To be legally allowed to work in France, independent contractors need to be officially registered. Yet, it isn’t always practical for freelancers to set up their own structure and to deal with everything that running a business entails. Opting for portage salarial in France is a great way for an independent contractor to enjoy all the benefits of being an employee while being able to keep their customers and conduct their activities as they see fit. This solution can also be used by foreign companies wishing to hire French workers without setting up a subsidiary in the country. Here’s everything you need to know about portage contracts.
In France, a “portage salarial” company is the equivalent of an umbrella organisation. As such, it acts as an employer for contractors and freelancers, invoicing their customers on their behalf. This allows professionals with suitable activities to receive wages and to be legally considered as employees in France, all while carrying out independent work for several clients, including international companies.
It also constitutes a convenient alternative to self-employment, which implies a number of administrative tasks and obligations and is less straightforward in terms of social charges, health insurance, pension contributions, etc. Similar to a traditional employment position, those opting for portage salarial in France only pay social charges on their actual income as other charges are deducted at the source.
Portage contracts are suitable for a range of activities and are especially fitting for services such as IT consulting, graphic design, marketing, writing & translation, as well as other intellectual services. For professionals who provide services aimed at individuals (baby-sitting, gardening, etc.), the Chèque Emploi scheme is usually preferred. Portage doesn’t apply to manual occupations, medical professions or in cases where the worker is required to have their own premises (hairdressers, shop owners, etc.) either.
The popularity of portage salarial in France comes down to how simple a process it is when compared to the obligations that self-employment implies. It is also very reassuring for people who are venturing out as freelancers for the first time and who don’t know how to navigate the intricacies of being a micro-entrepreneur or running a full-fledged company.
It all starts with the contractor securing an assignment with their customer and agreeing on a price and duration. This is where they can get in touch with a portage salarial company and sign an employment contract, effectively putting the freelancer on its payroll. A service contract is then established between the portage company and the client on behalf of the contractor.
The latter carries out the assignment as stated in the original contract and has the customer sign a timesheet to serve as proof. This can be done on a monthly basis or whenever a task is completed. Refunds can be claimed for business expenses, which the portage company will duly check to ensure legal compliance.
The client then receives an invoice from the portage salarial company in France and pays the organisation directly. The umbrella company covers all taxes and contributions, which are deducted from the contractor’s revenue, along with management fees.
Finally, the portage salarial company pays the contractor in the form of a monthly salary and provides them with a fully detailed payslip, which can serve as proof of employment.
Those who choose to operate under portage salarial in France are known as “salariés portés”, a position that comes with a number of perks. For starters, these workers enjoy full statutory employment rights, which entitles them to worker protection and healthcare, paid time off, as well as unemployment benefits. In case of mutual disagreement or dismissal, this represents a safety net that freelancers would otherwise have to give up.
“Salariés portés” are also exempt from the tax responsibilities that many business owners consider a burden, leaving them having to only worry about “Impôt sur le Revenu” (income tax). Contributions for health insurance, social security, and compulsory pension are deducted from their turnover by the portage company.
The financial security offered by portage salarial in France is one of the main reasons independent contractors choose to subscribe to this model. Portage companies arrange “Prévoyance” (income protection), mutual insurance, liability insurance, and cover periods of unemployment using reserved income.
These financial guarantees apply independently of the clients’ invoice payment, making portage salarial a great way to manage invoices and handle payment follow-up. In the event of a payment default on the part of the customer, the contractor is not the one to be penalised and having to deal with the consequences. Their salary is guaranteed.
While portage salarial in France is often considered from the perspective of the worker, the clients can also find some advantages to this scheme. For instance, international companies can use umbrella organisations to “hire” French workers without having to worry about establishing a legal entity in France.
Portage salarial relieves client companies of any administrative duties so they can operate as if they were using the services of a freelancer. They don’t have to track work hours, calculate payroll, pay mandatory contributions, edit and provide payslips or cost breakdowns, file taxes for the employee, etc.
Contract termination is also handled by the portage company, which means clients are not bound to the “salarié porté” in any way. If they no longer wish to call upon their services, they don’t need to provide any justification and no extra cost is involved.
The price of portage salarial in France can either be covered by the client, by the contractor, or shared between them, depending on how the contract was negotiated. When a company wishes to rely on portage to be able to hire a worker without having to deal with administrative obligations, then the price of the monthly bill typically reflects the situation. In other words, the client should expect to pay the equivalent of a net salary for the worker, plus social contributions and the portage company’s fee. In France, the employer’s contribution share is 45% of the worker’s gross salary on average, and the employee’s share is estimated to be around 20 to 23%. Portage management fees usually hover between 7 and 10%.
If a freelancer chooses to rely on a portage salarial company, they will need to determine their own contractor’s price based on the net income they expect to receive for their work.
Portage salarial is France’s way to offer independent contractors most of the statutory benefits any French employee is automatically entitled to. While these don’t include staff representatives, profit-sharing schemes, and other perks that may come with working for companies over a certain size, this solution does offer convenience and security. For those who are given the opportunity to work for a foreign company with no legal entity in France or whose work involves long-term arrangements, it can even be the most convenient way to be on the payroll. With no administrative obligations for the contractor or their customers, portage salarial allows everyone involved to focus on what they do best and to use their time for the most rewarding endeavours all while ensuring compliance with the law.