Salary transfer has advantages and disadvantages. But in any case, it’s an interesting alternative when it comes to guiding you towards setting up a business.
Certainly, the disadvantages linked mainly to its formalism and the entrance ticket cannot be overlooked.
But these elements can be offset by the fact of obtaining the qualification of employee and by a certain flexibility that you will appreciate on a daily basis.
Definition of wage portage
From a legal point of view, the definition designates on the one hand the relationship between a wage portage company for the benefit of a client company. For this, it is imperative to establish a commercial contract according to the mission. Secondly, the establishment of the employment contract between the worker being transported and the wage transfer company.
It was in 1980 that this hybrid form was born, but rather in a confidential manner. Today it is a real alternative to the qualification of an employee and that of an automotive entrepreneur. This is why wage shifting is booming, allowing many people to thrive in their businesses while still having a significant margin of safety.
Portage wages and benefits
Protection of the employee with flexibility in his work
If many people choose wage transfer, it is thanks to an undeniable advantage over a specific status. In fact, you have real autonomy quite similar to that of the status of an automotive entrepreneur. But the main difference is based on the fact that you have social protection in the same way as an employee.
To put it simply, the employee being transported is able to set their own prices and choose their customers. This is a particularly appreciable flexibility, especially as it remains free in terms of execution. He himself decides the necessary working hours and modulates his hours according to his wishes.
However, this flexibility in the way he works also allows him to have the benefits of employee status.
This is a particularly valuable safety net, especially in a new business with a not always fixed income. The benefits then concern health insurance, but also complementary health, unemployment and retirement.
Get fully involved in your business thanks to the salary portage
Other advantages of wage transfer include the absence of administrative constraints. Many people, in fact, do not dare to abandon the qualification of employee, not for lack of technical competence in relation to their business, but rather for the many documents to be filled in and followed regularly.
Although the administrative management of an activity is mandatory, the assisted employee will no longer have to worry about it. Both for the monitoring of the accounting, the calculation of the corporation tax, the definition of the legal structure and the commercial contract, will be directly supported by the portage company.
A real relief to avoid administrative complications, while being sure that the mandatory documents are well preserved. This concerns not only administrative procedures, but also accounting and legal procedures.
Of course, this service is not offered by the portage company, the management costs will be directly charged to the employee being transported.
To conclude a commercial contract, it must be drawn up correctly. Also in this case the transported worker will not have to worry about it, the transport company will draw up the invoice in good and due form in relation to the various elements dealt with and in relation to your point of view. In no case will the commercial contract be concluded with you.
Obviously you have to pay social security contributions which will be recorded directly in the company’s accounts.
But that’s not all, some wage transfer firms go even further by offering their customers coverage of minimal non-payment or delay. Once again it is about providing additional security that will be appreciable for the employee being transported.
Support for those in need
Running a business while being autonomous is the dream of many entrepreneurs. But this autonomy doesn’t mean you don’t need regular support. This is where the wage portage company comes in. The help provided can be given while setting up your business or when it needs to know a more specific development.
The assisted employee will have access to workshops directly geared to the needs, allowing him to address a more precise request or to develop his own network. Choosing the qualification of employee also means receiving the support of an active community and therefore breaking with the isolation that unfortunately some self-employed entrepreneurs may encounter.
The benefit of a safe state
March 2017 is an important event in the salary portage. On that date, a collective branch agreement was signed in order to take into account the express needs of the consultants involved.
It was thus possible to secure a professional career in an industry that desperately needed it.
Again, the benefit is then palpable for the brought employee, because he receives legal certainty through conventional regulations.
The disadvantages of wage transfer
As seen above, salary transfer is a solid alternative to starting out as a freelancer. But it should be borne in mind that there are some disadvantages that should be immediately considered.
The significant cost of wage transfer
The first drawback relates to the costs of this legal status. Three main elements come into play, namely:
- Employer contributions.
- Employee contributions.
- The commissions required by the umbrella company.
In consideration of the administrative, legal and accounting assistance, it is normal for the parent company to be remunerated in relation to the commissions it generates. Again, the rate remains free, but will generally be between 7 and 11% of the rate.
To this must be added the social security contributions which represent approximately 75% of the net amount of taxes.
Specifically, if you invoice € 20,000 in commission excluding taxes to your client, the wage portage company will deduct their € 2,000 commission based on a 10% rate.
Employer contributions will amount to € 5,600 compared to € 2,900 for employee contributions.
As a result, you will end up with a net salary of 8,500 euros, but don’t forget that this amount will then be subject to income tax.
A formalism that must be respected
Among the other disadvantages of wage transfer is its formalism. In fact, it is imperative to undergo the signing of three distinct contracts:
- First, the contract for the provision of services. It allows you to connect the umbrella company with the consultant and the client. By itself, it is a traditional contract that defines the payment terms as well as the start and end dates of the mission.
- A second contract must be signed, this time corresponding to an employment contract. It concerns only the transport company and the employee being transported. It is drawn up at the same time as the contract for the provision of services, indicating a fixed duration during the mission period.
- Finally, you will find the adhesion contract that involves the same participants in order to provide for the re-invoicing of the fees in addition to the additional services managed directly by the portage company.
Consider the entrance fee
Another element not to be overlooked is the presence of a minimum amount to be able to benefit from the qualification of employee covered. Most portage companies are reluctant to accept commissions that do not exceed € 1000. However, this is not a legal obligation, but an appreciation, so the amount of the entrance ticket remains variable depending on the company.
Some confusion on the right to unemployment
Many people mistakenly think that employee status automatically entitles them to unemployment insurance. However, some conditions must be met, otherwise the return-to-work assistance benefits will disappear.
First of all, you must always make your monthly declaration at the Pôle emploi to confirm your registration. If not, you will be expelled.
Part-time, impossible to work more than 110 hours per month, otherwise you will be canceled again.
Our advice in choosing the legal form
Even if you have a clear idea about your business, it is important to define your legal status correctly. This is a decisive choice that will have a direct influence on your income.
So rather than making a choice that you may later regret, consider all your options and if necessary seek advice from an expert who will be able to provide you with specific answers about your situation.