You formed your French company from London, Dubai or New York, and your first hire in France is a salesperson based in Paris on a fixed salary plus commission. Six months later the pipeline is empty, the CRM (customer relationship management software) shows no visits and no reports, and every quarterly target has been missed. From abroad, the temptation is to stop paying the commission and to end the contract with a short email. Under French law both reflexes can cost you dearly: an unpaid variable part is salary that the labour court will award in full, and a dismissal for missed targets follows a mandatory procedure where each deadline counts. This article explains, step by step, how to draft a fixed-plus-commission package that a French judge will enforce, what the hire truly costs each month between payslip, DSN (déclaration sociale nominative, the single monthly electronic payroll return) and URSSAF (the social security collection agency) charges, how to set written targets and build a file that proves the underperformance comes from the employee rather than the market, and how to run the dismissal from abroad, calculate the severance and face the labour court scale if the case goes to Paris.

I. Paying your first French salesperson correctly while you run the company from abroad

A. How to draft a fixed-plus-commission clause that a French labour court will enforce

French law treats commission as salary, not as a discretionary bonus. Article L. 3221-3 of the Labour Code defines remuneration broadly: the ordinary or minimum base salary or wage plus every other benefit and accessory paid, directly or indirectly, in cash or in kind, by the employer to the employee by reason of the employment (Labour Code, article L. 3221-3). In plain English, the fixed pay, the commission, the benefits in kind such as a company car and every accessory paid because of the job all form one single salary. The practical consequence for a foreign founder is immediate: you cannot suspend the variable part because you are disappointed, and you cannot treat it as a gift that you grant or withdraw at will. Everything written in the contract about the commission binds you, and everything missing from the contract will be interpreted in favour of the employee.

The second building block is working time. Most first sales hires work full time, and article L. 3121-27 of the Labour Code sets the statutory full-time working week at thirty-five hours of actual work (Labour Code, article L. 3121-27) A travelling salesperson is still subject to working-time rules, and overtime, evening work and weekend trade fairs must be tracked. If you hire an autonomous executive on a day-based package (forfait en jours), that regime requires a collective agreement authorising it and a written individual agreement; it is never automatic. For a first hire, a standard 35-hour contract with recorded hours is simpler and safer to defend.

The decisive point is how objectives are set. French courts allow the employer to set sales targets unilaterally under its management power, but they attach three strict conditions. In a widely followed ruling, the Rennes Court of Appeal held that objectives set by the employer must meet a clear standard, expressed in these words: they must be clear and precise and brought to the employee’s attention at the start of the reference period. The court added that targets must rest on objective evidence independent of the employer and must treat employees in the same situation equally (CA Rennes, 5 February 2025, RG 21/04455). Translated into practice for a founder sitting abroad, this means four things. First, each year or quarter starts with a written target letter stating the figure, the period, the territory, the product scope and the exact commission formula. Second, the employee receives that letter at the beginning of the period, ideally countersigned, and a copy is kept with the contract. Third, the formula must be verifiable by the employee from documents he or she can access, such as signed orders, invoiced turnover or CRM extracts. Fourth, the targets must be realistic and achievable in the market you actually gave the salesperson: the same figure imposed on a Paris territory with an existing client list and on a new hire who must open a region from zero will not survive judicial review.

The sanction for skipping this discipline is severe. Where the contract promises a variable part linked to objectives defined each year and the employer never defines them, the courts award the full variable amount. The Rennes court held that where the employer has neither specified the objectives nor set verifiable calculation conditions, and the contract states no reference period, the variable pay is due in full. In that case the employer openly argued that, given the poor work and the lack of involvement of the employee despite the measures taken, it could not even consider setting objectives for him. The court answered that the claimed absence of objectives proved the employee’s case, recalled the Court of Cassation ruling of 10 July 2013 (No 12-17.921), and ordered payment of the variable part in full for 2017 and 2018. A foreign founder should read this twice: refusing to set targets because the salesperson disappoints you transforms the maximum bonus into an automatic debt. Set targets every period, even for a struggling employee, or pay the full amount.

