When you move to France, often the plan is to set up a little business. You create it in the husband’s name and the wife helps him out a bit and looks after the home and family. One of the major issues to take into consideration is the wife’s status. It is often neglected and the consequences are greater than expected. When setting up the business, you imagine that everyone will be comfortable with the income generated by this future booming activity. However what you have not taken into consideration is the status of the non-working spouse. You do not think about the other person’s security, his/her future in the case of divorce, death or invalidity of the person or partner and his/her situation at retirement age.

A conjoint salarié (conjointe salariée) is an employee of the spouse’s business.
This covers the wife, husband or civil partner. This person should be given an official written work contract, which indicates the number of working hours, the role, and the wage to be received (taking into consideration that there exists a minimum wage in France and he or she cannot be paid less than 8.44 euros an hour (7/2007) and that you must declare realistic hours to be worked). It is advisable to register this contract at your local tax office to avoid any conflict with the social organisations.
As an employee, you have all the advantages and security of an employee. A fixed wage and holidays, contributions to your pension, rights to social security cover i.e. sick cover, maternity leave, up to three year leave to bring up your child, unemployment benefits, training etc. It is not for nothing that all French want to be employed.

If you have set up a EURL, SARL or SA (i.e. subject to company tax -IS), the salary can be completely deductible (as long as the sum is realistic for the role undertaken).

If you have set up an Entreprise Individuelle or an EURL subject to Income tax - IR, you can deduct the salary -
1. Completely if you are married with a contract that separates your estates or if you are under another regime and you inscribe to a Centre de Gestion Agrée

or 2. If the salary does not exceed the annual limit of 13800 euros and you are married under common law and you do not inscribe to a Centre de Gestion Agrée. The social charges are always entirely deductible.

Another advantage is that the employed spouse can not have their wages ceased at source for household debt repayment, when the debt is to pay for the children’s education or pay the necessities for the family. The debt can not be ceased either in a common bank account.

When you evaluate advantages and impacts of the different status available for the spouse/civil partner you must not ignore your personal situation. In the case of a Conjoint Salarié, if you are a young or middle aged family, it is sometimes better to reduce the amount that the Chef d’Entreprise takes home, in order to provide a security for the spouse and the rest of the family. From my own personal experience, the choice that you make is not just a question of financial cost, but of taking in to consideration your situation in life, future plans, security and rights available.