Using a wage portage company to become an entrepreneur or self-employed worker has its advantages and disadvantages. In this article, we wil...
Easy payment for services
Using an umbrella company is considered the easiest way for an entrepreneur to get paid for their products and/or services. Once the registration process is complete, all he needs to do is submit his timesheets signed by his client on time. The umbrella company will take care of the rest and ensure that it is paid on time.
Simple registration
Registration with a wage portage company involves certain standard procedures, including the communication of a certain amount of personal information. This information is necessary for the organization to legally process your payroll. Once you have provided them, you should read the documentation that the umbrella PEO company sends you. It is composed of the employment contract, the employee handbook, etc. Then, all you have to do is submit your timesheets while carrying out your missions with your clients.
Continuity of employment
When you join a PEO, you can benefit from job continuity. This is a big advantage, especially on your salary. You can take on multiple missions with different clients and earn more. Your umbrella company will officially remain your only employer, but you will be guaranteed to receive wages for each client. This is very handy if you are looking to obtain financings such as a contractor's mortgage or a bank loan.
Low costs
Compared to hiring an accountant to help you with a limited liability company (SARL), signing up for an umbrella company is cheaper.
An umbrella company charges a margin to process your payroll and this applies each time you are paid (usually weekly, bi-weekly or monthly). Each umbrella company treats pay the same way and the only thing that varies between providers is their margin (between 5 and 20%).
Therefore, look for a PEO company with a low margin, as you will keep more of your salary. The margin rates of wage portage companies are generally between 5 and 20%.
Compliance with the tax regime in force
Umbrella companies process payroll in accordance with the French tax system. This means that all tax deductions and mandatory contributions are made by the PEO. The entrepreneur thus has nothing to do, and in addition, nothing to fear for his tax obligations.
Ability to switch between wage portage and SARL status
At some point, an entrepreneur may find themselves without any activity. One of the real advantages of umbrella companies is that you can use them for a longer or shorter period of time. In addition, switching from wage portage status to SARL status is easy. Many contract accountants will also offer a general payroll service. So, look for a wage portage company offering all the security and coverage in the event of unemployment.
Ideal for first-time entrepreneurs
If you're new to the idea of being an entrepreneur and want to make your way into the world of entrepreneurship or freelancing, hiring a PEO is a lot less hassle than setting up an LLC. You can join a PEO company to ensure a steady paycheck and work at your own pace.
Benefits of an umbrella company
By joining a wage portage company, you become their employee. As an employee, you are entitled to the social benefits in force in France, including health coverage and insurance, including civil liability insurance.
Free coverage and insurance
Most PEOs will include free coverage and insurance for their employees. The most common types of insurance that PEOs include are professional liability insurance, employers' liability, and health insurance. The amount of insurance provided will vary depending on the PEO.
Employee reward program
Only a limited number of PEOs offer an employee reward program. This is usually a "bonus" rather than a benefit. But, it would be incomprehensible to say that it is not one.
Employee reward programs allow employees to take advantage of special offers. Most often, these offers include meal vouchers, discounts when shopping online, bonuses, and more.
Faster same-day payments
A majority of PEOs process payroll using payment systems that allow contractors to receive their payments faster. This means that contractors will receive the funds the same day the PEO receives them from the end customer.
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