Post by employee on Aug 29, 2023 2:33:10 GMT -6
Because he receives legal certainty through conventional regulations. The disadvantages of wage portage As seen above, wage portage is a solid alternative for starting out as a freelancer. But it should be borne in mind that there are some disadvantages that should be immediately considered. The significant cost of wage portage The first drawback relates to the costs of this legal status. Three main elements come into play, namely: Employer contributions. Employee contributions.
The commissions requested by the umbrella company. In view of the administrative, legal and accounting assistance, it is normal for the umbrella company to be remunerated in relation to the commissions it generates. Again, the rate remains free, but will generally be between 7 and 11 percent of your fee. To this UK Mobile Database must be added social security contributions representing approximately 75% of the net amount of fees. Concretely, if you invoice €20,000 in fees excluding tax to your client, the wage portage company will deduct its commission of €2,000 based on a rate of 10%. Employer contributions will amount to €5,600 compared to €2,900 for employee contributions.
As a result, you end up with a net salary of €8,500, but don't forget that this amount will then be subject to income tax. A formalism that must be respected Among the other disadvantages of wage portage, there is its formalism. Indeed, it is imperative to submit to the signature of three separate contracts: First, the contract for the provision of services. It allows to link the umbrella company with the consultant and the client. In itself, it is a traditional contract defining the terms of payment as well as the dates of the beginning and end of the mission. A second contract must be signed, this time corresponding to an employment contract. It concerns only the portage company and the employee carried. It is drawn up simultaneously with the contract for the provision of services, indicating a fixed duration during the mission period.
The commissions requested by the umbrella company. In view of the administrative, legal and accounting assistance, it is normal for the umbrella company to be remunerated in relation to the commissions it generates. Again, the rate remains free, but will generally be between 7 and 11 percent of your fee. To this UK Mobile Database must be added social security contributions representing approximately 75% of the net amount of fees. Concretely, if you invoice €20,000 in fees excluding tax to your client, the wage portage company will deduct its commission of €2,000 based on a rate of 10%. Employer contributions will amount to €5,600 compared to €2,900 for employee contributions.
As a result, you end up with a net salary of €8,500, but don't forget that this amount will then be subject to income tax. A formalism that must be respected Among the other disadvantages of wage portage, there is its formalism. Indeed, it is imperative to submit to the signature of three separate contracts: First, the contract for the provision of services. It allows to link the umbrella company with the consultant and the client. In itself, it is a traditional contract defining the terms of payment as well as the dates of the beginning and end of the mission. A second contract must be signed, this time corresponding to an employment contract. It concerns only the portage company and the employee carried. It is drawn up simultaneously with the contract for the provision of services, indicating a fixed duration during the mission period.