Everhour separates cost and billable rates, while French profit calculations require VAT, PCG cost rules, and tax treatment clarity.
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A profit calculation in France answers three separate questions: the gross profit on the sale or project, the taxable profit base, and the amount left after the relevant profit tax treatment. Start with revenue net of VAT, because VAT collected from the customer belongs to the tax account rather than profit. A VAT-inclusive price must be converted before margin math starts.
The business form changes the final layer. French companies generally apply corporate income tax to taxable profits. French sole traders and partnerships are generally taxed through the owner-level income tax system unless they opt into corporate income tax. Under micro-BIC, eligible businesses use flat expense allowances rather than actual COGS and operating expenses.
Mainland France uses a 20% standard VAT rate, reduced rates of 10% and 5.5% for specified goods and services, and a special 2.1% rate for limited categories. For VAT-inclusive sales prices, multiply the gross price by `100 / (100 + VAT rate)` to find taxable net revenue. At 20% VAT, that factor is `100 / 120`.
Example: a French service project invoices €7,200 including 20% VAT. Net revenue is €6,000. Delivery labor is 50 hours at €48 per hour, or €2,400. Add €860 of materials and €740 of allocated overhead. Total project cost is €4,000, so pre-tax profit is €2,000. If the company qualifies for the 15% SME corporate income tax band, tax on that profit is €300, leaving €1,700 before distributions and nonproject items.
French statutory accounts are prepared under the Plan comptable général, maintained by the Autorité des normes comptables. For inventory and product businesses, the PCG cost base includes acquisition, transformation, and other costs needed to bring inventory to its current condition. It excludes losses and most administrative costs. For interchangeable items, the PCG permits FIFO or weighted-average costing.
This rule changes the number you subtract from revenue. Freight-in that brings goods to saleable condition belongs in stock cost. General office administration does not belong in inventory cost just because it happened during the same month. Service businesses face the same discipline in a simpler form: include direct delivery labor, project-specific purchases, subcontractors, and a consistent overhead allocation, then keep owner draws and income tax outside gross profit.
A one-time profit calculation is enough for a quote, a small purchase decision, or a quick check on a single invoice. It works when the VAT rate is clear, the cost list is complete, and the tax treatment is obvious from the business form. Businesses under the VAT franchise threshold invoice without VAT, but they also cannot deduct VAT paid on their own business purchases.
A managed workflow becomes necessary when rates change by person, project, or date. Everhour separates internal cost rates from client-facing billable rates, supports per-person defaults and per-project overrides, and preserves dated rate history. That gives project reports a stable trail from hours and rates to revenue, labor cost, and profit before the French tax and accounting wrapper is applied.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
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A French profit calculation should start with VAT-exclusive revenue. For a VAT-inclusive price, convert the gross amount first. At the 20% standard VAT rate, multiply the gross price by `100 / 120`. A €7,200 VAT-inclusive invoice produces €6,000 of net revenue for profit analysis.
Under the French PCG, stock cost includes acquisition, transformation, and other costs needed to bring inventory to its current condition. Losses and most administrative costs stay out of inventory cost. Interchangeable items can use FIFO or weighted-average costing, so the selected method must stay consistent across comparable calculations.
No. Qualifying SMEs with sales up to €10 million can apply the 15% corporate income tax rate to the first €42,500 of profit. Profit above that band is taxed at the 25% standard corporate income tax rate for financial years beginning on or after January 1, 2022.
Micro-BIC replaces actual cost subtraction with a flat expense allowance. The allowance is 71% for sales and eligible accommodation, 50% for services, and 30% for non-classified furnished rentals. It applies only below VAT-exclusive revenue thresholds of €188,700, €77,700, or €15,000, depending on the activity.
VAT treatment changes project profit most often when a gross customer price is treated as revenue. A €1,200 invoice including 20% VAT contains €1,000 of net revenue and €200 of VAT. Subtracting costs from €1,200 overstates profit before the tax calculation even starts.
Everhour separates cost and billable rates so a team can calculate labor cost, revenue, and profit from the same tracked hours. Members can have default rates, individual projects can override those rates, and dated rate changes keep older reports tied to the rate in force when the work happened.
Use a calculator for the single answer, then keep rates, hours, and project costs connected. Everhour turns tracked work into rate-based profit reporting that supports cleaner billing and budget decisions.
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