How does a French umbrella company calculate my take home pay?
Portage, a creative alternative to self-employment
The pit falls of creating and establishing your own business are numerous. Portage (umbrella employment) offers a simpler solution.
Imagine being able to work as though you were self-employed but were also able to partake of benefits that are granted with employee status.
You get to negotiate your work hours, your work rates, work as you please and with the portage company settling your paper work for you, you now have more time to put into work and earn, earn earn!
With this kind of set up, it isn’t a wonder individual contractors, local and foreign alike, are opting to go portage.
The main difference between actual self-employment and umbrella employment however is the calculated take home pay. Umbrella employment involves a third party, an intermediary between the contractor and the client.
A portion of your contract earnings therefor will go to the umbrella company you have registered with. This fee compensates them for the services they provide you, like filing your paper work and invoicing your clients.
You may find yourself formulating questions in your head right about now on how it all works so we’ve put together an overview that would hopefully address your concerns on salary issues.
How much would I make as an umbrella employee?
It all depends on you. You are the game changer.
Most contractors fail to realise that the biggest contributing factor to the amount of salary they make are themselves — the amount of work they put it and the hourly/daily rates they set for their work.
The more work you do, the more money you take home.
Some find the concept of an umbrella company sharing in their earnings discouraging. But the portion they do take away goes to your taxes, other expenses so you won’t have to settle them yourself and the service they provide you, like doing your paperwork.
As well as the benefits that comes with being an umbrella employee. That sounds about as fair an exchange as they come.
So how much of what I earn goes to me and how much goes to the umbrella?
Portage salarial in France operates a little differently than their other European counterparts in terms of salary schemes. Most umbrellas have a fixed weekly or monthly rate, computed based on the employee’s negotiations with the umbrella.
In France, portage companies deduct a computed percentage of the client invoice for a specific contract. The percentage varies between umbrellas but it usually begins at around 8-10%.
This is more advantageous than fixed rates that are deducted irrespective to the amount an employee earns, especially for small sum contracts. On average, contractors take home 60-65% of their earnings. The more you earn, the less the deductions.
The beauty of this set up is that you only pay once you’ve made earnings.
To get a clearer picture of exactly how salary computations are made here in ABC Portage, get in touch with our team advisors today.
Where do my salary deductions go?
A portion of your salary goes to the umbrella, about 8-10%. Then social charges like taxes and national insurance are also deducted. The umbrella company also settles this for you.
For example, the client is billed € 20,000 by the employee. The umbrella company deducts its fees from the invoiced amount, say 10%.
The amount minus the portage fees of € 18,000 will then be subjected to income tax and national insurance what’s left will be the employee salary. Standard taxation laws apply. And a minimum of € 1,000 invoice is the general norm for most portage.
Don’t fret however the company ensures that you get the most out of your earnings by offering discounts.
There are many take home pay calculators available online if you really wish to know how it’s done. But to learn more about how tax and social charges are handled in ABC Portage, contact our experts now.
Can I claim expenses?
When you apply as an umbrella employee, yes you most certainly can. You are allowed to claim certain expenses especially if you take on site jobs. ABC Portage understands that some contracting jobs take the employee to numerous places and suffice to know, the company has got you covered. ABC Portage offers solutions.
Save your receipts because the legitimate expense claims range from hotel accommodations, travel expenses and even meals you may partake on your trips. Other expense claims can also be further negotiated.
For more information and inquiries on the benefits and rewards you can claim here at ABC Portage, reach out to one of our members today.
Be an umbrella employee. have the freedom of working freelance but enjoy the rewards and benefits of full employment and more.
Being an umbrella employee means:
- NO PAPERWORKS
- YOU CAN SET YOUR OWN HOURS AND RATES
- HAVE MORE TIME FOR WORK
- MORE WORK = MORE EARNINGS
- YOU CAN CLAIM EXPENSES