Lower social charges in France from January 2018

The French government announced on 23rd August 2017, that they will be eliminating health and unemployment insurance contributions from January 2018 for people that are employees and self-employed.

This will represent a reduction in social security contributions of 3.15%. The measure will be implemented in two stages: a first reduction in contributions will be implemented on 1 January 2018 and another one in the autumn of 2018. It will be financed by an increase in the CSG (contributions sociale generalisée) of 1.7%, which will come into effect on 1 January 2018.

So how will this affect your net monthly income?

As an example, an employee earning the minimum wage (SMIC), will find themselves with 260 euros net extra per year. Someone earning a gross salary of 3000 euros per month pays approximately 20 euros in health insurance contributions, and 70 euros in unemployment insurance. A gain of around 90 euros per month, minus the 1.7% increase in CSG.

It still remains to be seen how this will affect ‘fonctionnaires’ (civil servants), who don’t pay health and unemployment contributions anyway, and who will be affected by the rise in CSG.

As for retired people, anyone with a net pension of 1200 per month will pay the 1.7% increase in CSG.

Find further information on social security contributions in France.