It is now possible for micro-entrepreneurs to have their spouse or partner working for the business while paying fixed social charges. This article gives you an overview of how conjoint collaborateur works, as well as its advantages and drawbacks.
Micro-entrepreneur, also called auto-entrepreneur, is a sole trader registered under one person's name. As such, you cannot have free help from a member of your family. This person would have to be declared as an employee (for instance via Titre Emploi Service Entreprise TESE with URSSAF) for casual or irregular work, or be added as conjoint collaborateur for regular ongoing work.
What is conjoint collaborateur
A conjoint collaborateur is a spouse or PACSed partner wanting to be officially part of the business, by becoming a collaborating partner. The business still remains a sole trader and you will not be getting shares of the business, however, you will get your own French social security number and be able to work as much as you wish for the business. This scheme was initially designed for spouses of artisans who would often work for years for the business, handling customer relations, quotes and accountancy, without being recognised and without paying towards their own pension. Leaving them very vulnerable in the event of a divorce in later life.
Conjoint collaborateur is also a way for the entrepreneur to have some officially declared help, without having to pay as much as for an employee, since there is no salary (for an employee, think net salary plus 20% of employee's social charges, plus 42% of employer's social charges).
It is a good scheme, however, it has always been difficult to assess how much the social charges for conjoint collaborateur would cost, as you had the option to chose between 5 formulas based on a portion of the entrepreneur's income. Unless you were following your numbers closely, it was difficult to assess your projected profit and therefore the projected social charges for the conjoint collaborateur. Many people also did not understand these options and chose randomly, leaving them with some nasty surprises when the bills for social charges were posted.
How are social charges calculated for conjoint collaborateur
The collaborating partner of a micro entrepreneur has two options to chose from.
Option A - A fixed percentage of the turnover
- Vente de marchandise et founiture d'hébergement : Trading acitvities, hôtel, chambre d'hôtes, meublé de tourisme = 13.4% based on 58% of the turnover.
- Prestations de services BNC* = 23.1% based on 58% of the turnover.
- Prestations de services BIC* = 23.1% based on 58% of the turnover.
- Prestations de services relating to CIPAV: = 22.9% based on 46% of the turnover.
*BNC Means Benefice Non Commeciaux refers to agent commerciaux and profession liberale.
*BIC means Beneficie Industriels et Commerciaux and refers to services registered with Chambre de Metiers and Chambre de Commerce. This includes the labour based/manual activities such as artisans or conciergerie services and agence de communication.
The list of activities relating to CIPAV is broad and includes all the consultant, PR, marketing, coach, teachers.
Option B - Fixed percentage applied on 1/3 of PASS divided by abattement fiscal
PASS stands for Plafond Annuel de Sécurité Sociale and is the standard income basis used by Securite Sociale to calculate taxes. With this option, we are taking one-third of PASS, to which we apply the income tax rebate based on your activity, times a fixed rate. Bear with me here! The fiscal rebate is 71% for trading activities, 50% for artisans (manual services) and 34% for profession liberale.
Let's take an example for each activity type:
- A gite owner or restaurant owner would be paying 13,508 € x 71% X 13.4% = 1,285€
- An artisan will be paying 13,508 € x 50% X 21.3% = 1,438€
- A communication consultant will pay 13,508 € x 34% X 22.9% = 1,051€
Advantages of conjoint collaborateur
- The conjoint collaborateur is not an employee and therefore does not receive a salary.
- Conjoint collaborateur costs less than having an employee.
- Your spouse or PACSed partner can work for an unlimited number of hours.
- Your spouse or PACSed partner have their own French social security number and are officially in the French system.
- Your spouse or PACSed partner contribute toward their own health and pension in France.
- Coinjoints get pension rights, maternity/paternity leave, daily allowances in case of sick leave.
- Conjoints benefits from training fund.
Drawbacks of conjoint collaborateur
- Extra cost for the business.
- For artisans the coinjoint has to be listed onto Registre de la Chambre de Metiers.
- For commerçants the coinjoint has to be listed onto Registre de la Chambre de Commerce.
- This scheme does not work if you only need a few hours of help every week.
- SSI is struggling to integrate the payments into their system.
- This system is new from January 2019 and some SSI helpline are not aware of it and say that their system cannot technically deal with the extra social charges.
How to declare your conjoint collaborateur
Your conjoint collaborateur can be declared when you register your micro entrepreneur. If you want to declare a conjoint collaborateur once you are already working, you will have to go back to your Centre de Formalités d'Entreprises (CFE), i.e:
- Profession liberale: URSSAF
- Trading activities, gites: Chambre de Commerce et d'Industie (CCI)
- Artisans, manual activities: Chambre de Metiers
New scheme to be implemented and tested
While working on this article, I spoke to a few people from the SSI helpdesk in Normandy and Haute-Garonne/Herault. I was surprised to see that they were not aware of this new scheme, i.e. not discussed in their team meetings. They also acknowledged that for now, their platform was not capable of managing this new type of social charges. The lady in Normandy, even said that, as they could not collect these social charges, they were only requesting it when the business was closing down! Fortunately for micro-entrepreneurs, URSSAF is the body that will have to integrate this change in their Net Entreprise and Lautoentrepreneur.fr platforms.
So, should we panic or ignore the conjoint collaborateur scheme altogether? I would say that it is a good option for couples who work together and have enough work for two, for example, 2 to 3 gites, changeover services for several property owners, chambres d'hotes wtih table d'hotes or restaurant type. There is also a delay when a new law is voted and it goes all the way down to the back office. So I guess, that it may take SSI and URSSAF a couple of months to manage this properly. You can see for instance, that each time the social charges are updated for the micro entreprise, the Net Entreprise/Auto-entrepreneur platforms delay the turnover declaration for a month or two, just to update their system.
My advice on conjoint collaborateur for micro-entrepreneurs
- You have to be married or PACsed to benefit from this.
- Chose this scheme if your business generates enough work for two people.
- Go for the basic scheme to start with.
- Chase SSI within a month of creating your business or having added your spouse/partner to ensure that it has been done.
- Check your monthly/quarterly turnover declaration rates to ensure that the extra charges have been added.
- Put aside these extra social charges if they have not been taken, as SSI may request them later (or much later)!
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More information about conjoint collaborateur for micro entrepreneurs in French from Service Public Pro.