Freelancing Vs wage portage, which to choose?
Numerous statuses are used nowadays to refer to alternative employment such as freelancer, entrepreneur, employee of an umbrella company, etc.; and though somewhat analogous, there are some differences between these statuses.
In order to better discern between the latter, Befreelancer offers to explain the differences between freelancing and wage portage and their main characteristics.
Employee of an umbrella company and freelancer: what are the differences ?
What is a freelancer?
A freelancer is an independent intellectual who intervenes occasionally for clients with whom they sign an assignment contract.
The advantage of being a freelancer resides in the fact of being one’s own boss, choose with who to work, and the type of assignment to be carried out.
From a legal standpoint, the freelancer does not have a proper social status. They must opt for one of these three options: create a company, create a micro-company (self-employment) or wage portage. This is what will define the legal framework of their activity (social and tax regime they will be subject to).
In return for this freedom, the freelancer has to manage multiple administrative and tax tasks in addition to their main assignment.
The micro-entrepreneur status
The freelancer who chooses this status has to create a limited liability sole proprietorship (EIRL), or one-person limited liability company (EURL) where the single associate is a physical person running the company.
The micro-entrepreneur will be subject to income tax—with or without option for the payment in full discharge—and to the “micro-social” regime.
Definition of wage portage
Wage portage is defined by the WORK MODERNIZATION LAW of June 25th 2008, as “a set of organized contractual relations between an umbrella company, an employee, and client companies, consisting, for the employee of the umbrella company, of the wage regime and the remuneration of their service for the client by the umbrella company.”
It is a new form of work in France that combines the independence of an entrepreneur and the security of the salaried status.
Principle
The umbrella company hires the independent worker/consultant who becomes its salaried employee. The latter offers their services to client companies and carry out assignments for customers they have already canvassed. The employee of the umbrella company has the right to choose assignments and negotiate contracts autonomously.
The umbrella company will on its end handle the administrative tasks such as billing, customer follow-up services, paying the consultant’s salary, and take care of the social charges (which are more important than those of a freelancer).
In return, the company will deduct some charges:
- Management charges: it is the umbrella company’s commission for the services and the guidance provided to the employee. These charges are announced from the start of the collaboration.
- Social charges: It is the employer costs and the social security fees which are deducted from the consultant’s turnover.
In conclusion, the employee of the umbrella company will benefit from administrative and tax support as well as social security, however their turnover will be cut in half.
There is of course an alternative solution: freelancing platforms such as Befreelancer!
The advantages of our freelancing platform
Befreelancer is a freelancing platform specialized in IT and consulting.
It has the advantage of simplifying procedures to obtain the micro-enterprise status and helps freelancers to manage the administrative and logistic parts necessary to the completion of their assignment.
Consequently, freelancers will focus on their core business and the research of interesting assignments all the while paying lower fees because our platform does offer an appealing and affordable price scale.
For more information, please check our platform, we will help you find assignments and manage your freelancing business!