Total taxes

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NigelS
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Total taxes

Post by NigelS »

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
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Post by martyn94 »

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 And even then I got paid for doing it, and I’m about 30 years out of date.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
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Post by martyn94 »

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
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Pension

Post by NigelS »

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
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Re: Pension

Post by martyn94 »


Allan
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Post by Allan »

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.
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Post by Florence »

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
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Post by martyn94 »


martyn94
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Post by martyn94 »

[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
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Post by tia »

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
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Post by martyn94 »

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.
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