Portage Salarial

According to recent figures, there are around 3 million freelancers in France. As freelancing continues to grow in popularity, there has been an increasing demand for flexible legal structures that support the industry. 

Portage salarial offers a uniquely French solution. This tripartite employment structure provides employee protections and independence, giving freelancers the blend of support and freedom that they need.

So, what is portage salarial? This system essentially allows freelancers to be employed by a portage company. The portage company handles payroll and invoicing. Meanwhile, the worker is a self-directed consultant. However, because they are operating under the umbrella of the portage company, they get to have employee status and benefits.

There are three key parties in portage salarial.

• Salarié Porté: This is the French term for the worker in the portage salarial system. 
• Portage: The portage company is the provider that handles payroll and gives the worker their employment status. They may also provide standard benefits, such as the right to disconnect, paid leave, and workload revision meetings. It is also the worker’s source for rupture conventionnelle, which grants them unemployment benefits.
• The Business: Businesses can employ the freelancer without worrying about unintentionally violating French laws.

There are a few key steps involved in the portage salarial system. First, the freelancer and the business sign an agreement with each other.

Next, the portage company signs either a contract duration indeterminée or a contract duration determinée with the freelancer. Contract duration indeterminée is for ongoing relationships, while contract duration determinée is a temporary employment agreement. Non-disclosure agreements and other agreements may also be signed.

At this stage, the worker must be signed up for mandatory social insurance (URSSAF) and income protection (prevoyance). The portage can also help the freelancer find the right complementary health insurance (mutuelle).

Once the portage company and freelancer have signed an agreement, the portage company invoices the business. Any disciplinary actions, time-off tracking, and freelancer terminations happen through the portage company. Additionally, the portage company is responsible for handling social security, withholding taxes, and paying the freelance consultant’s salary.

From that point on, the portage company is responsible for calculating payroll, removing deductions, and giving the worker their pay slip. The portage company must turn in mandatory contributions and taxes to the French authorities.

As the business, you must sign a standard commercial agreement at the start of the portage salarial relationship. If you decide to end the relationship, you generally have to give one month’s notice. However, it’s important to remember that the Portage Salarial relationship is only intended to last up to 36 months. Once you reach the 36-month mark, the French authorities typically expect you to switch to a permanent, direct employment relationship.

Portage salarial is often confused with EOR, but the two models are fundamentally different.

Portage salarial is a tightly regulated French framework designed for independent, autonomous consultants or freelancers who want to work for multiple clients while being administratively employed by a licensed portage company. Under this system, the consultant must remain fully independent, cannot be managed or supervised by the end-client, and the portage company must comply with strict rules such as maintaining a 10% financial reserve and holding a specific government license.

An EOR, on the contrary, is a “regular” employer that hires workers on behalf of a foreign company so they can work exclusively for that one client, under that client’s direction. Because this setup is incompatible with the autonomy and multi-client requirements of portage salarial, compliant EORs, such as Deel and Borderless AI, do not operate under the portage salarial model in France. Instead, they employ workers directly under standard French labor law (such as the Syntec CBA), which is the only legally sound structure for EOR services.

While each portage company is different, there are a few common services that are typically offered.

• Payroll and Payslip Issuance: The portage company will handle payroll calculations and give the worker a payslip that lists all of their mandatory contributions.
• Social Security and Pension Contributions: Portage salarial is an important tool because it gives the worker access to the French social security system, pensions, and health care. Additionally, the portage provider is responsible for handling the freelancer’s income taxes (impôt sur le revenue).
• Expense Management: The portage company tracks all of the salary costs and other expenses involved in hiring the worker. Then, the business is given a convenient invoice that breaks down all of the costs. 
• Employment Insurance Coverage: Through the portage company, the worker receives important unemployment benefits. Often, the portage salarial will deduct around 10% of the worker’s salary to help cover months when they have fewer freelance projects, ensuring that the worker has a consistent source of income.
• Professional Liability Insurance: Besides offering payslip and expense management services, the portage provider also provides liability insurance. This helps to mitigate your company’s risks.
• Contract Management: A major reason to work with a portage company is for their contract management. They ensure all of the right employment contracts, NDAs, and other agreements are signed, so you are legally protected.

Because of France’s unique employment laws, it is essential to have professional employment support before you hire French freelancers. In turn, French freelancers and independent consultants also benefit from this type of relationship. Using portage salarial is ideal for the following types of companies and freelancers.

• Freelancers who want to work independently but don’t want to open a business
• Global businesses that want to hire French workers without the permanent establishment hassle
• Senior professionals and consultants in engineering, IT, marketing, and other industries
• Companies that want to gradually expand into France and aren’t ready for the legal burden yet
• Foreign professionals who are interested in short-term work assignments in France
• Professionals near retirement age who want a simplified administration process for independent work

As an independent freelancer, there are a few important benefits to using portage salarial. This type of system essentially allows you to become an auto-entrepreneur, so you don’t have to worry about registering a business. Instead of getting distracted by the administrative burden, you can focus on the work you do best.

While you don’t have to deal with the legal hassle of operating a business, portage salarial allows you to have all of the benefits of legal employee status. This means you can access pension rights, health insurance, and unemployment insurance if you need them.

Although there are many benefits to this type of French employment model, there are also drawbacks you should be aware of. For instance, portage salarial income is subject to full payroll taxes. Because of this and legal employment requirements, it isn’t ideal for low-income freelance work. 

If you have the income and administrative ability to start your own business, you’ll have more flexibility by being fully self-employed. Under a portage provider, you have a limited selection of services and options. 

While the convenience of outsourced administration is significant, it also carries a cost. With most portage providers, you can expect to pay management fees that make up 5% to 10% of the payroll amount.

Besides portage salarial, there are a few different self-employment models that can be used if you want to go into business on your own.

Auto-Entrepreneur (Micro-Entrepreneur)

 
An auto-entrepreneur, also known as a micro-entrepreneur, has more flexibility than portage salarial offers. However, auto-entrepreneurs are responsible for handling all of their own invoicing, tax payments, and social contributions. You are also required to register yourself, although this is a fairly simple process.

It’s important to note that there is a turnover threshold of €77,700 per year for professionals who provide services and €188,700 for people who provide goods and accommodation services. These levels are based on revenue, so it’s fairly easy to end up over the maximum threshold.

Auto-entrepreneurs are essentially a simplified sub-type of entreprise individuelle (EI). In this model, the business owner has unlimited liability for debts. Unlike an auto-entrepreneur, there aren’t income caps on who can form an EI.

Limited Liability Companies (Société à Responsabilité Limitée (SARL))

This type of option is popular for small- and medium-sized businesses in France. It is a flexible business model, but you’ll typically need to have at least two shareholders. Once the business is formed, the shareholders are only liable for debts that equal their investment amounts.

With an SARL, corporate taxes must be paid. You are also required to go through a formation process, with specific forms and fees involved. Once the SARL is created, it is a legal entity. Unlike portage salarial, you (or the SARL’s employees) will be responsible for paying taxes, calculating payroll, and other administrative tasks.

If you do want to set up a company with just one owner, you can use an Entreprise Unipersonnelle à Responsabilité Limitée (EURL). This type of option allows you to hire employees if you want to. Then, your EURL is in charge of all of the employment duties and administrative responsibilities of running a business.

Traditional Employment

 
For some individuals, a traditional employment relationship is the easiest option. While you don’t have the same freedom over your work hours, income, or projects, being hired as an employee means you don’t have to deal with the administrative and legal burden of self-employment. You also don’t have to pay a portage salarial’s fees or spend time worrying about having to switch contracts every 36 months when the portage salarial term ends.