Teleworking in France

[Solong]

If this has been answered before, please forgive me and point me at the correct post. I currently live in England (sympathy needed) and work for an established UK company as a teleworker. 2 of my colleagues have moved to the US and to Australia and continue to telework (they remain employed in UK even though domiciled in US or Aus)- the company pays them their salary gross and they pay all their local taxes, health insurance etc. How would this work in France? I want to move permanently to France but it has been suggested that the UK company (which is remaining in UK and which does the bulk of its business in UK mostly for UK government departments) will need to open a French pay roll and pay the French employer's Taxe Sociale contribution - is this the case? (if it is, then the costs to the company I work for make my moving to France seem to be a non-starter). Note: I do not own any part of the company, nor am I a direcor or even shareholder, I am simply a salaried employee who teleworks.

[Albert the InfoGipsy]

I'm sure someone more knowledgable will come along, but my understanding of the rules is this.

If you remain an employee then the company must set up a French subsidiary to employ you.

The alternative is for you to go freelance and work for the company on an invoicing basis.

Ignoring the costs of setting up and administering the subsidiary, I'm pretty sure that the total tax and cotisations (equivalent to NI) would be higher for the employee route than the freelance one. Typically independent workers in France reckon on paying the government half their earnings or a bit less (43% is floating at the back of my mind), whereas the combination of worker & employer contributions & taxes comes to about 60% of salary.

From the sound of things, if you want to stay salaried then it's a non-starter. The question is: how important is being a salaried employee compared to working as a freelance. This question applies to both you and the company. They may have a policy of not using freelances or you may have considerations like pension rights to take into account. I'd personally be less inclined to give importance to job security because (a) I don't think it exists any more and (b) I'm not sure how (or whose) legislation on the subject applies in such a case.

Out of interest, what sort of work do you do?

 

[Will]

What Albert says is pretty much correct. Though I would point out that the charges he mentions are those for social security etc - income tax is totally separate and is paid in the following year, whether you are salaried or freelance (there is no PAYE yet in France).

Another alternative is to work for a portage company, which effectively gives you the same benefits as a salaried employee, except you are employed by the portage company, which invoices the overseas company for which you do the work. This is the easiest option, as you do not get involved in very much of the considerable bureaucracy that is part and parcel of working in France, but possibly the least attractive financially as you still have to cover the social security charges plus the portage company's commission. 

Unless you are working for a company that is bad at paying its bills - which would make the portage option attractive - or your employer is prepared to set you up as a French subsidiary company, with all that entails, I would definitely say that the freelance option, with a good accountant to handle the paperwork and keep your taxable income low, is the way to go. And that is speaking from experience of doing the same thing myself.

 

[Solong]

Hi to you both and thank you for the answers, as Albert says, staying employed seems to be a non starter. Your idea of the portage company idea doesn't excite me greatly, seems like adding another layeer of outgoings to an otherwise potentially heavy outgoing system anyway. Freelance has its attractions but is not something that I had gone into before - the prospect of setting up seems quite scarey, but, again, that is simply because I've never looked at it before, presumably you have to declare yourself to the French authorities as self-employed? Is there any problem with invoicing into another country? Steve

[creusedweller]

Hello, Solong

I'm in exactly the same situation as you, having moved to France in August, and having gone through the same agonies as you. I opted for the portage company. The advantages are: a) your company in the UK is likely to baulk at setting up a subsidiary in France. It is an horrendous process and very expensive. You would need to be inexpendable to them to get them to agree to do it; b) By going through a portage company, you keep your job security with your UK employer AND have the benefits (including unemployment benefits) which comes from being a French salaried worker. Whether self-employed or employed through a portage company, the cotisations (National Insurance payments) in France are swingeing. I took a look at my whole lifestyle package and decided the price was worth paying. I may opt for self-employment in the future, but as an interim measure, I do recommend the portage route.

Good luck.