Wage portage: what taxes?
Of course, wage portage frees you from many administrative constraints. Nevertheless, a carried employee must meet certain obligations. Tax payment is one of them. It is important to know all the rules of financing and wage portage remuneration. If you are considering getting into wage portage, you would probably like know the taxation applicable in a wage portage contract or the amount of your taxation. We will try to answer all your questions throughout this wage portage guide.
What types of taxes are applied in wage portage?
Although he is an independent consultant, a supported employee remains a company employee. Since 2019, any freelance worker who have opted for wage portage is subject to the same regime tax than an employee of a company. Having the same tax status that a traditional employee, a self-employed person is therefore not subject than to direct income tax. This is automatically deducted every month directly from the salary paid to the employee.
It should be noted that the self-employed and auto-entrepreneurs do not are not subject to the same tax regime. Knowing that the auto-entrepreneurs can both receive BNC (benefits not commercial) and BIC (industrial and commercial profits), the withholding tax does not always apply to them. Thus, the tax administration adopts ** an installment system ** consisting of deducting a percentage from the turnover made.
How is the amount of taxes in wage portage calculated?
To calculate the amount of payroll tax, simply multiply the tax rate by the tax base. This the latter is obtained by subtracting social security contributions from the salary raw. In some cases, the employer's share of the complementary health and non-deductible expenses can be added to the gross salary. For to be clear, here is the formula: (gross total salary - contributions social security + non-deductible CSG/CRDS) x tax rate.
In addition, at equal salary, a raised employee will pay the same amount income tax than a traditional employee since the calculation is based on the same formula. However, for a supported employee, the net salary taxable will greatly depend on the number of days worked in the year and the average daily rate (ADR). The latter corresponds to average amount of compensation paid by the client for a day of work.
Wage portage and taxes: what are the different tax rates?
With the arrival of the withholding tax, the self-employed who have opted for the status of employee in wage portage have the choice between 3 main types of tax rates:
- the neutral tax rate;
- the individualized tax rate;
- the personalized tax rate.
Let's take a look at their features and how they work.
The neutral tax rate
Aimed primarily at employees who have just come to integrate a wage portage company, the neutral rate is applied to the first net taxable salary. It is explained by the fact that the tax authorities need the following declaration to communicate to the portage company the precise rate to be applied.
The carried employee can decide to maintain the neutral rate if he wish that the carrying company does not know its rate of taxation. Indeed, it is an indicator of income, an element personal that you probably wouldn't want to communicate.
The individualized tax rate
The individualized tax rate is applied to all employees worn who have not chosen the neutral rate. Depending on the situation overall household tax rate, the individualized tax rate is updated every year when filing your income tax.
An individualized tax rate also makes it possible to apply a taxation in proportion to the income received by the employee and not by the couple. It is therefore an interesting option for an employee carried married or PACS.
The custom tax rate
Allowing you to have a withholding tax, the rate personalized tax applied in relation to declared income the previous year. Thus, the withholding tax rate allows avoid outstanding balances or refunds.
Knowing that a self-employed worker in wage portage can be subject to significant variations in income, it is recommended to perform a modification of the personalized rate. For this, he will have to go to the personal tax management area.
Can we reduce the amount of our taxes in wage portage?
Unlike micro-entrepreneurs, the self-employed in wage portage have the possibility to deduct the costs professionals taxable income. The net taxable salary will be therefore lower since the amount of these costs will escape the calculation tax. It is therefore a means for a carried employee not to pay taxes on expenses incurred in a professional capacity.
Apart from business expenses, fixed assets are another way to reduce the amount of your taxes in wage portage. He these are business expenses that can be consumed immediately such as meals, office supplies or even the hardware. Again, you can avoid paying taxes and charges for your business expenses.
In any case, avoid at all costs using fees professionals to cover your personal expenses. In fact, you you will have to regularly provide your expense reports to the company of wage portage. This will strictly control your operating costs while the client company will verify meticulously your mission expenses. These two entities will ensure systematically that your professional expenses comply with the rules of the URSSAF.
Wage portage and micro-enterprise: which is the most interesting in terms of taxes?
Compared to a micro-enterprise, wage portage can be more interesting in terms of taxation. As we have just mentioned, a employee has the possibility of deducting his professional expenses, which allows him not to pay taxes on his expenses professionals. This deduction of business expenses is not accepted in micro-enterprise. Indeed, a micro-entrepreneur is taxed on its turnover. Be aware that a tax allowance of 34 % is applied for liberal activities.
In addition to the amount of income tax, a self-employed person has interest in comparing the different legal regimes in relation to the benefits they offer. For example, it is true that certain professional expenses are also tax deductible in EIRL. On the other hand, the social security cover offered to an employee is much more advantageous than that of a manager of an EIRL. In in addition, for the same amount of income tax, wage portage usually offers better social protection.
Wage portage and taxes: who manages the withholding tax?
Since January 1, 2019, these are portage companies salary who are required to deduct monthly income tax straight from the source. They are also responsible for donating to tax services and to declare the amount of the employee's income carried to the tax administration. This greatly simplifies the filling of the annual tax return.
In addition, wage portage offers considerable time savings in tax management. Unlike micro-entrepreneurs or freelancers with their own business, an umbrella consultant employee does not have to deal with managing the collection of his tax. All this is directly managed by the wage portage company.
Like any employee, the self-employed worker who has opted for the wage portage has the possibility of adjusting its deduction rate on the tax website. And although the tax return is provided by the wage portage company, the employee carried remains in the obligation to declare his income himself annually.
Wage portage and taxes: how to declare your income from work?
Whether they reside and practice in France or abroad, an employee whose revenues come from France is required to achieve its annual tax return. The procedure is quite simple and can be done online via the impots.gouv.fr portal. Here are the steps to follow :
- Access the Cerfa 2042 document by going to the "declare" category of your personal space. This document is often pre-filled since the data on your professional income is in principle sent directly to the tax authorities.
- All you have to do is make sure that the information entered in the "wages and salaries**" section corresponds to the net wages paid by referring to your payslips. In case of inconsistency, be sure to make the modification directly by changing the amount indicated.
- And if you are a salaried employee and you carry out another activity under the status of self-employed company, it will also be necessary to check that the turnover indicated corresponds to the declarations made to the URSSAF.