Portage salarial: the umbrella company model for freelancers in France

Portage salarial is a special form of employment involving a three-way relationship between a self-employed worker, his or her client and a portage salarial company. This form of employment enables self-employed workers to carry out their activities independently, but under the protective status of employees.

While retaining their autonomy and freedom, employees benefit from the advantages of French employment, such as general pension contributions and the right to unemployment benefit in the event of inactivity. As a portage salarial employee, you don't need to set up a legal structure: you delegate all administrative and accounting management of your business to your portage salarial company.

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What is “portage salarial”?

Portage salarial is a three-way contractual relationship between a contractor, a portage salarial company (EPS) and a client company. In concrete terms, the contractor signs an employment contract with a portage salarial company and becomes its employee. When the contractor finds a client, he or she negotiates the terms of the service — duration, tasks, rate, and so on — directly with the client. The portage salarial company and the client company then sign a service contract that sets out the negotiated terms.

The portage salarial company takes care of the administrative and accounting side of the business, in return for a management fee.

How does portage salarial work?

There are three distinct relationships involved in portage salarial:

Between the portage salarial company and the salaried consultant: they are bound by a fixed-term or a permanent employment contract. The contractor is considered an employee of the company.
Between the portage salarial company and the client company: they are bound by a service contract. This defines the terms and conditions of the services to be provided, and the fee.
Between the employee and the client company: the employee carries out assignments for the client company as agreed in the service contract.

Portage salarial companies handle all administrative management related to their contractors' assignments, in exchange for a management fee. The employee contributes to the general scheme and can benefit from the advantages and protection offered by French employment.

Since 2015, the legal framework has been strengthened. The signature of the portage salarial collective agreement in 2017 ensures a more stable and secure environment.

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The “société de portage”: a French umbrella company

What is a French umbrella company?

A French umbrella company is not only a service provider for companies, but also the contractor's employer. In order to help contractors develop their business, the company provides tailor-made support and makes its resources and structure available to them. Contractors remain totally free to choose their assignments and clients.

In return for carrying out administrative, legal and accounting tasks on behalf of its employees, the portage salarial company charges management fees.

Obligations of the portage salarial company

Portage salarial companies must comply with a number of rules:

They have exclusive rights to the practice of portage salarial.
They invoice the client on the basis of the terms agreed between them and the contractor.
They pay the contractor a salary, after deducting the various social security charges and their own expenses.
On behalf of the freelancer, they must take out professional liability insurance.
At least once a month, they create and make available to the employee an activity account and a payslip.

Failure to comply with these legal obligations may result in sanctions.

The different types of employment contract

Portage salarial companies are governed by the French Labour Code and the collective agreement on portage salarial.

Permanent and fixed-term contracts are the two most common types of employment contract in portage salarial. They differ mainly in terms of duration and termination terms.

CDD (fixed-term contract): suitable for short assignments

Total limit of 18 months.
End of contract via scheduled end date, early termination or resignation.

CDI (permanent contract): suitable for regular assignments, bank loans or property rental projects

Open-ended contract.
Termination by end of trial period, mutual termination or resignation.

9 advantages of working with OpenWork

Time saving

The main advantage of portage salarial is that you can concentrate 100% on your assignments. You delegate all administrative, legal and accounting tasks to your future employer. All you have to do is declare the number of days you work.

Pension and unemployment contributions

Since you are legally an employee, you therefore contribute to the same pension and unemployment funds as any other employee. This means you can draw unemployment benefits between assignments, and build up a decent pension — a problem for many freelancers today. OpenWork also offers a PERCO savings plan.

Healthcare insurance

When you join OpenWork, you automatically benefit from a high-performance mutual insurance plan at a negotiated rate. You can choose the plan that suits you best, depending on your personal situation.

Access to training

OpenWork has forged two partnerships with M2I Formation, France's leading provider of IT, digital and management training, and BM Formation, which offers customized cross-disciplinary training in IT, office automation, communication, management and languages.

Network of entrepreneurs

Joining OpenWork means joining a family of over 1,000 entrepreneurs who have opted for independence and peace of mind.

Access to CE (travel, leisure, culture)

OpenWork's freelance consultants have access to the works council and a wide range of discounts:

Vouchers (Amazon, Fnac Darty, Decathlon, Ikea…)
Leisure (bowling, museums, zoos…)
Good deals (perfumes, gym…)

Obtaining a mortgage or a lease

It is well known that banks, owners and freelancers are not a good match. The absence of permanent contracts and payslips is often a huge obstacle to obtaining a loan or renting an apartment, especially since borrowing rates have risen. In portage salarial:

You are entitled to a permanent contract.
You receive payslips.
You get a year-round salary smoothing to show regular income and stability to your banker.
You have a strong case to present to the banks, which facilitates your real estate project.

Meal vouchers, gift vouchers, culture and CESU

Salary optimizations paid with reduced or no social charges. Meal vouchers are available on request from your advisor, on the Swile card.

Universal service employment vouchers (CESU) are intended for people who use personal assistance or home services: gardening, childcare, and so on. They allow the individual employer to pay for home services simply and securely, and the expenses incurred are eligible for a tax credit for all individual employers, whether or not they are taxable.

Gift vouchers can be requested up to €200, for the list of events established by URSSAF. Culture vouchers only give access to cultural goods — museum visits, concerts, and so on. Gift and culture vouchers are tax exempt if they meet all eligibility requirements.

Business and retirement savings plans (PEE and PERCO)

Two employee savings plans are available at OpenWork.

The Company Savings Plan (PEE) is for the consultant who wishes to build up a securities portfolio. It works as a second bank account on which investments can be made: the consultant makes a first payment, then the umbrella company pays in the desired amounts. Payments are capped at 25% of annual gross income, up to €3,604.50.

The Collective Retirement Savings Plan (PERCO) is intended for those who wish to build up retirement funds. As with the PEE, the first payment is voluntary, then the umbrella company pays in the desired amounts, up to €7,689.60 per year.

The amounts paid into the PEE and the PERCO are matched up to 300% — the maximum allowed by law — by the umbrella company, within the limit of three times the initial payment. The PEE is blocked for at least 5 years and the PERCO until retirement, with exceptional early-release conditions for both.

The cost of a portage salarial company

Of course, a portage salarial company has its costs, which can be divided into three categories:

Employee and employer contributions: all employees pay these, without exception. They are used to finance your unemployment, pension and health insurance…
Management fees: this is what the umbrella company deducts from your invoice amount to pay itself. It is generally a percentage of sales.
Fiscal and parafiscal taxes: these are compulsory taxes that are added to the amounts deducted from your invoice amount. Some structures include them in their management fees. Example: CVAE, medical examination…

Over and above these costs, it is more useful to look at the reversion rate, that is, the percentage you have left on your sales. The average reversion rate in the sector is around 50%.

Example: on a turnover of €10,000, with a reversion rate of 50%, you get back €5,000; with a rate of 45%, you get back €4,500…

Minimum billing for contractors

A minimum wage is set by the collective agreement on portage salarial, to which all serious umbrella companies must be affiliated. This amount must enable the freelance consultant to earn a gross salary corresponding to 75% of the Social Security ceiling for a full-time equivalent.

In terms of day rate, OpenWork recommends a minimum of €250 daily rate.