What is Payrolling, also called “Wage Portage” in Switzerland? Part 1/2

Have you ever heard of Payrolling, also known as “Wage Portage”?

Payrolling, a service proposed by our Umbrella Company, is booming in Switzerland.

It is a form of employment that offers many advantages for both long-term and short-term contracts and is equally suitable for both:

  1. Individuals wishing to become self-employed
  2. Companies wishing to work with staff without having to hire them

It allows you to work in a very flexible way and to reduce administrative, accounting and legal constraints.

It is based on a legal framework that allows a person to be employed by an Umbrella Company which is providing the payroll service such as Thalent.com and to contribute to social insurance while negotiating mandates with clients in a completely independent manner.

1. As an autonomous, independent person:

The main advantage is that you can work as a self-employed person but with the status of an employee and this without having to set up a company.

You benefit from full social security coverage, because you become an employee of the umbrella company but manage your projects and clients in a completely independent way.

  • You are fully covered by social security: unemployment insurance, (OASI/DI, AVS/AI, AHV/IV) pension, 2nd pillar LPP, accident insurance, maternity benefit, etc.
  • You benefit from paid holidays
  • You avoid all the time-consuming compulsory administrative tasks that self-employed workers have to take care of
  • You can concentrate on your business without having to worry about accounting, legal and administrative operations

We speak of a hybrid status for the payrolling person who is using wage portage. This way of working can be used by anyone who is entitled to work in Switzerland.

At Thalent.com we call the freelancer who is using our payroll services, a Consultant.

2. As a Swiss or foreign company

If your company is looking to recruit one or more employees for a short or medium-term assignment, payrolling or “wage portage” allows you to:

  • Avoid having to increase the number of permanent employees in the wage bill
  • Establish service contracts with consultants with expertise that you do not have in-house
  • Work with consultants based in Switzerland
  • Free you from payroll and employee management tasks
  • Reduce the tax costs of your operations

The contractor, or as we call him the Consultant, who is using the payroll service is employed by our Swiss Umbrella Thalent.com and performs a service for you. He does not have the status of a self-employed person and you do not need to hire him.

Thalent.com sends you an invoice at the end of each month for the services performed, which you pay as when you would pay any service company or supplier.

By using external payroll service providers, your company avoids many restrictive and time-consuming administrative procedures and will be able to optimise its project outsourcing strategy.

3. Thalent.com services for the Consultant

These are the services that Thalent.com covers for the consultant :

  • Salaried employment contract (fixed-term, open-ended or hourly)
  • Invoicing and reminders, VAT management
  • Reimbursement of travel and related expenses
  • Free advice for customer contracts
  • Relations with the tax administration, the inhabitant and working permits office
  • Paid holidays
  • Withholding tax
  • Full social security cover with a choice of options for the LPP pension fund, 2nd pillar :

AHV: Old-age and survivors’ insurance

AI: Disability insurance and income compensation benefits

AAP: Occupational Accident Insurance with SUVA and supplementary insurance

AANP: Non-occupational accident insurance at SUVA and supplementary insurance

RC: Adapted professional liability insurance

MUV/AMat/MUV: Maternity allowance

ALV, AC, ALV:Unemployment Insurance

OP/LPP/BVG: Pillar 2 pension fund with a full choice of options among the plans available from the CIEPP Fund of the Fédération des Entreprises Romandes (FER).

4. Contracts and 3 party relationship

Wage portage implies a 3 party contractual relationship:

  1. The Consultant, the person who is Payrolling and performing the service 
  2. The “client” company
  3. The Wage Portage or Payroll company, such as Thalent SA for example

This tripartite relationship involves 2 contracts:

  • A contract of employment between the freelance Consultant and the Umbrella Company
  • A service contract between the “client” company of the freelance Consultant and the Umbrella Company

As a Consultant, you are legally employed by our payroll company and perform services for the “client” company. You receive a salary and Thalent SA pays the social insurances (employee and employer’s share) as well as other mandatory charges.

As the “client” company, you are invoiced by the umbrella company which will also take care of all the various administrative tasks on behalf of the Consultant who is using the Payroll services.

5. Salary of the Consultant, treasury, payment of client invoices

As the Consultant, you send the umbrella company at the end of each month an activity report that will serve as the basis for invoicing the “client” company.

The umbrella company will then pay you your net salary which is calculated from the amount invoiced to the “client” company, after deduction of employee and employer charges and deductions regarding withholding tax if applicable.

As for a self-employed person you can calculate your salary using our salary simulator.

The payroll umbrella company receives the payment of the invoices, but Thalent will pay you at the end of the month, before the client has paid his invoice. This means that you receive an advance on your salary because the client has not yet paid.

This cash advance is therefore an advantage, because you do not have to wait for your client’s payment to receive a salary.

Not all umbrella companies give this cash advance but with Thalent.com you will benefit from it automatically.

6. Jobs and sectors

Payrolling works well with a multitude of jobs and sectors:

Information Technology

Engineering

Consulting

Linguistics and translations

Environment

Marketing and communication

Home Office, Remote Working

Digital

Quality Control and Quality Assurance

Training

Human Resources

Coaching

Sales and Business Development

Management

Accounting and Fiduciary

You can find the The second part of this article here on our blog.

Besure to regularly check our homepage and follow us on our social networks for more information regarding payrolling and becoming an independent consultant. If you like our posts we would be thankful if you could give us a like on Linkedin or Facebook!

Author : Kamil Fetouni

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