits later, it's called a tax.

[bgorman]

The US Government tries the same trick.

Social Security is a called an "insurance program" although it is completely unrelated to conventional insurance. The closest financial instrument is a Ponzi scheme, which is illegal under US law.

[jbn]

It is insurance in the sense that it pools the risk. The risk here is "aging" ("Social Security" in the US only covers base retirement, whereas "Social Security" in France covers 5 risks), it only happens to be a risk that realizes 100% of the time, unlike fire insurance for instance.

[krstf13]

Nope,that’s not correct. Even in English health insurance is not tax, unemployment insurance is not tax... And by the way what you call ‘charges’ is historically‘cotisations’ (fees).

[hansvm]

In my circle of acquaintances, the distinction lies not in what the money is funding (e.g. health care), but in where it's going:

Health coverage goes to some entity that isn't the government and is usually optional, so it's viewed as a benefit and taken into account when computing total compensation.

Unemployment insurance on the other hand is taken out of every paycheck and handed to the government without an opt-out. Yes, of course you get something for it; the whole point of taxes is that society gets something in return. They're still taxes.

[krstf13]

Also, you lie and move the goal posts. You really should say that you don’t wanna pay your employees. Fine by me, but be frank about it. I know I’ll be downvoted here, but the truth is this guy doesn’t want to pay his employees and pretends it’s because of additional costs that burden him. He’d rather give them more, if only they were able to spend responsibly. Yet, he doesn’t know the first thing about taxes, fees and lumps them together. I welcome disagreements, but I wish un readers were slightly more rigorous.

[hansvm]

I don't get that impression at all. The person you're replying to hasn't done anything more than try to clarify that whatever you want to call the cash being extracted by the French government, a reasonable person in other parts of the world could call it a tax and not miss any important defining characteristics.

With respect to claims of wanting to underpay employees, I don't think that's something anyone is actually arguing for when they talk about unfriendliness toward startups. The French government is levying a high _proportional_ tax to cover _fixed_ fees like health care. This can make sense at a societal level as a form of wealth redistribution, but it's a disadvantage for high earners like those in the software industry. Those employees can earn more in other countries with the same cost to their employers simply because less is taken out of their paycheck, and because the difference is more than enough to cover fixed fees like health care it's a good move for them to do so. The people being disadvantaged aren't startup employees (not passing a moral judgement -- the claim itself just seemed off).

[kelnos]

I think quibbling about terminology misses the point. If you think about it as the total cost per employee, it seems like a a lot that doesn't actually go directly to the employee as take-home pay. I think a lot of that is good, and replaces other external costs, but it's still a lot of extra money a small company will need to budget just to hire someone.

And things like tax credits are only useful if you have the cash on hand immediately, and can wait up to a year to get it back. A brand-new venture may not have that.

[xur17]

All of this is called "tax" in the US.

[athenot]

Not quite: health insurance is not called tax in the US, yet is a benefit under the French system with premiums paid by the employer.

[user5994461]

Not quite: An employer in France must provide a private health insurance plan to employees. It is paid out of the pocket of the employee and they can't refuse it.

France has good public health service but it's also pushing private health insurance down the throat of everybody through their employers, quite like the UK or the US. The large majority of the population has double coverage.

[lma21]

Charges patronales and charges sociales are not really "taxes" given your understanding of taxation.

Charges patronales and charges sociales are well explained in every payslip, i.e. where that money goes and how the employee/employer benefit from them.

Also, every person's net income tax is also explained and you can see where it goes.

At the end of the day, when a French person loses their job (even if they're a non-essential worker in any industry), they go home not worrying about a single damn thing... it's good to have such security, no?

[jbn]

You are right that Charges patronales and charges sociales are not really "taxes" , in fact some politicians (LFI and EELV come to mind) insist on calling it "socialized portion of the employee salary", which is a better description.

However doing this would cause a mind shift where the employees would realize how large a fraction of their compensation package is in fact retained by the government either in the form of taxes or in the form of charges. A positive outcome of this is that it would force this realization, since so many people think healthcare/education/pension are free...

Another aspect to this is that different corporations have been allowed to charge these Charges patronales and charges sociales at different rates (for instance nurses pay 14% for retirement, whereas the rest of the population pays 28%...). Worse an entire half of the workforce, namely all the civil servants, have no Charges patronales and charges sociales at all (in other words, the French state is a special employer that gets away with not paying for these, paying for the actual pensions out of its general budget rather than its stowed-away-for-later funds.... and when the French state goes bankrupt, it just needs to raise more taxes on the private sector employees to make payroll on its pensions!).

[kelnos]

I agree that it's great for the French worker (way better than how US workers are treated), but you have to also see how it's a disincentive for a French entrepreneur to create a new company, no?

[ldng]

It has been that way quite a few decades. Yet, people are still creating companies. So maybe it is harder than somewhere else but it is far from being the only problem you'll meet when creating a company.

[ldng]

The term "Charges" is not even legally correct. It is a way to give it a negative bias on purpose.

[jbn]

Yes. "Charges" translates to "load" or "burden" in English. Using that word makes it sound like it is only the employer that bears this burden, whereas it is very much >50% of the employee compensation package that is socialized (or mutualized, which may be a better word) towards health/unemployment/age insurance.