Social security contributions

… continuing the story.

Whatever the amount of money you make (and the way you earn it), you have to declare all your incomes . . . the best option ended up creating an independent activity as a micro-entrepreneur.

As briefly alluded in Becoming a micro-entrepreneur, the all point of creating my “company” was to declare my earnings from a one-time consulting activity. Certainly, the micro-entrepreneur status benefits from simple tax and accounting rules; still, this regime does not exempt you from tax. Uncle Sam (or Marianne in France?) wants his share! Here come the compulsory social security contributions

Introducing the URSSAF

This French organization – as suggested by its acronym, which means “Organizations for the Collection of Social Security and Family Benefit Contributions” – collects the social security contributions. In the case of a micro-entrepreneur, these contributions are based on the actual turnover. Each month or quarter, depending on your choice1, you must declare all your incomes and pay the corresponding taxes calculated as a percentage of your turnover: 22.7% in my case.

You have 30 days from the end of the accounting period (monthly or quarterly) to pay. However, a minimum of 90 days must elapse between the start date of activity and the first declaration. In other words, I had to make my first declaration at the end of the second quarter following the date of registration. Needless to say, that my turnover did not improve during this six-month period2.

Last, even though you have no turnover during an accounting period, you still have to make a 0 € declaration! No charge is payable, but you still need to make a declaration.

In the absence of turnover, you are required to make your online declaration and mention 0 for the period concerned (month or quarter). In the absence of a declaration, a penalty will be applied to you for each missing declaration.

Without benefit, yet…

Nevertheless, this unfortunate situation (i.e. “non-compensated jobseeker registered with Pole Emploi3 six months in the last eighteen months”) made me eligible for the ACRE (previously ACCRE). This early-activity exemption scheme allowed reducing your social security contribution. Instead of the 22.7% taxation, you will pay only 5.5%, 11.0% and then 16.5% of your income (the first, second and third year, respectively)4.

As a micro-entrepreneur, you can obtain, for three years, aid for the creation of a business (Accre) (Cerfa n ° 13584 * 02) if you are a job seeker or beneficiary of social minima.

Beware that you have 45 days maximum, after your declaration of activity, to file your request to the URSSAF. Generally, they decide within a month. Given my situation, their response was favorable.

To declare and to pay

In keeping with straightforwardness, you can (declare your income and) pay the aforementioned contributions either by mail or on-line. With the latter option, you benefit from the following minor advantages:

  • Free (no stamp)
  • Automatic calculation of charges from turnover
  • Direct debit from your bank account or payment by card

After logging in, I set up a direct payment from my bank, entered my turnover for the two previous quarters. The amount to pay was automatically calculated. I pressed ENVOYER and that’s it.

I was done (until the next quarter), and what is more, in good standing with the French tax system.

Of course, in addition to these two contributions, you also have to pay your income taxes. Now, given the ridiculous amount of money I made with my one-time consulting contract (not mentioning my unemployment without benefit), I didn’t have to worry about this one! Nonetheless, the declaration process was not straightforward. I will not get onto the subject because it’s not worth the hassle and, what is more, it’s not important for the connecting thread that will run through this mini-series.

To be continued…

1 When you declare your activity (see Becoming a micro-entrepreneur), you need to elect whether you will pay your social security contributions each month or quarter; I opted for the latter option. ^
2 As opposed to my profit! Indeed, I had to register my domain name and pay for my web host, among other expenses. Unfortunately, the micro-entrepreneur status doesn’t allow you to deduct your expenses. ^
3 Pole Emploi is a French governmental agency that registers unemployed people and provides (most of) them with financial aid. It is also supposed to help people find jobs. ^
4 At least, until very recently! Since April 2020, the new rates are as follow: 5.5%, 16.5% and 19.8%. Worse still; for the newcomers, the reduction is now 11% for one year only (instead of the previous three years). ^

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