Concretely, a workable commission clause for a first French sales hire contains the fixed annual gross salary, the on-target variable amount expressed as a figure rather than a vague percentage, the reference period, the definition of the trigger (orders signed, orders paid, turnover invoiced), the payout calendar, and the fate of pending deals at departure. Add a clause stating that objectives are communicated in writing at the start of each period and that quarterly reviews are held, by video call if you live abroad, with written minutes sent to the employee. Keep every minute, every CRM export and every email commenting on figures. If you later need to prove underperformance, this paper trail is the file; without it, there is no file. Founders choosing between a subsidiary and a branch at this stage should also remember that the employing entity determines who signs all these documents, a choice explained in our guide to choosing between an SAS, a SARL, a branch and a subsidiary when investing from abroad.

B. What the hire truly costs each month: payslip, DSN return and the URSSAF base

The French payslip (bulletin de paie) is a regulated document, not a simple receipt. Article L. 3243-1 of the Labour Code extends payslip rules to every employee or person working in any capacity, anywhere, for one or more employers, whatever the amount, nature, form or validity of the pay and contract (Labour Code, article L. 3243-1), and article L. 3243-2 requires the employer to hand over an itemised payslip each time wages are paid (Labour Code, article L. 3243-2) The payslip must show the gross salary with the fixed and variable parts itemised, the employee and employer social charges, the net pay, the net taxable amount and the withholding tax. An electronic payslip is lawful unless the employee objects, provided integrity, availability and confidentiality are guaranteed. From abroad, you will in practice rely on a French payroll provider or an accountant (expert-comptable) connected to your bank: never ask the salesperson to invoice you as a freelancer to avoid the payslip, because reclassification as an employee brings back pay, overtime and damages.

Each month the payslip feeds the DSN, the single monthly electronic return through which the employer declares salaries and pays social charges to URSSAF and the supplementary bodies. The DSN is filed by the 5th or the 15th of the following month depending on headcount, and it carries the data used for withholding tax, complementary pension and health coverage. A missed or late DSN triggers penalties and draws attention to the file, which is the last thing a foreign-run company needs. Calendar discipline matters well beyond payroll: approving accounts, holding the shareholders’ meeting and filing with the registry (greffe, the court clerk’s office keeping the company register) follow their own strict timetable, summarised in our annual legal calendar for French companies managed from abroad.

The cost base is set by article L. 242-1 of the Social Security Code, under which general-regime social security contributions are assessed on activity income as defined for the CSG base (Social Security Code, article L. 242-1). Commissions are activity income, so every euro of commission paid increases the contribution base exactly like fixed salary. Take a plain illustration: a fixed gross salary of 40,000 euros with a 10,000-euro variable part means contributions are computed on 50,000 euros when the full variable is earned, and on a lower figure only when a smaller contractual variable amount is actually due under a properly set target system. Failing to declare the variable part, or paying it off-payslip as an exceptional transfer, exposes the company to a URSSAF reassessment (redressement) covering the missing base plus surcharges and late penalties. Companies already facing such a control find the procedure and the remedies described in our analysis of URSSAF audits of French companies run from abroad.

Two practical warnings complete the picture. First, benefits in kind given to a salesperson, typically a company car, must appear on the payslip for their assessed value and enter the contribution base; the private use of a company vehicle is not invisible to URSSAF. Second, expense reimbursements are a different world from salary: genuine business expenses refunded against receipts are not salary, but flat allowances with no receipts are reclassified into the base. From abroad, impose a monthly expense report with receipts, paid by bank transfer separately from salary, and keep the policy in writing. Precise payroll records also protect you later: when a dismissal for missed targets is challenged, the labour court reads the payslips first, and payslips that match the DSN filings tell a story of a serious employer.

