Total taxes

Banking, insurance, currency exchange, taxation, prices.

Moderator: Moderators

Post Reply
NigelS
Rank 3
Rank 3
Posts: 52
Joined: Thu 02 Jul 2015 14:27
Contact:

Total taxes

Post by NigelS » Wed 01 Nov 2017 12:37

we are exploring working self-employed in France and a friend has told us that to have 20K euros per year for living expenses after all taxes (income/local/national/housing/health) we would need to earn 50K euros per year. To be left with 35K euros after tax we would need to earn 110K euros per year.
Are these figures broadly correct in your view / experience?

martyn94
Rank 5
Rank 5
Posts: 2086
Joined: Sun 14 Apr 2013 14:37

Post by martyn94 » Wed 01 Nov 2017 14:31

Shortly, it’s not quite as bad as that, though taxes and charges can be high here, depending on your circumstances. But they can be quite generous if you have a lowish income, and/or lots of kids (the state can pay you “allocationsâ€￾, a bit like child benefit or housing benefit, but usually better, as well as charging you), and a bit more so if you are married.

€110,000 gross for €35,000 net seems quite exaggerated unless you are leaving out the business expenses you would have anywhere (like a van and diesel and tools and materials, or an internet connection, or however you make your living), or knocking off a lot more before you get to your net figure. If you are really just talking about cash spending money, €35,000 a year is not a bad screw (at least by my standards): it would go quite a long way down here.

If you want to know the true position you need to either do your own research (you are the only person here who knows your age, business, marital status, family size, likely location, potential income, shoe size or anything else that might be relevant), or take advice from someone competent and pay for it.

I used to do this sort of thing for a living, many many years ago. But I never thought I knew enough about it to do it on anything more than an “on averageâ€￾ basis. And even then I got paid for doing it, and I’m about 30 years out of date. So my best advice is that “it all dependsâ€￾.

Other people here may have more up-to-date ideas. But you will need to remember that their circumstances are not going to be yours. To take a random example, the local property taxes here can vary quite widely from one place to the next.
Last edited by martyn94 on Wed 01 Nov 2017 22:30, edited 1 time in total.

martyn94
Rank 5
Rank 5
Posts: 2086
Joined: Sun 14 Apr 2013 14:37

Post by martyn94 » Wed 01 Nov 2017 22:26

One extra point is that you can get a semi-decent pension here from your compulsory contributions if you are young enough to contribute for long enough, though many people pay extra to top it up in one way or another.

NigelS
Rank 3
Rank 3
Posts: 52
Joined: Thu 02 Jul 2015 14:27
Contact:

Pension

Post by NigelS » Thu 02 Nov 2017 11:05

Thanks Martyn. On the social security/state pension side, how many years do you need to contribute to it to get something (meaningful) out?

martyn94
Rank 5
Rank 5
Posts: 2086
Joined: Sun 14 Apr 2013 14:37

Re: Pension

Post by martyn94 » Thu 02 Nov 2017 16:31

NigelS wrote:Thanks Martyn. On the social security/state pension side, how many years do you need to contribute to it to get something (meaningful) out?
Don’t ask me:I’ve never worked here. But it depends (a bit like the UK) on how many quarters (trimestres) you have paid contributions for. But unlike the UK you get (simplifying a bit) 50% of your pre-retirement income if you have a full record. Which is better than it sounds given what you save by being retired. You need 166 quarters to get the full rate, otherwise it’s scaled down. If you already have contributions in the UK you will get a UK state pension too (also scaled down). And any UK private pension you have built up.

One thing I knew, but hadn’t fully appreciated, is that the French system makes the UK one look simple (which is quite an achievement). For example people of different status (employees, management, self-employed etc) pay into different schemes with slightly different rules. For example they may have “complementaryâ€￾ contributions which get you more pension and may or not be compulsory. As a wild generalisation, retired people here with a decent record are pretty well off (perhaps more so than when working) even if they only paid the compulsory contributions (and not unreasonably, given how much you pay).

I don’t normally go in for promotion, but there is an outfit here called The Connexion which publishes a magazine in English for Brits here, but also “Help Guidesâ€￾ on various topics which seem to be helpful and accurate so far as I have seen them and know enough to judge. You can get them on paper or online.

There is one on pensions here

https://www.connexionfrance.com/Help-Gu ... 7-36-pages

Allan
Rank 5
Rank 5
Posts: 1379
Joined: Tue 01 Sep 2009 21:21
Contact:

Post by Allan » Thu 02 Nov 2017 17:28

I have to say, I don’t understand the French pension system. I make substantial payments to CIPAV for a pension and I believe I could take now whatever pension they pay.

It seems that because I have other income then I will have to keep paying CIPAV, irrespective of whether I draw the pension or not. But if I do draw the pension then my contributions afterwards would not count towards my pension.

