Umbrella employment in France : Definition

Umbrella employment is a tripartite contractual relationship. It involves a carried consultant (the freelancer), an umbrella employment company, and a client company where the carried employee performs a service. This status stands out from others as it is a compromise between independence and salaried employment. The contractualization of this relationship occurs in two stages:

  1. The employment contract between the umbrella employment company and the carried employee resembles a conventional employment contract (permanent or fixed-term, managerial or non-managerial, including health insurance). The employment contract nevertheless incorporates the methods of calculation and payment of remuneration (L1254-21). The major difference is that periods without providing services to a client company are not remunerated (L1254-21-ll). An umbrella employment agreement is sometimes proposed as a preamble to the employment contract.
  2. The mission contract: consists of 9 clauses ensuring, in particular, the ownership of the contract to the carried employee (L1254-23). The contract is generally drafted by the umbrella company due to these specificities. The service contract includes the terms of service performance by the carried employee on behalf of the client company. The carried employee does not necessarily have to sign but must be informed of its content.

⚙️ Functioning

Umbrella employment is based on 3 simple principles:

  • The carried consultant has complete autonomy over all of his or her assignments. He or she negotiates directly with the client company regarding the nature of the mission, its duration, and its price.
  • The consultant then signs a service contract with the client company and a temporary or permanent employment contract with the umbrella employment company.
  • Finally, the umbrella employment company takes care of invoicing the fees to the client company and prepares a payslip for the carried employee.
  • At the end of the assignment, the consultant may request a mutual termination agreement to qualify for unemployment benefits.

⌛️ The 5 Steps to Becoming a Carried Employee

5 step to becoming a carried employee

1 – Find a Mission

The first step on the path to independence is to find a mission with a client. You will have all the cards in hand to negotiate your terms, your daily rate, the duration of the mission, and specific clauses. If you’re not yet confident in finding a mission, you can consult our guide on this subject.

2 – Find an Umbrella Employment Company

Once you have found your client, you can choose an umbrella employment company. This will allow you to obtain your independent status in less than 24 hours. However, be careful when making this choice, as several factors are important:

  • The management fees of the umbrella company (ranging between 2% and 12%)
  • Transparency of fees (prefer a company labeled “Zero Hidden Fees” by the FEDEP’s)
  • Quality of service to the carried employees (you can refer to Google reviews and feedback from former collaborators).
  • Also, inquire about the benefits you can enjoy (Employee Share Ownership Plan, Collective Retirement Savings Plan, meal vouchers).

Once you’ve settled on an umbrella company, they will have you sign an employment contract. They must also have you sign an umbrella agreement that includes:

  • Its management fee commission
  • And any other fees that might apply and their calculation (be vigilant about this in your choice of company).
  • The various services offered by the company and their costs if necessary.
  • Finally, you will also find a clear breakdown of your salary.

3 – Sign a Service Contract with Your Client

Once your employment contract and the umbrella agreement are signed, all that’s left is to formalize. The umbrella company will therefore contact your client directly to have them sign the service contract, which will then be returned to you for verification and signature.

Points to be aware of regarding the service contract in umbrella employment include:

  • The conditions for carrying out the service
  • Its duration
  • Your remuneration
  • Specific clauses (non-compete, non-solicitation of customers, etc.).
  • The financial guarantor
  • The name of the insurer
  • You can also include clauses for early termination of the service

The client may also wish to work with their service contract: In this case, at Régie Portage, we ensure that we rework this contract to adapt it to the formalism of umbrella employment. Indeed, it often happens that standard client contracts do not contain all the information specific to this solution.

4 – Complete Your Mission

With the legal and administrative aspects wrapped up, all that’s left is to complete your mission according to the terms of the contract. At the end of each month, you will be asked to fill out an activity report. It summarizes your working time, specific conditions (remote work, miles traveled, meal allowance, etc.). At Régie Portage, the activity report is generated automatically, and the task is further simplified; every type of package is taken into account (hours, days, package deal).

Invoicing and reminders in the case of non-payment are handled directly by the umbrella company. So you don’t have to waste time in time-consuming exchanges with your client.

5 – The Umbrella Employment Company Converts Your Revenue into Salary

The goal of the umbrella company is then to transform your billing into a payslip. You thus receive each month your payslip and an activity account. These clearly detail the charges, management fees, and any additional costs you may have.

💪 The Strength of the Umbrella Employment Status

An umbrella employee at work The Security of Permanent Contract

The major advantage of employee status is the protection that it entails. When you switch to umbrella employment, you sign a permanent contract with your umbrella employment company. Therefore, you benefit from social protection, contribute to unemployment and retirement.

Additionally, you also benefit from a provident fund, a company mutual insurance, and professional liability insurance.

At Régie Portage, the umbrella employee benefits from AXA’s mutual insurance and provident fund with salary maintenance from 3/3/30 days in the event of accident/hospitalization/illness.

The Benefits

The umbrella employee can also benefit from a range of advantages depending on the umbrella employment company.

