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What professional expenses in wage portage?

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Professional expenses are the costs incurred by an IT consultant during their assignments (travel expenses, meals, accommodation, etc.). In wage portage, these expenses can be covered by the umbrella company and deducted from client billing before calculating the consultant’s salary. As such, they are exempt from tax and social contributions: a true lever for optimizing income. However, URSSAF keeps a close watch by setting limits on these expenses that reduce taxable income. Consultants must therefore be vigilant about the reality and justification of their expenses. This begins with understanding their nature.

What are professional expenses in wage portage?

In wage portage, "professional" expenses cover all expenses incurred by a consultant for the needs of their professional activity. Broadly, there are two main categories of professional expenses:

  • Expenses attributable to a specific IT assignment, which are billed to a specific client "to the euro," via an expense report,
  • Expenses that concern the consultant’s entire activity, which cannot be attributed to a particular client, and part of which is charged to the umbrella company.

IMPORTANT NOTE: This second category will be largely discussed in this article.

Expenses attributable to a specific mission (also called "mission expenses")

These are expenses incurred by the consultant during a well-identified service for a specific client.

Typical examples:

  • Travel expenses to visit the client;
  • Hotel stays and meals taken during this mission;
  • Rental of specific equipment necessary for the IT mission...

These expenses are directly related to the execution of the mission and are therefore "reimbursable" by the concerned client. They will appear on a separate line called "reimbursed expenses" or "disbursements." More often, they are subject to an expense report. The client will then reimburse this expense report "to the exact amount," upon presentation of receipts. For the consultant, these expense reports are fiscally and socially neutral: they will not be counted in their turnover nor subject to contributions. They are not income, just "flows" that transit through their billing.

Expenses concerning the consultant’s entire activity (also called "operating expenses")

These are expenses incurred by the consultant for the general needs of their professional activity, without being related to a specific mission.

Typical examples:

  • Software, telephony, and mobile Internet;
  • Professional contributions;
  • Training expenses;
  • Travel and accommodation expenses for business prospecting...

These expenses obviously cannot be billed to a client; they do not concern a specific IT mission. They represent operating costs of the activity. They will be covered by the umbrella company and deducted from the consultant's turnover before calculating their remuneration.

This deduction allows the consultant to avoid paying social charges and taxes on these amounts. But not everything can be deducted; there are strict limits (Urssaf scales for meal, travel, and accommodation expenses; a ceiling of 20% of the monthly net turnover for other expenses).

What is the issue with "operating" professional expenses?

Let's take a concrete example to understand the issue of expenses charged to the umbrella company. Suppose an IT consultant in wage portage bills a client for a service of €5,000 excluding tax. To carry out this IT mission, they incur €500 in professional expenses (travel, accommodation, equipment, and others).

If these €500 are considered as a personal expense (option 1):

  • The declared turnover will be €5,000;
  • Social contributions and taxes will be calculated on €5,000;
  • The consultant will receive their net salary based on €5,000, then pay their €500 expenses;
  • Their final net income will therefore be reduced by €500 + the related contributions and taxes.

If these €500 are covered by the umbrella company (option 2):

  • The declared turnover will be €4,500 (5,000 - 500);
  • Social contributions and taxes will be calculated on €4,500;
  • The consultant will receive their net salary based on €4,500, without having to pay their expenses;
  • Their final net income will therefore be higher, as the €500 expenses are exempt from deductions.

We can see the benefit of this expense coverage by the umbrella company: it allows the consultant to optimize their net income – by several thousand euros per year! This highlights the importance of properly qualifying professional expenses in wage portage: ensuring they are not assimilated to salary, legally and fiscally. This involves flawless traceability (receipts, statements...) and compliance with exemption rules and limits.

Are there limits to the expenses a consultant can charge to their umbrella company?

Yes, URSSAF keeps a close watch. It has indeed set limits on the expenses a consultant can have covered by their umbrella company. The objective? To prevent abuses and excessive optimizations: by setting exemption limits, URSSAF regulates practices and limits the possibility of "artificially inflating" expenses to reduce taxable income.

