Working in Réunion from Mainland France: Employment Law, Salaries, Tax, Sectors and Outlook

Réunion is an overseas department and region governed by the principle of legislative identity: the laws and regulations that apply in metropolitan France also apply there, with possible adaptations motivated by the territory’s particular constraints (IEDOM). A French citizen therefore needs neither a visa, nor a work permit, nor a residence permit to take up a job. A spouse of foreign nationality comes under the rules applying to foreign nationals, handled by the prefecture’s “foreign nationals counters”, open by appointment only.

The employment contract, working time and social protection are those of standard law. The public employment service is provided by France Travail (the French employment agency), which replaced Pôle emploi on 1 January 2024 with expanded missions (IEDOM). Affiliation to the Assurance Maladie (French national health insurance) flows from the activity itself: according to ameli, an employee does not have to show a minimum period of activity, and a self-employed person is covered from the start of their activity. Details are in the guide healthcare reimbursement in Réunion.

The SMIC (the interprofessional minimum growth wage) is around €12 gross an hour in metropolitan territory and in the overseas departments, revalued each year. For 151.67 hours of work a month (35 hours a week), it comes to about €1,800 gross, i.e. about €1,400 net (IEDOM). The legal minimum is therefore the same as in mainland France.

Private-sector employees, public companies included, receive an average monthly net salary of around €2,200 in full-time equivalent. Réunion ranks second to last among French regions, ahead of Mayotte and behind the other overseas regions. This position masks contrasting situations: managers’ gross pay is among the highest (8th rank), while that of manual workers and clerical and service employees is among the lowest (17th rank out of 18). Pay gaps between men and women are less marked there than nationally (6% against 15%), partly because public jobs, which are less unequal, are more numerous.

Gross disposable income per inhabitant is about 78% of the national level and 44% of tax households declare less than €10,000 of annual income, against 20% in France as a whole. The family allowance fund pays out more than €2 billion in benefits a year, and three quarters of Réunion residents are affected by at least one benefit (IEDOM).

Nearly 295,000 employees work in Réunion. The private sector accounts for about 70% of salaried jobs and grows, notably in agriculture, industry and business services. The public sector declines, in the wake of the fall in subsidised contracts (parcours emploi compétences). Non-market services employ nearly 128,000 employees, i.e. more than 43% of salaried employment. Trade employs nearly 38,000 employees (nearly 13%). The civil service has nearly 40,000 local authority staff, nearly 35,000 State staff and more than 12,000 hospital staff, i.e. 85 staff per 1,000 inhabitants (IEDOM).

• Civil servant transferred to Réunion: IEDOM indicates that, in the DROM (overseas departments and regions), public employees’ pay is increased and the rules on leave and travel costs are adjusted to take account of remoteness. Amounts and conditions should be checked with the managing department, before accepting a posting.
• Apprenticeship and work-study: around 13,000 apprenticeship contracts; financial aid for hiring work-study trainees ranges from €750 to €6,000 in the first year depending on company size and qualification (IEDOM).
• Jobseekers: more than 117,000 people registered with France Travail in category A; the unemployment rate stands at around 16%, among its lowest levels since measurement by the Employment survey began, and the employment rate at 54% (IEDOM, Insee).

For a new arrival, the local job market is narrower than in metropolitan France: the activity rate of 15-64 year-olds is 64% in Réunion, against 75.1% in metropolitan France (IEDOM, Insee). It is useful to prepare the search before leaving, with France Travail and employers; IEDOM also notes recruitment difficulties in tourism.

According to IEDOM, income tax is reduced by 30% in Réunion, within a ceiling of €2,450, as in Guadeloupe and Martinique; the reduction is 40% in French Guiana and Mayotte, within the limit of €4,050. VAT applies at a standard rate of 8.5% (against 20% in metropolitan France) and a reduced rate of 2.1%. Basic necessities (food and hygiene) are temporarily exempt from VAT. Octroi de mer (a local levy on goods), whose base, rate and exemptions are set by the regional council, is added on imported goods.

Employees’ and the self-employed’s social contributions come under the standard general scheme. Employers benefit from social charge relief schemes specific to the DROM, whose evolution was subject to uncertainty during the debates on the Finance Bill; IEDOM notes that 63% of Réunion businesses consider that their activity was affected by this climate of political uncertainty. The URSSAF (the social security contributions collection body) and the CGSS (the general social security fund), presented on the CGSS of Réunion website, provide information on the rules applying to each situation.

For an employee seconded from a company in mainland France, the place of tax residence and the fund to which they are attached depend on the address and the contract; the employer and the tax authority clarify the situation, since no international agreement is involved between mainland France and Réunion.

Since the 2000s, self-employment has been growing three times faster than in metropolitan France (IEDOM). More than 15,000 businesses are created each year, at a pace higher than the national level. 56.7% of creations are under micro-business status, against 65% in metropolitan France.

• Statuses: those of the whole of France (micro-business, company, liberal profession); the self-employed person is covered by the Assurance Maladie from the start of their activity (ameli).
• Financing: interest rates follow changes in key policy rates, and IEDOM offers support services for very small and small businesses, rating and credit mediation.
• Remote work from Réunion for an employer in mainland France: the sources consulted describe no rule specific to the territory; the situation comes under standard law and the agreement reached with the employer. The fund to which you are attached and the place of taxation should be checked with them.

Réunion’s economy is heavily service-based: all services (market, non-market and trade) represent about 85% of value added. Non-market services (public administration, education, health and social work) produce 38% of it, against 22% nationally; industry, energy included, weighs half as much as in France as a whole. Market services have become the island’s leading sector, ahead of non-market services. The currency is the euro, and IEDOM carries out central bank missions by delegation from the Banque de France.

• Agriculture and agri-food: hard hit by Cyclone Garance, with losses estimated at €110 million; sugar exports are at a historically low level. Southern-seas fishing is the island’s leading export sector.
• Construction: turnover up after years of decline, but headcount down and a fragile financial situation.
• Tourism: about 270,000 outside tourists per half-year and record attendance, but contrasting financial results.
• Trade and industry: turnover in slight decline; market services grow slightly.

IEDOM describes a timid recovery: the business climate indicator recovered, and private employment picked up. The outlook is judged broadly favourable, but weakened by the rise in energy prices and by constraints on public finances, which limit the public sector’s room for manoeuvre.

• Before leaving: confirm the contract, pay and any remoteness bonuses with the employer; check the fund to which you are attached (CGSS) and plan supplementary health cover.
• For housing and budget: take into account prices 9% higher than in metropolitan France according to the Insee survey, detailed in the guide living in Réunion.
• For a return: inform the CGSS and open your rights with the fund of the new place of residence; see insurance on return to France.