Contracting in France - Working Through a Portage Salarial
Contract workers resident in France must be correctly registered to receive payments. Portage Salarial organisations act as "agents" and provide a service through which a worker can legally invoice clients and receive social security...
There are a few basic legal options available to full-time residents in France wishing to work on a freelance basis or as an independent contractor (whether customers are based in France or not):
- Register the professional activity as a business. Find the guide Starting a Business in France in the left hand side menu
- Become an Auto-Entrepreneur
- Work under the Cheque Emploi scheme which extends only to some manual and domestic jobs.
- Work through a Portage Salarial.
The Portage Salarial is an umbrella structure and offers an environment from which people with suitable activities can carry out their work without having to register as a business or become involved in the administrative tasks connected to being self-employed in France. It is suitable for people involved in intellectual services as such IT and design, translation, business consulting, editorial, tele-marketing, selling to commission and other similar occupations, whether working from home or on-site. People working on their own projects through a Portage have salarié (employee) status rather than self-employed status and therefore do not have the same obligations as those registered as an independent business
Like a traditional position of employment, those working through the Portage pay social charges only on income as (and if) it is earned and this is seen as one of the main benefits of the system. Social charges are deducted at source by the Portage when income from projects or assignments is received.
The Portage system is suitable for a wide range of activities, but deals mostly with consulting roles such as graphic design, IT and marketing. In general, work such as hairdressing and medical roles or work carried out by artisans are some of the activities that cannot be undertaken through the Portage structure and work such as gardening or baby-sitting may be more suited to the cheque emploi scheme.
People who choose to work through a Portage Salarial find their own projects and customers/clients as they would in a typical Freelance capacity and work as and when they choose, but have "employee" (or salarié) status while working under the umbrella of the Portage.
Typically, a portage will charge a fee of seven to ten percent of the total amount of invoices processed each month to cover administrative tasks and insurance.
How it Works
The process of working through a Portage involves workers finding their own clients and work opportunities and agreeing a rate for their services with these clients as they would in a self-employed role.
Once the Portage has agreed that the activity is suitable and provided they are legally able to work in France, a contract of employment will be established between the freelancer and the Portage. An employment contract with a Portage differs from the type of contract used for traditional employment in that it will generally not specify fixed working hours - hours are worked as and when the consultant chooses and will depend on how much work they can find or wish to undertake.
Portage contracts usually don't have a period of notice attached to them, so if the freelancer wishes to stop working or decides to set up as self-employed, they are free to do so.
The freelancer can set their own payment terms for each client. When the freelancer is ready to invoice a client, they forward the client's details and the amount agreed for the work to the Portage who will create an invoice and send it to the client.
- Invoices may be one off’s for jobs such as website design
- Or the freelancer may request that the Portage bills regular clients each month
The Portage will invoice the client for the amount the freelancer quoted for the work (the client pays no fees on top of this sum). The client then pays their invoice directly to the Portage who will calculate any expenses and deduct social and administrative charges before paying the remainder to the freelancer as a wage, and providing them with a detailed pay slip showing payment of social charges and hours worked.
Some Portages include a freelancers logo on the invoice sent to the client to maintain any brand image that might have been established with clients before moving to France.
Depending on the type of work activity and the operational costs involved, a certain amount of each invoice may be claimed as expenses and remain free of social charges, for example, fuel costs for journeys to meet with clients or Internet connection costs.
The Portage system allows the freelancer's clients to buy in their services on an "as needed" basis as if they were Freelance and therefore they do not take on any employer's obligations or responsibilities or have to become involved in any procedure associated with employing staff, such as making payments to URSSAF or having to establish an office in France. This gives workers the flexibility to carry out projects for clients based outside France who might not wish to become involved in the French employment system.
Social Charges and Tax
As soon as invoicing begins through a Portage, social charges are deducted from the income at source by the Portage in their role as employer and therefore there is no need to estimate these charges or pay any in advance; social charges due in connection with work are paid only on income earned. If work dries up or the freelance worker wishes to cease working for a period of time, then no social charges will be due in connection with their activity.
Employed persons in France must sign their own tax declaration each year for the year's earnings and pay their own income tax (Impôt sur le Revenue). People working through a Portage, like all other employees, are no exception, but the income tax return is generally less detailed than that of a self-employed person.
In 2006 the government simplified the procedure for salaried people by introducing a form ready-filled with information on the tax-payer's salary drawn from information sent by the employer. The new forms are called Déclaration de revenus pré-remplie. A Déclaration de revenus pré-remplie, should be sent to all workers each spring. It contains details of income earned between 1 January and December of the previous year.