II. When the salesperson misses every target: from written warnings to a dismissal that survives review

A. How to set targets, warn in writing and prove the failure belongs to the employee

French law permits dismissal for poor results, but it never permits dismissal for disappointment. Article L. 1232-1 of the Labour Code lays down the single test for every personal dismissal: it must follow the procedure in that chapter and rest on a real and serious cause (Labour Code, article L. 1232-1) Missed figures alone do not meet that test. The Rennes Court of Appeal restated the applicable standard as follows: poor professional performance can constitute real and serious cause only where it rests on precise, objective evidence attributable to the employee and relates to tasks within his or her role (CA Rennes, 5 February 2025, RG 21/04455). Each word carries weight: precise means dated figures and named files, objective means verifiable outside your own impression, imputable means caused by the employee rather than by the market, and relevant to the qualification means tasks that actually belong to the job description.

In that same case the dismissal collapsed precisely because the file lacked these qualities. The employer had recruited a logistics solutions salesman on a 75,000-euro fixed salary plus a 5,000-euro variable part, criticised the absence of visit reports in the CRM tool, the lack of follow-up on trade-fair prospects and the failure to develop the food-industry market, and dismissed him for professional insufficiency by letter of 20 December 2018 after a prior meeting on 17 December 2018. The labour court of Brest had already ruled the dismissal without real and serious cause and awarded damages plus the variable pay, and the Court of Appeal confirmed that the dismissal lacked real and serious cause while awarding the full variable part for 2017 and 2018. The lesson for a foreign founder is not that dismissing an underperforming salesperson is impossible; it is that a dismissal argued in generalities about motivation, involvement or commercial disappointment, without dated comparative evidence, will be overturned and priced.

French practice therefore expects a graduated file built over several months. Start with realistic written objectives communicated at the beginning of the period, as described above, because an unattainable target destroys the case before it begins: a quota doubled without additional means, a territory stripped of its main accounts, or a target maintained after a major market shock will be read as a setup rather than a measure. Continue with regular reviews, by video call if you are abroad, each closed by written minutes recording the figures, the gap and the agreed actions. Provide genuine support and record it: product training, accompanied client visits, marketing material, CRM access, a warning that results remain insufficient despite that support. Then send one or two written warnings (lettres de recadrage or mises en garde) by email with acknowledgment or registered letter, describing facts, figures and dates, and setting a final improvement period with a clear deadline. French courts give real weight to this progression: an employer who helped, warned and waited looks credible, while an employer who never reacted for a year and then dismisses looks as though the motive lies elsewhere.

Three distinctions decide most cases. First, separate the employee’s results from the market: if the whole team misses the same targets during a downturn, the failure is collective and cannot be pinned on one person; if colleagues with comparable territories and means succeed where the rep fails, the comparison becomes your strongest exhibit. Second, separate conduct from performance: repeated absence from client meetings, refusal to use the CRM, insulting a key account or ignoring direct instructions belong to disciplinary law with its own fast procedure and fault scale, while missed figures despite genuine effort belong to non-disciplinary insufficiency with its longer evidentiary path. Mixing the two in one letter confuses the legal basis and weakens both. Third, separate the person from the rumour: notes about attitude, hearsay from clients and undated impressions prove nothing, whereas dated CRM extracts, signed visit reports or their documented absence, email threads showing unanswered prospects, and sales tables certified by accounting prove facts. And the same court recalled the golden rule of evidence that any remaining doubt benefits the employee, so the file must leave as little room for doubt as a remote manager can achieve.

B. How to run the dismissal from abroad, pay what is due and face the labour court scale

The dismissal procedure for personal reasons is written in the Labour Code as a sequence of mandatory steps, and each step has its own clock. First, the employer summons the employee to a prior meeting (entretien préalable) by registered letter or hand-delivered letter stating its purpose. Article L. 1232-2 of the Labour Code requires at least five working days between presentation of the invitation letter and the prior meeting itself (Labour Code, article L. 1232-2) The letter must inform the employee of the right to be assisted by a staff member or, in companies without staff representatives, by an outside adviser from an official list. A founder living abroad does not need to fly in for this meeting, but someone must hold it properly: give a written mandate (pouvoir) to a person physically present in France, ideally employment counsel or a senior manager, brief that person on the file, and ensure a written record of the meeting. Holding the meeting by video call from abroad without the employee’s agreement is a procedural gamble; a physical meeting with a mandated representative is the safe route.

