Why choose Freelance as a business model?

Both statuses share a characteristic dear to all freelancers: autonomy! Whether you are a salaried employee or 100% freelance, you choose the missions to be carried out, the category of clients to work with and you fully manage your schedule.

However, in the match between employee portage VS freelance, each status has its advantages and disadvantages. Before choosing the legal form adapted to your needs and your activity, let’s take the time to analyze each criterion.

Also read: How does freelance administration work?

Social protection

The first round of the duel portage salarial VS freelance takes place in the field of social protection.

When a freelancer creates his company, he is affiliated to the Sécurité Sociale des Indépendants (SSI, formerly RSI). In terms of protection, this means that he benefits from :

• Health insurance
• Daily benefits in case of illness or accident
• Parental leave benefits
• Basic pension insurance
• Family allowances
• Training rights

The employee does not create a company. He signs a fixed-term or open-ended employment contract with a freelance administration company. He benefits from the same social advantages as all the others. And it must be said that these are often higher than for a freelancer working under a more traditional legal form.

For example, the freelance employee contributes more to the complementary pension scheme. For the same remuneration, he will receive higher amounts than the freelancer. Moreover, freelancers who have opted for the SASU or the EURL do not receive any pension rights if they do not pay themselves a salary. Those who have opted for the other statutes must earn a minimum turnover to validate quarters (between €9,120 and €12,304 annually, depending on the nature of the activity).

The right to unemployment

In addition to the above-mentioned benefits, the freelancer benefits from the unemployment insurance which guarantees him/her benefits in case of loss of activity. The amount of this allowance, as well as its duration, is fixed according to the last salary and the duration of the contributions.

In total, an employee can receive up to 256.96 € gross per day, over a period of 2 years maximum.

In order to receive a self-employed worker’s allowance (ATI), similar to the employee’s unemployment insurance, the freelancer must also meet numerous conditions. In addition to having been in business for 2 years and having generated a minimum of €10,000 in activity, he or she must be “unemployed” following a receivership or judicial liquidation.

In terms of compensation, he can claim a maximum of 800€ per month (26.30€ per day) for a maximum of 6 months.

Contribution rates and remuneration

In freelance administration, as in freelancing, you look for clients yourself and you negotiate the rate of your services. The remuneration thus depends on the missions carried out.

However, the freelance worker is paid by the portage company which collects the payment of the invoices for each service. This remuneration generally amounts to 45 to 60% of his turnover before tax, after deduction of social security and tax charges as well as management costs.

Being subject to the minimum wage, the self-employed worker can therefore receive €2,637 per month, even during the slow periods.

A freelance micro-entrepreneur pays a percentage on his turnover, which is lower than the contributions due in portage :

• 13.80% of the turnover for the sale of goods.
• 23.7% for commercial or artisanal services.
• 24.2% for liberal professions and other services.

For equivalent incomes, therefore, they can claim a higher income.

For most other statutes, the URSSAF contribution rate is about 46% of the profit. Here again, the remuneration received can therefore be more interesting than in wage portage, with equivalent turnover.

Good to know : in micro-company, you have to respect turnover limits (94 300€ for the sale of goods, 36 500€ for the provision of services), while in wage portage you have no limit.

To find out what your income would be if you became a freelancer, do a simulation using the income simulator of our partner ITG.

Other charges and professional expenses

In the match between freelancing and freelancing, let’s talk about the other expenses related to the activity!

As we have just seen, the freelance employee has to pay more social contributions than the freelancer. But the latter is subject to other charges such as corporate tax (depending on the legal form chosen) and the business property tax (CFE).

As for professional expenses, they are deductible from the activity by the employee, as they are by the self-employed (except if he/she works under the micro-enterprise regime). This makes it possible to reduce the charges to a certain extent.

Civil liability insurance

To become a freelancer, the professional can choose between many legal statuses, of which the most known are :

• Sole proprietorship
• EIRL (Individual Limited Liability Company)
• EURL (Single Person Limited Liability Company)
• SASU (Simplified Joint Stock Company)

None of these statutes automatically includes a professional liability insurance. Even if it is not mandatory, it is strongly recommended whether you are a consultant, developer, writer or freelance graphic designer.

Indeed, no matter what your expertise is, you are not immune to disputes with your clients. This can be contractual disputes or damages (unintentional!) caused during your services. In creative professions, you can also be confronted with conflicts related to intellectual property.

Depending on your profession, your turnover and the location of your activity, professional liability insurance premiums can range from 15€ to 50€ per month.

On the other hand, some freelance administration companies include the subscription to a professional liability insurance in their management fees. The advantage is that you don’t have to worry about it. The disadvantage is that you cannot choose your level of coverage and protection.

Portage salarial VS freelance : what about autonomy ?

Regardless of the status, you remain a freelancer. The choice of assignments, your rates, your offers, the hours and the place of work is yours.

Even as a “salaried employee”, there is no link of subordination between the self-employed person and the “portage” company. The latter can accompany him in the prospection or the research of missions, but the last word belongs to the freelance. He negotiates the costs and the terms of his services with the client.

Even if you decide to change your freelance company or status (in one way or the other), you keep your client portfolio. You can even sell it to another professional when you stop your activity.

Administrative management

When you start your freelance business, beyond being your own boss, you also become your own accountant. You have to manage all the administrative tasks concerning your activity:

• Keeping detailed accounts
• Send invoices, verify payments, manage unpaid reminders
• File your accounts with the clerk’s office once a year
• Declare your turnover to the URSSAF and pay your quarterly contributions
• Declare and pay VAT monthly or quarterly

All of this can be a challenge for the freelancer without the required skills. Not to mention that these time-consuming tasks interfere with your core business. As a result, you spend less time on value-added activities, such as prospecting, client follow-up and improving your services.

The reality is different for the ported employee! The management fees deducted by the freelance administration company serve to spare you all the administrative procedures and bookkeeping.

Even the drafting of the contract is taken care of by the freelance administration company, according to the agreements negotiated with the client beforehand. And it is always the company that sends the invoice at the end of the service and reminds the client in case of late payment.

The ported employee therefore spends more time carrying out assignments and looking for clients.

Portage salarial VS freelance : support against isolation

Being a freelancer also means choosing to run your business alone. No superior or colleagues to advise you, encourage you or accompany you in your thinking. Of course, this “only master on board” aspect has many advantages… But the limits arise as soon as you face a block, whether it is at the time of creating your company or years later, when it comes to evolving.

Of course, there’s nothing to stop you from networking elsewhere. You can attend professional events, go to seminars, work in co-working spaces, join discussion spaces dedicated to your business on LinkedIn or Facebook, etc.

In freelance administration, in addition to these networking actions, a dedicated consultant helps you develop your business. In addition, freelance administration companies also organize training workshops and meetings between freelancers, allowing you to get out of isolation. These meetings also offer an opportunity to expand your client base.

Our tip for choosing

If you are apprehensive about your transition to freelancing, freelance administration may be the solution. This hybrid status allows you to benefit from the security of an employee and the autonomy of a freelancer. On the other hand, if you like total freedom and you feel ready to fully stand on your own two feet, the different legal forms existing in France should meet your expectations.