An employee receives in return for his work or a service, a salary. This is the gross salary. He will have to pay contributions which will be deducted directly from his salary. The amount he will actually receive is the net salary.

That is to say : Gross salary less contributions = net salary.

To be more precise, here is how the gross salary is calculated:

The gross salary is the number of hours worked multiplied by the hourly rate. You must also add any overtime, bonuses or commissions that are set freely by the employer.

Contributions

Employee contributions are the deductions made from the salary and which will make it possible to finance social benefits:

  • Unemployment
  • Retirement
  • Complementary pension
  • Health, maternity and death insurance
  • Family allowances
  • Work accident
  • Pension Insurance
  • Training contribution
  • Health coverage
  • Accommodation
  • Poverty

Each employee pays these contributions: worker, employee or manager. By adding them, they represent approximately 23 to 25% of the salary. The company also pays these same contributions on its side, it is the employer's share. The employer's contributions are due by all companies whether industrial, craft, agricultural or liberal. The employer pays these 2 shares to the URSSAF.

This method of calculation is also valid for part-time employees. They will pay the same contributions, but in proportion to their working hours.

As you can see, this calculation is quite complex, because it will depend on the type of company in which you are employed and your status.

net salary

The net salary represents the gross salary deducted from the contributions. Then, you will have to deduct the income tax again. The exact sum that will be paid to you is then called the net salary to be paid.

In summary, the gross salary is the salary before taxes and the net salary is that obtained once all the charges have been subtracted.

Public service

Contributions from civil servants are much lower. They represent approximately 15% of the amount of the gross salary (instead of 23 to 25% in the private sector).

And for apprentices?

The salary of an apprentice is different from that of an employee. Indeed, he receives remuneration according to his age and his seniority within the company. He receives a percentage of the SMIC.

Young people under 26 and on an apprenticeship contract will not pay contributions. The gross salary will then be equal to the net salary.

If the gross salary of the apprentice is higher than 79% of the SMIC, the contributions will be due only on the part which exceeds this 79%.

For internship contracts

Many young people are employed on internships and are remunerated not by a salary, but by what is called an internship gratuity. This is also exempt from contributions if it does not exceed the Social Security deductible. Beyond that, he will pay certain contributions.

Let's not forget our retirees

We also speak of gross pension and net pension for retirees since they also contribute and are subject to the following social security contributions:

  • The CSG (Generalized Social Contribution)
  • The CRDS (Contribution for the Reimbursement of the Social Debt)
  • CASA (Additional Solidarity Contribution for Autonomy)

This represents about 10% depending on the job you held: worker, employee or executive.

The gross pension minus the contributions becomes the net pension. This is the actual amount that you will collect in your bank account.

The gross and net salary of executives

When you have executive status, the amount of contributions is higher than for a worker or employee. It is indeed necessary to add these few notions:

  • The percentage deducted for pensions is higher
  • A contribution to the APEC (Association for the Employment of Executives)
  • A CET contribution (Exceptional and Temporary Contribution)

Thus, for executives, the difference between the gross salary and the net salary is higher than for other employees with another status.

This small, very clear table explains to you in a few figures and in a concrete way the difference between the gross salary and the net salary of different professional categories. It will be useful for a better understanding:

 

Category Wage costs Monthly gross remuneration Monthly net remuneration
Setting 25% €1 €1
Non-executive 23% €1 €1
Liberal 27% €1 €1
Public function 15% €1 €1