As my contributions exceed whatever I am likely to get back then I just regard it as the price I pay for living here.

To me this seems iniquitous but my French friends say it is down to solidarity.

Florence
Rank 3
Rank 3
Posts: 72
Joined: Fri 13 May 2016 18:40
Contact:

Post by Florence » Thu 02 Nov 2017 18:12

Pension is OK if you were salaried, but for self-employed you need to take out some form of private pension as my son has. Our garagist has made his business a "sarl" and employed himself. My husband & I have worked the same amount of years here, he, self-employed gets about a third of what I do, I was salaried.

martyn94
Rank 5
Rank 5
Posts: 2086
Joined: Sun 14 Apr 2013 14:37

Post by martyn94 » Thu 02 Nov 2017 21:45

Allan wrote:I have to say, I don’t understand the French pension system. I make substantial payments to CIPAV for a pension and I believe I could take now whatever pension they pay.

It seems that because I have other income then I will have to keep paying CIPAV, irrespective of whether I draw the pension or not. But if I do draw the pension then my contributions afterwards would not count towards my pension.

As my contributions exceed whatever I am likely to get back then I just regard it as the price I pay for living here.

To me this seems iniquitous but my French friends say it is down to solidarity.
Up to a point, Lord Copper. I spent nearly 40 years in the UK paying “earnings-relatedâ€￾ NI contributions to get an NI pension (very basic)
which isn’t earnings-related at all. I don’t complain: that’s how it worked, and it was certainly solidarity.

The French system, by contrast, mostly gives you a return which bears some relation to what you’ve put in. And indeed boring middle-class people like most of us do very well out of it. We mostly don’t smoke, or drink too much, or get too fat, and accordingly live almost for ever. In actuarial terms, we live off the backs of the proles who retire at 65 and die at 68.

How that relates to your issues with CIPAV is another matter: as I warned NigelS, the French system is insanely complicated (and insanely full of unintelligible acronyms). But I suspect that his affairs might prove a bit less complicated than yours, though I’m only guessing.

martyn94
Rank 5
Rank 5
Posts: 2086
Joined: Sun 14 Apr 2013 14:37

Post by martyn94 » Fri 03 Nov 2017 13:08

[quote="Allanâ€￾]

As my contributions exceed whatever I am likely to get back then I just regard it as the price I pay for living here.

To me this seems iniquitous but my French friends say it is down to solidarity.[/quote]

If you don’t draw your pension, and keep paying, you would normally expect a higher eventual pension, as I think you’ve implied? The trade-off depends, obviously, on when you plan to die. But the trade-off, in actuarial terms, is often pretty good, especially if you are in a demographic group which tends to outlive your cohort. Getting a bomb-proof index-linked increase to your income costs the earth nowadays from anyone but the Sécu.

In my case, I could buy back a couple of missing years in my NI contribution record and get a higher (and “triple-lockedâ€￾) NI pension. The up-front cost is higher than it used to be, but probably still a good deal for me. The sums are sufficiently small that I am not in a hurry, but I should remember to do it before the time-limits run out.

tia
Rank 5
Rank 5
Posts: 363
Joined: Mon 17 May 2010 19:06
Contact:

Post by tia » Fri 03 Nov 2017 20:33

Err sorry but French friends say it is solidarity ? No it isn't . The only French people that say that are the ones that have cushy fonctionnaire jobs with decent pensions. The ones that are having to work in hard physical jobs ( and often retiring up to 10 years later than a Fonctionnaire pen pusher and with a lower pension) do not agree at all with this.
Neighbour was a fisherman, just got his pension papers through. He is entitled to 600 euros a month. Not sure how that works out as being better off than working. A lot of pensioners in France are on very low incomes. My farrier retired and now has to work on the black as he cannot live on 500 euros a month.

martyn94
Rank 5
Rank 5
Posts: 2086
Joined: Sun 14 Apr 2013 14:37

Post by martyn94 » Fri 03 Nov 2017 20:53

tia wrote:Err sorry but French friends say it is solidarity ? No it isn't . The only French people that say that are the ones that have cushy fonctionnaire jobs with decent pensions. The ones that are having to work in hard physical jobs ( and often retiring up to 10 years later than a Fonctionnaire pen pusher and with a lower pension) do not agree at all with this.
Neighbour was a fisherman, just got his pension papers through. He is entitled to 600 euros a month. Not sure how that works out as being better off than working. A lot of pensioners in France are on very low incomes. My farrier retired and now has to work on the black as he cannot live on 500 euros a month.
It depends to a large degree on what you’ve earned, and owned up to earning, during your working life. I don’t know about farriers, but I did have a small professional experience with fishermen (in the UK). The income they declared for tax purposes was ludicrously fictional. And if your ultimate pension depends on what you’ve owned up to, as it does in France, it’ll come back to haunt you.

If there were just no fish to catch, you chose the wrong career.

Post Reply