How much does a minimum wage cost for the company?

Difference between gross salary and net salary at the minimum wage

For an employee paid at the minimum wage, it is essential to distinguish between gross salary and net salary. The gross salary corresponds to the amount before the deduction of mandatory employee social contributions. In contrast, the net salary is the sum that the employee actually receives in their bank account after these deductions.

In 2025, an employee at the minimum wage receives an estimated net salary of €1,426.30 per month, which is about €9.40 net per hour for a 35-hour week. This difference between gross and net is explained by the employee social contributions, which serve to finance social security, retirement, unemployment insurance, and other social systems.

Understanding this distinction is important to evaluate not only the net remuneration received by the employee but also the total cost for the company, once the employer contributions are added.

Employer contributions

Employer contributions encompass all the social charges that the employer must pay in addition to the gross salary of an employee paid at the minimum wage. These contributions finance several branches of social protection, such as health insurance, retirement, family allowances, unemployment, and complementary retirement.

The overall rate of these contributions generally varies between 25% and 42% of the gross salary, depending on the size of the company and certain specific arrangements.

For employees at the minimum wage, specific reductions, called general reductions of employer contributions, are applied to decrease the total cost for the company. These reductions, calculated based on the gross amount of the minimum wage and the company's workforce, help to alleviate the burden of social charges on low wages.

Employee contributions

Employee social contributions are directly deducted from the gross salary of the employee. They represent about 22% of the gross salary at the minimum wage in 2025, which creates a notable difference between the gross salary and the net salary received by the employee.

These contributions serve to finance social security, retirement, unemployment insurance, and other social regimes. Although they do not directly impact the cost for the employer, they influence the net salary and the purchasing power of the employee.

Impact of reductions on the cost for the employer

The reductions in employer contributions applied to salaries close to the minimum wage significantly reduce the total employee cost for the company. For example, companies with fewer than 50 employees can benefit from a general reduction, substantially decreasing the employer contributions, which facilitates hiring at this level of remuneration.

This measure makes hiring at the minimum wage more accessible and encourages employers to recruit by partially reducing the burden of employer social contributions. It is essential to integrate these indirect costs into the overall budget calculation related to a minimum wage employee.

Example of calculating the cost of a minimum wage employee

To illustrate the total cost for the employer of an employee paid at the minimum wage, let’s take a concrete example. In 2025, the monthly gross salary for a full-time 35-hour week is €1,801.80. To this amount, the employer contributions are added, representing about 4.4% of the gross salary, or approximately €79.28.

By adding these charges to the gross salary, the company incurs a total salary cost of about €1,881 per month for a minimum wage employee. This calculation directly includes the mandatory social charges, showing that the cost of labor for the employer far exceeds the simple gross salary paid to the employee.

Indirect costs related to hiring a minimum wage employee

In addition to social contributions, the cost for the company also includes indirect costs, often overlooked but significant. These costs include expenses related to setting up the workstation—furniture, computer equipment, consumables—as well as expenses associated with training, administrative management, and monitoring the employee.

Moreover, costs related to the work environment, such as professional insurance, contributions to occupational medicine, or paid leave and other social benefits, also add up. All these elements can significantly increase the total amount that the employer must budget for hiring a minimum wage employee.

Wage portage: an alternative to direct hiring at the minimum wage
In light of the direct and indirect costs associated with hiring a minimum wage employee, some companies turn to wage portage as a flexible solution. This system allows for hiring an autonomous professional while outsourcing administrative, social, and tax management. The client company pays an umbrella company, which then pays a salary to the ported professional, complying with legal obligations. Although the daily cost is generally higher than a classic minimum wage, wage portage allows for managing social charges, avoiding traditional employment contracts, and limiting long-term commitments. It is a relevant option for occasional missions or to test a need before a sustainable hire.