Learn About Social Security Contributions in Western Europe

By Ius Laboris November 14, 2019
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​Social security contributions are as varied in western Europe as in the Americas and eastern Europe. This article provides guidance to employers and workers on social security contributions in western Europe.

Belgium

A distinction must be made between white-collar and blue-collar employees in Belgium.

For white-collar employees, the amount employers pay in social security contributions is about 27 percent of the employee's gross salary, while the amount the employee pays is 13.07 percent of his or her gross salary. No salary cap applies.

For blue-collar employees, the amount employers pay is about 43 percent of 108 percent of the employee's gross salary, while the amount employees pay is 13.07 percent of 108 percent of his or her gross salary. The 43 percent includes a contribution for holiday pay amounting to 10.27 percent of 108 percent of the employee's gross salary for the preceding year, which the employer also pays. No salary cap applies.

Note that employees with low salaries can benefit from reduced personal contributions—called the "work bonus." Employers may also qualify for a reduction in contributions, based on certain criteria, such as for employing young workers.

Social security contributions are made by withholding the employee's contributions each month, and by paying both the employer's and employee's contributions to the National Office for Social Security quarterly—at the latest on April 30, July 31, Oct. 31 and Jan. 31. An employer must pay an advance in most cases.

Social security covers payments for health insurance, incapacity benefits, unemployment benefits, pensions and to support the minor children of all the nation's adults, whether they're working or not, and regardless of their income.

France

Employers and employees must pay social security contributions in France. Contributions are paid monthly, and the rate depends on the type of business that the organization carries out, its size, the employees' positions within the organization and their remuneration. The employer contribution averages about 12.6 percent to 47 percent and the employee from about 20 percent to 23 percent. At the median monthly salary level of 3,000 euros—approximately $3,314—the employer's contribution totals about 40 percent and the employee's part is around 22 percent.

Social contributions cover "major life risks," including illness, old age, death, maternity, disability, work-related accidents and occupational illnesses, and unemployment. There is no overall cap, but some contributions are capped, such as for unemployment and old age.

Specific rates apply in some areas of the country, such as Alsace-Moselle. An employer can reduce its social security contributions if an employee is paid less than 160 percent of the national minimum wage.

Italy

The basic rate for employers' contributions in Italy is 23.81 percent, while the rate for employees is 9.19 percent for 2019 for employees who started working after Dec. 31, 1995. These rates apply to blue-collar workers in industrial enterprises with a workforce between 15 and 50 employees, but other rates apply to employees in other categories and sectors.

Rates may also vary based on the type of contract the employee has, such as for a fixed-term or indefinite-term employment contract.

Social security is paid with each salary payment. It covers retirement, disability and death. In addition to the basic rates, there are further rates—again for blue-collar workers—that cover unemployment benefits, a mandatory employment termination payment, illness, maternity and the state-funded financial assistance provided when companies need to lay off employees.

For 2019, employers can get social security contribution discounts for hiring certain types of workers on indefinite-term contracts. These types of workers include young people, women, people with disabilities, refugees and people whose annual income is under a defined threshold.

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UK

For the tax year 2019-20, the contribution in the United Kingdom (U.K.) is as follows: For employees on pay and benefits that are readily convertible into cash, such as listed shares between 8,632 pounds and 50,000 pounds—approximately $11,067 and $64,092—the contribution is 12 percent—and on cash earnings and readily convertible benefits exceeding 50,000 pounds, the contribution is 2 percent uncapped. For employers the contribution is 13.8 percent on earnings exceeding 8,632 pounds uncapped.

Both employees' and employers' contributions on pay and readily convertible benefits must generally be paid within 14 days of the end of the tax month, which runs from the sixth of the first month to the fifth of the following month. Employer contributions on fringe benefits must generally be paid by July 19 following the end of the tax year. The contributions cover state pension, unemployment benefits, maternity allowance, bereavement benefits and incapacity benefits.

Ius Laboris is a leading international employment law practice combining prominent employment, labor and pension firms. This article does not include an overview of all the countries of western Europe but focuses on those nations with Ius Laboris offices that contributed to this piece. Contributing members to this article include: Jean-Paul Lacomble, an attorney with Claeys & Engels in Liѐge, Belgium; Guillaume Bordier, an attorney with Capstan Avocats in Paris; Emanuela Nespoli, an attorney with Toffoletto De Luca Tamajo e Soci in Milan; and Kayleigh Williams, a trainee solicitor with Lewis Silkin in London. 

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