The French Prime Minister has set out plans for reducing wage costs for businesses in addition to the CICE tax credit that has already been introduced. The CICE tax credit has provided relief through a credit of 6 percent of gross payroll for salaries below or equal to 2.5 times the minimum wage.
A further pledge to lower the costs of labor for businesses was made at the beginning of 2014, and the Prime Minister has now announced plans to scrap the employer’s contribution for workers on the minimum wage, with effect from 1 January 2015. In addition to this there are plans to reduce family contributions by 1.8 percent for workers earning up to 3.5 times the minimum wage with effect from 1 January 2016. The family contribution would also be reduced by more than 3 percent for the self-employed and artisans, effective from 2015.
Beyond this, there are also plans to reduce tax for lower income workers by a further EUR 5 billion by 2017, commencing with the reduction of social contributions of minimum wage employees with effect from 1 January 2015.