Second, after the meeting, the employer must wait before notifying the dismissal. Article L. 1232-6 of the Labour Code forbids sending the dismissal letter until at least two full working days after the scheduled prior meeting (Labour Code, article L. 1232-6), and it must be sent by registered letter with acknowledgment of receipt stating the reasons in detail. The letter fixes the boundaries of the dispute: reasons added later before the court cannot save a vague letter, while a precise letter listing dated facts, figures, warnings and support measures frames the entire case. The letter must state non-disciplinary insufficiency of results or professional insufficiency, never a fault, because invoking a fault while paying severance and notice contradicts the chosen ground. Keep proof of every posting from France, track the acknowledgment, and calendar the two-day and five-day periods in working days (jours ouvrables), excluding Sundays and public holidays.

Third, dismissal for insufficiency opens the full package of departure rights, unlike dismissal for serious misconduct. The employee serves a notice period (préavis) except where the contract or the applicable collective agreement provides otherwise, receives accrued paid leave, and, with at least eight months of continuous service, qualifies for the statutory severance. An employee on a permanent contract with eight months of continuous service who is dismissed for a reason other than serious misconduct is entitled to statutory severance (Labour Code, article L. 1234-9). The minimum is one quarter of a month’s salary per year of service for the first ten years, then one third of a month per year beyond ten years (Labour Code, article R. 1234-2) Take a concrete illustration on a reference salary of 50,000 euros gross per year, variable included: three years of service give three quarters of a month, roughly 3,125 euros at the statutory minimum, before any more generous collective agreement, which must always be checked first. The reference salary itself is the most favourable of the last twelve or three months, so commissions earned in the final year count. The employer must also deliver the final settlement (solde de tout compte), the work certificate (certificat de travail, whose official guidance is published on service-public.fr) and the France Travail employment-centre attestation allowing registration for unemployment benefits.

Fourth, anticipate the labour court math if the salesperson challenges the dismissal. The competent court is the conseil de prud’hommes (the elected labour court) of the place of employment or of the employer’s French establishment, which for a Paris-based rep means Paris, with a conciliation phase first and judgment later. The judge examines the procedure and the real and serious cause on the evidence supplied by both sides; article L. 1235-1 of the Labour Code directs the judge to form his or her conviction on the evidence supplied by both sides, with any remaining doubt benefiting the employee (Labour Code, article L. 1235-1) If the dismissal is held to lack real and serious cause, article L. 1235-3 of the same Code applies the Macron scale: the judge may propose reinstatement and, if either side refuses, awards damages between statutory minimum and maximum monthly salaries set by seniority, running from zero to one month at the start of employment up to twenty months’ salary beyond twenty-nine years of service, with adjusted minima in companies with fewer than eleven employees (L. 1235-3 table). In the Rennes case above, the confirmed award for a dismissal without real and serious cause reached 20,758.53 euros net plus 10,000 euros gross of variable pay and a small severance balance, a proportions check any founder should run before deciding to dismiss. Add the statutory severance already paid, the notice, the leave, counsel fees and management time, and the true price of a lost case becomes visible: building the file properly is not bureaucracy, it is arithmetic.

Conclusion

Hiring a first French salesperson from abroad succeeds when the pay system is written to be enforced rather than to impress. Put the fixed salary and the full commission formula in the contract, communicate realistic written objectives at the start of every period with a verifiable calculation method, itemise fixed and variable parts on each payslip, declare them through the monthly DSN return and pay the corresponding URSSAF contributions. When targets are missed, resist remote improvisation: compare the rep with colleagues in comparable situations, provide documented support, send dated written warnings with a final deadline, and only then move through the prior meeting, the reasoned dismissal letter and the complete departure package of notice, severance, final settlement, work certificate and employment-centre attestation. Each deadline in articles L. 1232-2 and L. 1232-6, each payslip line under articles L. 3243-1 and L. 3243-2, and each contribution euro under article L. 242-1 is a piece of evidence the Paris labour court will read if the dispute reaches it. Managed this way, the commission motivates instead of indebting you, and a dismissal for proven insufficiency rests on precise, objective facts attributable to the employee, which is exactly what article L. 1232-1 and the courts require.