At Régie-Portage, it is possible to obtain:

  • Restaurant vouchers worth €10 per day
  • Gift vouchers and culture checks
  • CESU tickets (personal service)
  • PEE (Company Savings Plan)
  • PERCO (Retirement Savings Plan)


One of the assets brought by the permanent contract is better financial solvency. The security of the permanent contract thus allows you to take out a loan more easily. It’s also a good asset when you are looking for accommodation, especially as a tenant!


To train, an umbrella employee has 2 options:

  • Go directly through their personal training account (CPF).
  • Or ask their company to fully finance the training.

Use Their CPF

In the case of full-time work for a year, the umbrella employee receives 500 euros in their CPF account. They can use this budget as they see fit, and the umbrella employment company does not intervene in the process.

Training Financing by the Umbrella Employment Company

An umbrella employee can request full funding for their training after 3 months of seniority. They can make the request whenever they want or during their annual follow-up interviews.

When it is the umbrella employment company that finances the training, there is no budget ceiling. The only constraint is that the training must be related to the employee’s activity. It can be used to develop their skills or pass a certification requested by a client, for example.

Note: It is not possible to do hybrid financing between CPF and the umbrella employment company. For example, if the employee has 1000 euros in their CPF and wants a 1200 euro training, the umbrella employment company cannot supplement the remaining 200 euros. But it can finance the entire training, and the employee keeps their 1000 euros!

At Régie Portage, the amount of training allocated is not deducted from the umbrella employees’ activity account. Some non-labeled umbrella employment companies “Zero Hidden Fees” charge these expenses to the employees’ activity account.

📃 Umbrella Employment Contracts

Permanent and Fixed-Term Contracts in Umbrella Employment

Except for rare exceptions, the employment contract in umbrella employment is a permanent contract (CDI). The fixed-term contract (CDD) has become rare since the ordinance of April 2, 2015. Permanent or Fixed-Term? A frequent question in umbrella employment.

However, the permanent contract (CDI) is now the norm in umbrella employment in 2022. Indeed, the fixed-term contract (CDD) has many more disadvantages than the CDI: rigidity, minimum term, financial solvency, unemployment, etc. Therefore, it is increasingly rarely used.

Yet, the 2016 industry report counted only 44% of CDIs.

The Service Contract

The service contract is a commercial contract that formalizes and secures the relationship between a client and their provider. This contract includes the obligations of both parties. The diversity of the service market makes it impossible to use so-called “standardized” contracts.

On the client company’s side, the service contract is a factor of various risks. Indeed, the risks include:

  • Contract requalification
  • Illicit lending of labor and offense of illicit brokering
  • Beware of the “restitution rate” that is sometimes practiced to the detriment of the freelancer’s compensation.

An umbrella employment company transforms the invoicing of an umbrella employee’s missions into a salary. The umbrella company uses its accounting expertise to optimize its employees’ income. Invoicing is transformed into salary after deduction of:

  • Management fees (commission + CVAE + taxes and insurance)
  • Social contributions

Caution Point: Some umbrella employment companies practice a “restitution rate,” often to the detriment of the freelancer.

Management Fees (Commission + CVAE + Taxes and Insurance)

Management fees = 5% capped commission + taxes and insurance

The Commission

Taxes and insurance include professional liability insurance, financial guarantee, unpaid invoice guarantee, and CVAE. Beware, these contributions are often hidden in the employer’s charges or the activity account (as authorized by amendment No. 2 of the Collective Agreement). At Régie Portage, taxes and insurance are passed on at 1.5% of the turnover. They are indicated in the employment contract and deducted from the activity account statement.

These are the fees on which the income of umbrella employment companies is based. The calculation of these fees depends on the companies, and it’s a key point to watch when choosing an umbrella company. They are generally between 4 and 10% of the umbrella employee’s gross invoicing. Some umbrella employment companies operate with decreasing rates depending on invoicing, favoring only high salaries…

At Régie Portage, we have chosen to set our rate at 5% of the turnover, with a cap at 600 euros. This rate does not change regardless of the billing level.

CVAE and Taxes and Insurance

In addition to the 5% management fees, an extra 1.5% is added for taxes, insurance, and CVAE.

Social Contributions

In umbrella employment, the umbrella employee bears both the employer and employee social charges. These charges finance social security and are necessary to benefit from unemployment, retirement, or supplementary health insurance.

Here’s the detail of these two items:

  • Employer Charges

    The first thing to know is that employer charges are not a fixed rate. They are linked to different thresholds based on an employee’s gross salary level. Thus, there are 4 different rates as indicated below. Be careful, though, the rates do not include any benefits and are at the lower end.

  • Employee Charges

    The calculation of employee charges is a little simpler. It represents 22% of the umbrella employee’s gross salary (about 28% of the net salary).


The Expected Net Salary

The net salary, excluding charges and benefits, is between 45 and 55% of the turnover. The variation depends on the management fee rate and the desired salary amount. Indeed, the employer charges are decreasing and can be optimized depending on the desired salary.

Example: A consultant invoices 20 days at €500 excl. VAT per day, i.e., €10,000 excl. VAT. He receives €5,146 net salary before taxes after deducting €650 in management fees and €4,204 in social contributions. Input/output simulation carried out in June 2022 without any fees or benefits.

