So, what is wage porting?
Wage porting is a hybrid work system: mid-way between being self-employed and being a salaried employee. In simple terms, it makes it possible to develop an independent professional activity while preserving a traditional salaried employee’s social protections.
In the past, it was primarily for executive managers (seniors) with a certain level of expertise who were making a professional transition, and testing the market before going freelance. As such, it was considered a tool for insertion, returning to work, or business creation. And so, the role of the wage-carrying or umbrella company was only to transform the carried employee’s professional fees into wages.
Today wage porting is seen as a product that meets new socio-economic needs as well as the expectations of both businesses and workers, especially in terms of flexibility and autonomy. Created for practical reasons, its legal framework was constructed to meet labour market requirements far removed from the inflexibility of social law. The role of the umbrella company was strengthened so as to offer greater guarantees to carried employees. It’s not surprising that wage porting has continued to develop, as it is an efficient tool which presents numerous advantages to both carried employees and businesses.
How does work porting work?
Wage porting relies on a three-party partnership: with the carried employee, the client, and the wage porting, or umbrella company which has an intermediary role between the first two.
- The consultant finds a job or assignment with a client. They agree on the terms of the assignment, its length, and the fees. Obviously, you can call on our Insitoo Freelance Business Engineers to find an assignment!
- The consultant then contacts an umbrella company. The two parties sign a contract. The role of the umbrella company will now be to convert the professional fees into wages, for a commission. The signed contract is a CDI, a permanent contract, which ends when the consultant no longer has an assignment.
- The umbrella company and the client also sign a business contract. The umbrella company will then invoice the client for the carried employee’s fees.
Advantages
If wage porting is successful today it’s because it allows the consultant to have both the advantages of working independently and those of a salaried employee.
As a carried employee, …
- You work independently and organise your time directly with the client. But independently does not mean alone: the umbrella company is also there to support you.
- The umbrella company handles all administrative tasks: you save time and avoid accounting and tax chores!
- You have the same social protection as a traditional salaried employee: you’re still covered by French social security, you make payments to the different retirement, health insurance and unemployment funds. Further, you can sign up for the company’s supplemental health insurance plan.
- You’re covered by civil liability insurance and so you’re protected against everyday risks.
- You get a monthly paycheck: you don’t need to wait for your client to pay the bill!
- And like a traditional employee, you earn professional training (CPF) hours and have access to the different training sessions offered by OPCA, the French vocational training fund.
- And when you don’t have an assignment, you can apply for unemployment compensation.
What can a carried employee earn?
There are numerous advantages to wage porting and salary levels is one of them! In fact, one can count on a 30% increase in revenues (in the IT sector) when choosing to work in this manner So how does it really work?
The carried employee’s pay comes from the billings generated by his/her activity at the client’s. Consequently, it varies every month depending on the number of days worked. For example, if you go on vacation for ten days, your pay will be divided by half compared to a month where you work twenty days. In that respect, wage porting is a good exercise before moving on to freelancing. Carried employees are forced to manage their cash flow and anticipate expenses.
You also need to remember that the services billed by carried employees finance their pay. That means that social charges, as well as employer charges or business expenses are deducted from their billings. It’s good to know that within the scope of their assignment, carried employees can get compensation for lunch or travel expenses.
It’s also necessary to take the umbrella’s management fee into account when calculating pay, but that’s the one and only cost of wage porting
The Insitoo Porting Offer
Insitoo Portage is an Insitoo Group company. It is a wage porting company which meets all legal requirements for porting (exclusive activity, insurance for payment guarantees).
For over ten years, we have offered wage porting services to all our IT and business consultants, who represent our primary activity. Our management fees equal 7% of the consultant’s billings. In exchange for which we guarantee:
- quality support and administrative follow-through for all your procedures.
- management of your professional expenses.
- monthly payment of your salary.
- contact available every day of the week to answer different questions you may have
- total transparence on all sales prices and margins.
And the little extra something… The close relationship Insitoo Portage has with Insitoo Freelance means bouncing back quickly with a new assignment when the current one is completed.
Want to learn more? Want to see what you could earn? Don’t wait any longer. Contact our team. They’ll be happy to reply.