Wednesday August 13, 2008
How to use chèque emploi in France
Do you want to employ someone a few hours a week to do your cleaning, gardening or to give you French lessons? If so Chèque Emploi Service Universel –CESU – is the easiest way to legally employ someone without too many formalities.
If you are planning to start a business with services activities delivered at your customers’ home, such as private lessons, cleaning, gardening, child minder or handyman, this could also be a legal way to test your market. CESU enables a private individual to pay someone he or she employs directly for various tasks at their home. There is no need for a work contract or monthly payslips, the system will calculate the social charges for you. You could also benefit from an income tax credit if you are registered to the French income tax.
So how does a chèque emploi work?
CESU provides the employee with health insurance as well as points for their retirement plan. As the employer, you are covered if the employee had an accident at work.
If the person you plan to employ is interested, ask your bank for a CESU bancaire form. You will get a cheque book with which to pay the employee the net amount agreed and a section to send to the national CESU centre who deals with the social contributions. The required social taxes will be taken directly from your bank account and a certificate will be sent to the employee.
You have to agree the wage with the worker, which must be above the national minimum hourly rate of 7.38€ (net). Don’t forget to plan another 40% extra for the employer’s social charges, charges patronales, when agreeing the hourly rate, or you will have a bad surprise when the contributions are drawn from your bank account! You can calculate the employer’s and employee’s social contribution on www.cesu.urssaf.fr (simulation section).
Let say you employ a cleaner 3 hours a week at 10€/hour. The cheque you write at the end of the month will come to about 120€. Another 78€ will be taken from you bank account for social charges, and you will benefit from a tax credit of 99€. The employee will pay about 35€ for his own social charges (charges salariales).
When using CESU, you also benefit from tax credits or “crédit d’impôts” available for home services, which can account for half of the money you spend on paying the worker, up to a total limit of 12,000€ a year. Check the cesu website for details as the crédit d’impôts limit vary from one activity to the other; for instance gardening is limited to 3,000€ per year.
CESU was initially created to pay someone who works on an occasional basis for no more than 8 hours a week. Various activities are more restricted as to not create unfair competition to artisans (e.g. a handyman).
If you plan on starting a gardening or private lesson business, this is a great step stone towards creating your company without taking any risks. Your activity is fully legal, so you can advertise, pay your taxes according to your activity level and assess whether or not you have enough work to keep you busy all year long.
By Valerie Lemiere
Professional business adviser