Zero Hidden Fees Label delivered by FEDEP'S

The Zero Hidden Fee Label

Régie Portage is a company labeled Zero Hidden Fees by an independent financial audit by the FEDEP’S. This means that the clarity of the accounts and the absence of hidden fees have been verified.

📆 The Daily Life of the Umbrella Employee

Activity Report or CRA (Compte Rendu d’Activité)

The activity report (CRA) is a reporting tool used to justify all the work accomplished over a period by a consultant or umbrella employee on behalf of their client. The activity report is used by managers or clients of the consultant. It serves to verify time and workload, productivity, and the progress of an ongoing project. However, it should not be confused with an activity report. In the case of umbrella employment, the CRA provides the necessary information to establish the salary of the umbrella employee.

How the CRA Works

The collective agreement of umbrella employment stipulates that it must be completed monthly. The CRA must report on the activity carried out over the past month. Once completed, it must be validated by the umbrella employment company. It thus constitutes the main obligation of an umbrella employee during the course of a mission. Thanks to this document, the umbrella employment company can take into account its benefits, leave, remarks, etc.

It therefore has a double advantage for the umbrella employee:

  • It ensures clarity of information when converting the umbrella employee’s invoicing into salary.
  • It also acts as a safeguard for the employee’s health. How? By allowing the umbrella employment company to monitor the employee’s workload, project management, and to avoid risks related to burnout (burn-out, stress, etc.).

Financial Reserve

The financial reserve is a topic poorly addressed by umbrella companies that seek to hide it from umbrella employees until their first payslip. However, it is a measure taken by convention and applies to the entire sector. But what is its purpose?

The financial reserve represents a 10% deduction on your billing, regardless of the amount. It is then set aside by your umbrella company. This reserve will be used to settle your conventional termination when you leave the umbrella company.

Activity Account

Once the deductions, salary, charges, and financial reserve are deducted; the umbrella employee has an activity account into which the surplus is paid, allowing them to have a reserve of available and non-taxable funds as long as they do not leave the activity account. For those with substantial billing, this presents a real advantage to optimize the financial side of their activity.

Indeed, they can invoice as much as they want while keeping an effective salary at the minimum (to avoid paying too many employer charges) and keeping this surplus billing sheltered. Like the financial reserve, the activity account allows them to pay themselves a salary during slow periods.

Your activity account is completely transparent, and you are informed of its amount every month through the activity account statement.

  • The activity account statement is like a bank statement; it summarizes all debits and credits for a month in progress for an umbrella employee.

Activity Account Statement

In the case of umbrella employment, there is also the activity account statement. It should not be confused with the activity report, as these two report documents do not have the same utility or content. The activity account statement is like a bank statement; it summarizes all debits and credits for a current month for an umbrella employee. It includes expense reports and invoices, the cost of the payslip (with deductions and charges, etc.). The umbrella employee thus has a view of their financial reserve, leave, salary, etc.

Professional Expenses in Umbrella Employment

The activity of an umbrella employee usually generates costs inherent in the activity. These costs are varied and require a detailed explanation.

When embarking on umbrella employment, unlike the status of a self-entrepreneur (or micro-business), it is possible to benefit from reimbursement of professional expenses. There are different types of expenses. The reimbursement of these professional expenses is not subject to social contributions. This presents itself as an advantage to optimize your net salary!

At Régie Portage, for example, the deductible VAT on professional expenses is directly credited to the umbrella employee’s activity account.

Exclusions from Umbrella Employment

Umbrella employment, also known as wage portage, does not apply to all fields and professions. Here’s a look at some of the key exclusions:

1. Regulated Professions

Regulated professions such as lawyers, accountants, notaries, doctors, etc., are excluded. These professions have specific regulatory frameworks and cannot be exercised under umbrella employment.

2. Personal Services and Trading Professions

Personal services and professions that involve negotiation (buying and reselling) are also excluded from umbrella employment. This is in line with the specific nature of these jobs, which may not fit within the structure and legal compliance of umbrella employment.

3. Minimum Billing Requirement

The legislation for umbrella employment also imposes a minimum billing requirement to access this type of work arrangement. The minimum is a billing of 250 euros per day or 35 euros per hour. Professions with low revenue are therefore automatically excluded.

4. Experience and Education Requirements

It is also necessary to have at least 3 years of significant experience in one’s field or, alternatively, to have at least a level equivalent to a Bachelor’s degree (Bac+2). This ensures that those utilizing umbrella employment have the necessary expertise and qualifications.

Umbrella Employment Professions

In the realm of professions allowed under umbrella employment, four categories of services can be distinguished: Consultation, Training, Audit, and Expertise. While there are specific cases outside these fields, these are the most widely represented in umbrella employment.

Each of these categories can be further broken down by professions or by sector of activity. A comprehensive list would be too long to describe here, as no fewer than 820 professions are represented.

Certain umbrella companies specialize in a particular type of profession or service, while others are more generalist. For example, at Régie Portage, 95% of employees are spread across the Construction, IT, and Transition Management sectors.