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.
Good:
- 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.
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Could you explain why you say it is terrible as a prime income status? And I thought health coverage was 70 percent like everyone else, then you pay for your 'complementaire' to top it up if you wish?
ReplyDeleteAnother problem is that the status is always in flux because the French legislature keeps tinkering with it. So you really have to keep up with what's going on with the legislature. I found out about its latest attempt to impose stricter controls (i.e., more paperwork) on auto-entrepreneurs this past week from a posting on a translator's website. Luckily, it didn't go through.
ReplyDeleteHi Hal,
ReplyDeleteThanks for your comment. I agree 100%. I tell every AE I meet to keep their wits about them. You never know what the French government will throw at you. Laws and regulations can change over night. This is why I think AEs should invest in an accountant, pay for the annual membership to an Association Agréé (for example: http://www.cgapicpus.com/), or pay a visit to the Chambre de Commerce every once in a while to ensure they are always in the know about the inevitable changes.
Hi
ReplyDeleteI have the status as AE; when I arrived in France it seemed the easiest option; but the way you portray it it seems I may have overlooked something? I have tried to find a site that describes travailleur independent in detail, but I am kind off confused; isn't it just a lot of paperwork? I know that I cannot remain AE because if the limit on what you can earn, but it's very confusing this French system:)
Hi,
ReplyDeleteI'm a freelance teacher with auto entrepreneur status. I have just accepted a part time CDD position in a school, but will continue to have private clients. Can I run the two - IE the AE and CDD concurrently?
Thanks!
Hi Sam,
ReplyDeleteI'm afraid UR$$AF won't let you run an AE if you're already an IE. I tried starting an AE last year, and was immediately blocked from it (on the AE website) because they said I already had a SIRET as an IE. However, I was able to start an SARL with a different activity (a whole new ballgame that has kept me on my toes since).
If you are an AE, however, it's simple to change your status to IE. Can you open a different IE and still be an AE? I don't see why not, but check with URSSAF and get an accountant's advice before you do.
Thanks for your blog, much appreciated. I am an English person teaching TOEFL and management in an independent business school, and the manager has asked me to become auto ent. I don't have a social security number as yet, so is this actually possible for me?
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