Flight of talent, less attractive salaries: the “over-taxation” of qualified workers is weighing down the French economy, according to a study – 01/13/2025 at 5:15 p.m.

According to the specialized institute Rexecode, France stands out for the high level and strong progressiveness of deductions from remuneration beyond 1.4 SMIC. This trend reduces the supply of qualified labor by making its remuneration less attractive for employees.

A very French “surplus tax”. In a report published Monday, January 13, the liberal-inspired Rexecode Institute of Economic Studies highlights the effects of taxes and levies on skilled work in France, which are higher than other major European economies, and which could become even heavier. in 2025.

This study was carried out with the Syntec federation, which represents more than 3,000 digital, engineering, consulting and training groups. According to the results of the paper,

salaries between 1.4 and 4 SMIC are thus subject in France to additional deductions of “six to 15 percentage points” compared to neighboring countries.

At the minimum wage level,

the annual cost of the salary amounts to 23,000 euros in France compared to 31,000 euros in Germany and the disposable income (net of taxes) for the employee is 19,000 euros in France compared to 18,000 in Germany,

according to the study. However, at three minimum wages, the cost for the employer is 91,000 euros in France and Germany, but the disposable income for the employee is 43,000 euros in France compared to 46,000 across the Rhine.

The level of social coverage does not explain everything

“Even by correcting differences in social coverage (social insurance and deferred income benefits sometimes more extensive in France), qualified work remains clearly penalized in France,” points out the Syntec federation in a press release accompanying the study. “This French overtaxation is only partly justified by higher social benefits (retirement, sickness and unemployment),” states the study. “After adjusting for these differences in social coverage, the comparison between France and the four other countries continues to highlight an overtaxation of qualified work,” adds the report.

The high level of withdrawals causes a

“relocation of qualified jobs” and a “flight of talents to countries where net income is higher for equivalent work”,

continues the employers' organization, which estimates the additional cost for the companies it represents at 7.9 billion euros, “or 11.9 points of the payroll”.

Before the Barnier government's censure of the budget, parliamentarians had agreed to reduce certain reductions in employer contributions, following the report submitted to the government by economists Antoine Bozio and Etienne Wasmer, which had highlighted the difficulties in increasing the low wages due to the increase in taxes and social security contributions that their increase entails.

The Syntec federation estimates that “a removal of reductions in charges on qualified employment as envisaged within the framework of the PLFSS (Social Security finance bill) 2025 currently being developed would cost several hundred million of additional euros the payroll of companies” in its sectors. Conversely, “a reduction in the cost of qualified labor, aligning it with our European neighbors, would have many favorable effects: the long-term economic gain would be of the order of 0.4 points of GDP and nearly 100,000 jobs,” estimates the organization.