URSSAF's scales are supposed to correspond to average expenses actually incurred, based on statistical studies. They are therefore sufficient to cover real expenses in most situations. Beyond the limits, contributions are due, which avoids excessively penalizing social security revenues.

To be clear and detailed, note that URSSAF scales apply only to professional expenses that meet two cumulative criteria:

  1. They are not billed to the client (thus covered by the umbrella company);
  2. They fall into the expense categories for which URSSAF sets exemption limits.

In practice, there are four main categories of expenses that are concerned. Let's see which ones.

1. Meal expenses

When you are on a business trip outside your company (i.e., outside your usual workplace), outside an IT mission, you can deduct your meal expenses. For 2024, the maximum deductible amounts are €20.70 per meal. In practice:

  • if you have lunch for €18 during a business trip, this amount will be entirely deducted from your turnover and exempt from social contributions.
  • if your meal costs €25, only €20.70 will be deducted and exempt. The €4.30 excess will be reintegrated into your salary and subject to contributions.

2. Accommodation expenses

Similarly, when you have to spend a night at a hotel during a business trip, you can deduct your accommodation expenses. The limits for 2024 are €63.20 per night in the Paris region and €46.80 per night in other departments.

3. Travel expenses in a personal vehicle

If you use your personal vehicle for business trips, you can deduct kilometric expenses (or kilometric allowances, IK). Kilometric expenses in wage portage depend on the fiscal power of the vehicle and the number of kilometers traveled. For a 5 CV car, the IK in 2024 is set at €0.468 per kilometer up to 3000 km.

Example: for a business trip of 100 km in a 5 CV, you can deduct €46.80 (100 x 0.468). This amount will be exempt from charges.

If you deduct more, for example, a flat rate of €0.60/km, the part beyond the scale set by URSSAF (here €0.132/km) will be subject to contributions.

4. Flat-rate allowances for long trips

If your mission takes you away from your home for more than 3 months, you can benefit from flat-rate allowances to cover your expenses on-site. The amounts related to a Long trip (> 50 km or 1h30 journey from your home) vary depending on the duration of the mission and the geographical area, with a decreasing deduction.

In practice, this allows you to deduct and exempt a significant part of your accommodation and food expenses during this period. Amounts beyond the deductions will be reintegrated into your salary and subject to contributions.

Hence the importance of having your umbrella company issue a mission order as soon as you leave for more than 3 months, to secure this favorable regime.

And for other expenses?

Other expenses exist but do not fall into any of the categories with a specific URSSAF scale (meals, accommodation, travel). In this case, the 20% of the monthly net turnover rule applies.

The principle is as follows: each month, you can deduct these expenses from your net turnover, up to 20% of this turnover. The deducted part will be exempt from social contributions and income tax. If your expenses exceed 20% of the turnover, the excess part will be reintegrated into your salary and subject to contributions.

In practice, the main types of expenses concerned by this 20% limit are:

  • Equipment and material expenses (computer, phone, printer, software...);
  • Office supplies (stationery, consumables...);
  • Documentation and monitoring expenses (subscriptions, book purchases...);
  • Office expenses (if you rent an office for your activity);
  • Communication expenses (landline, Internet, postage...);
  • Professional contributions (un

ions, associations...);

  • Reception and representation expenses (client reception, business gifts...).

With a little monitoring, this 20% rule is a valuable tool to increase your net salary effortlessly. By anticipating your recurring expenses and spreading them over the year, you can easily gain several hundred euros per month.

Weepo can help you set up monitoring tools and alerts to make the most of this 20% leverage. Feel free to seek our advice; it is also our role to support you in the tax optimization of your IT consulting activity!

To learn more about regulations:

What financial guarantee in wage portage?

What collective agreement in wage portage?

Wage portage and paid leave: everything you need to know

Sick leave and wage portage: what are your rights?

Are there training rights in wage portage?