Sunday, September 4, 2011

Auto-entrepreneur (a wolf in a sheep's clothing?)

I have been called, cornered and accosted by teachers over the past several months asking me to compare the travailleur independent status and the auto-entrepreneur status.

While I am not an auto-entrepreneur (and cannot become one because I'm already a travailleur independent) I've listed a few pros and cons below following an email conversation I had with a teacher.

Being an auto-entrepreneur has its good and bad sides.

  • The social charges can't be beat - you pay 22% in social charges and don't pay income tax on top of that.  That beats being CDD, CDII and Travailleur Independent
  • You can charge "pre-charges patronales" prices.  For instance, as a CDII teacher, the going rate per hour is about 22 brut.  However, as an auto-entrepeneur, you could bill the school as much as 35 an hour because they won't be paying any social charges on your salary.   - Ask them about that.
  • You have to bill the school and keep track of your bills (and be very very organized).
  • You can't charge any business expenses (metro, lunch, etc).
  • You get very little health coverage.
  • You need to be able to understand the government website to become an auto-entrepreneur which is in French, sign up and report your income to the government.
  • And most importantly:  the auto-entrepreneur status was set up to allow for already self-sufficient professionals and students to have an income on the side. It was not designed for people to live off of as their prime income.  So, if you do this, I strongly suggest you juggle other contracts that are CDD, CDII, CDI, or that you have a spouse who has a CDI. 
Again, it's great to have on the side, but terrible as a prime income status.