So how does a chèque emploi work?
Chèque Emploi Service Universel (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 euros (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 cesu.urssaf.fr (simulation section).
Let say you employ a cleaner 3 hours a week at 10 euros/hour. The cheque you write at the end of the month will come to about 120 euros. Another 78 euros will be taken from your bank account for social charges, and you will benefit from a tax credit of 99 euros. The employee will pay about 35 eurosfor 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 euros 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 euros 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.