The SMIC, which stands for the Minimum Interprofessional Wage for Growth, is the legal minimum wage paid to any employee aged 18 or older. This provision was established by the law of July 2, 1970, to guarantee every employee a minimum income. With the regular updates made to it, it becomes possible to determine not only the monthly SMIC but also the hourly rate.
Calculating the SMIC: What factors are taken into account?
The update of the SMIC was made on January 1, 2010. Long before this date, the SMIC had always been revised on July 1 of each year. However, in exceptional cases, it was revised during the year.
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In 2014, there was a change in the factors considered for calculating the SMIC. Thus, the revaluation rate is based on two criteria:
- 50% of the purchasing power gain of the average salary of workers and employees;
- The inflation measured for households: about 20% of households with the lowest incomes are taken into account.
Note that the State can, at any time during the year, take the initiative to improve the SMIC to start a new era. In 2021, the SMIC experienced an increase of 0.99%. And in 2020, a revaluation of approximately 1.2% was observed. It thus becomes easier to determine what salary for 20 hours of work per week.
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What is the net monthly SMIC rate and the net hourly amount of the SMIC 2021?
As for the net monthly amount of the SMIC 2021, it is estimated at €1,231 net based on 35 hours of work per week. Regarding the hourly amount, the net SMIC 2021 is €8.11. For approximately 20 hours/week, the calculation can be easily made.
However, it should be noted that the net amount of the SMIC generally varies from one individual to another. Since it is the gross amount of the SMIC defined by the French government, it is essential to deduct social contributions to obtain the net SMIC. Keep in mind that these contributions can vary depending on the professions, which explains the differences between two net SMIC amounts.