What is a Portage Salarial in France?
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A portage salarial is the French equivalent of an employer of record (EOR).
A portage salarial company, or EOR, does two things:
- It enables French contractors to earn money independently without creating their own business while entitling them to all the benefits of an employee.
- It allows companies to engage with French contractors without worrying about time-consuming administrative procedures or violating French employment law.
How does a portage salarial relationship work?
A portage organization employs French consultants on behalf of a hiring company, taking on all the responsibilities of an employer while ensuring that the business relationship between the consultants and client remains compliant with French law.
Benefits of a portage salarial for workers
A portage salarial provides French workers (salarié porté) with:
- Full statutory employment rights: The worker gains employee status, which entitles them to paid time off, unemployment benefits, healthcare, and worker protection
- Relief from tax responsibilities: The portage company takes care of all taxation, making income tax (Impôt sur le Revenue), health insurance, compulsory pension, and social security contributions on behalf of the worker
- Access to unemployment benefits: In case of dismissal or mutual agreement
- Financial security: The portage company arranges mutual insurance, income protection (prevoyance), liability insurance, and reserves income to cover periods of unemployment
- Minimum salary requirements: A portage salarial sets a minimum salary requirement of €30,204 annually
Benefits of a portage salarial for companies
A portage salarial relieves companies (entreprise cliente) of:
- Administrative duties: Every month, the portage company tracks working hours and time off, organizes medical visits, calculates payroll, deducts mandatory contributions, and provides the worker with a payslip and detailed cost breakdown
- Tax and benefits management: The portage company files all necessary taxes, pays mandatory contributions to respective authorities, enrolls the worker in mandatory social insurance (URSSAF), income protection (prevoyance), and affiliates employees with the compulsory mutual insurance scheme
- Terminating workers: The portage company takes care of necessary disciplinary actions and contract termination
Which workers can enter into a portage salarial arrangement?
The portage system is suitable for intellectual services that require professional qualifications, such as graphic design, IT, editorial, and marketing. The system is unsuitable for manual occupations, medical roles, hairdressing, work carried out by artisans, and work involving cleaning, gardening, or babysitting.
How do you enter a portage salarial arrangement?There are three steps involved in engaging in a portage salarial arrangement:
- The French consultant sources their own projects and customers/clients and agrees on a rate for their services. The consultant can work for several customers.
- The portage company ensures the activity is suitable for the arrangement and confirms the worker can legally work in France before establishing a contract of employment. The contract can be ongoing (Contract Duration Indeterminée (CDI)) or fixed-term (Contract Duration Determinée (CDD)). The maximum duration for a fixed-term contract is 18 months. New conditions must be renegotiated with the Customer after 36 months for the indefinite-term contract. Once the worker has signed the contract, they are an employee of the portage company.
- The portage company establishes a second commercial contract between the worker and the client company. This contract outlines the terms of the arrangement, which can be full-time, part-time, or one-off projects.
How does a portage salarial arrangement work?
Once all contracts have been signed, the worker can begin providing their services to the client company under the terms of the agreement.
The portage company maintains the legal employment relationship with the worker, giving both parties autonomy to manage the working relationship.
Once a month, the worker submits their hours and any time off requests to the portage company. The portage company uses this information to calculate payroll, deduct all mandatory contributions, file taxes, and provide the worker with a payslip and detailed cost breakdown of social charges and income tax.
In addition, the portage company collects a financial reserve of 10% of the worker’s pay (which can be reduced at the worker’s request). The reserve guarantees the employee has an income for periods where they do not have any work with clients.
Should the client company or worker wish to terminate the arrangement early, they must provide a notice period. The notice period depends on the type of contract signed. For ongoing contracts, if a mutual agreement is made with the employee the process involves a 45-day process. Notice for fixed term depends on the length of the employment agreement.
At the end of the employment relationship, the worker receives their financial reserve as a one-off payment.
How much does a portage salarial arrangement cost?
Typically, a portage company will charge a management fee of 7-10% of invoices processed each month to cover administrative tasks and insurance.
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