French Pay slips

Each time an umbrella company receives payment for the consultant’s work, it processes the tax deduction and management fees to then send the net salary to the consultant. At ABC Portage, we offer absolute certainty in terms of compliance and administrative issues. In essence, we offer clients hassle-free workers.

ABC Portage will work on the payslip and forward it to the consultants. Usually, payslips are broken down to display the Gross Taxable Pay, Deductions or Adjustments and Additional Information.

• Gross Taxable Pay

The element of the amount paid to the worker for their service is called Gross Taxable Pay. This is subject to Income Tax and Employees National Insurance. The GTP is made up of a Commission Payment, an Hourly Rate Payment and a Holiday Pay allowance.

• Deductions or Adjustments

Refers to the amount deducted from the Gross Taxable Pay, which includes Income tax, Employees National Insurance, any personal pension contribution and the administrative fee umbrella companies charge. There could also be other deductions that need to be included here such as student loan payments or attachment of earnings, etc. ABC Portage is held responsible before French legal tax and administrative authorities.

Social Taxes

Unlike most European countries, where the social security system is financed through general taxation, the French system is funded through social security contributions. The level of these contributions is rather high for employers, employees or self-employed. In fact, it is one of the highest in the world.

There are three main types of personal taxes in France:

• French income tax
• Social security contributions
• Tax on goods and services

The social security contributions are collected by the state to fund France’s welfare system. These charges are split between the employer and the employee, with employers paying around 40–45% and most employees paying around 20–25% of gross earnings. The employer deducts the money from the salary every month while the self-employed pays around 40% of their earnings in social charges.

For umbrella companies, the rate is around 33%. When clients decide to work with umbrella companies, they no longer have to worry about compensations and payments for insurance, taxes, etc. The umbrellas do all the administrative part of the job and business customers just pay for the service.

Umbrella companies’ fee

As explained, umbrella companies charge a fee for acting as intermediaries and managing all administrative tasks. The Commission Payment is calculated from all the payments received during each assignment the consultant performs.

In France, the “portage salarial” operates somewhat differently from other European countries, where most umbrellas have a fixed rate – either weekly or monthly.

Umbrella companies operating in France deduct a percentage of the client invoice for a specific contract excluding taxes. This scheme is more beneficial for consultants than fixed rates that deduct without considering the amount an employee earns, especially in cases of contracts of small amounts.

At ABC Portage, we follow a declining scale going from 10% to 3%, depending on the recurrence of the missions. Our rates are as follows: