A business manager can have two social statuses: that of the manager and that of the president. In practice, the choice of the company’s legal status can impact the regime applicable to the manager. This reflection is part of a more global reflection on business creation choices. Each class has advantages and disadvantages that are important to remember before making a choice.
That said, the strengths of one grade generally present the weaknesses of the other and vice versa. So, is it better to be a manager or a company president? Here is a file which highlights the advantages of each status. Necessary clarification: the “manager” here means the majority manager benefiting from the status of self-employed worker ( TNS ).
It should be remembered that the minority or egalitarian manager has the status of salaried worker. In this case, he benefits from the same regime as the company president. To understand these notions of minority, egalitarian, and majority, we recommend you consult the file we have written for this purpose.
The Advantages Of Manager Status
Good Social Protection At A Low Cost
Regarding social security, the manager benefits from the same benefits as the president, with a few differences. For example, the manager is subject to a 3-day waiting period in the event of sick leave due to a work accident. These differences remain marginal for remuneration, which does not exceed the annual social security ceiling (PASS), i.e. around €41,000 of income per year.
Once retired, the president of a better retirement pension; that said, the difference is insignificant (around €5,000 in allowance) considering the difference in social security contributions (around €13,000 in charges). When income exceeds the PASS, the president benefits from better protection. Ultimately, the manager’s social security rate is 45%, compared to more than 75% for the president…
A Simplified Payroll Management Formalism
The management of the company manager’s payroll follows a different administrative formalism, depending on the status of the person concerned. Here, the manager benefits from relief, compared to the president. His remuneration does not give rise to the establishment of pay slips, unlike that of the company president. Declaring social security contributions every month or quarter is unnecessary, as with its counterpart with nominative social declarations.
Incidentally, this allows the company to save certain costs, such as the fees of the accountant in charge of payroll. The manager no longer has to declare his income to social organizations; the tax administration automatically transmits the data he entered into his income tax declaration (IRPP).
Relatively Low Social Security Contributions At The Start Of Your Activity
The TNS social security contribution recovery system offers a slight advantage to manager status. A mechanism for provisional appeals, calculated on deliberately low bases, is put in place in favor of the self-employed worker. This allows avoiding “burdening” the company with excessively high social charges. These provisional calls are subject to regularization when the income for the past year is communicated to the social organizations.
This is generally the month of May or June of the following year. The annual contributions at the start of activity amount to around €3,500, regardless of the manager’s remuneration. For the president, they represent 75% of the net salary. Their impact is, therefore, much more significant on initial cash flow.
The Advantages Of The Status Of The President
Better Social Protection, Especially For High-Incomes
As indicated above, the president benefits from better social security coverage than the manager. As far as he is concerned, there is no waiting period for work stoppage due to a work accident (AT) or occupational illness (PD). Unlike the manager, the president must contribute to insure against this risk. Also, the president benefits from a more comfortable retirement pension than the manager.
However, it must be emphasized that this protection has a significant cost for the company. The difference in charge rates generally exceeds 30 points… Incidentally, the president over contributes retirement insurance without having retirement rights in return. The additional contributions paid to lost funds represent 1.67% within the PASS limit and 4.59% beyond…
No Social Security Contributions On Dividends Paid To The Sole Shareholder
When the manager is also the sole partner (case of EURL ), the dividends he receives as partner bear, like his remuneration strictly speaking, the TNS social charges. The contributions paid provide additional social protection, particularly in primary and supplementary pensions. This particularity also concerns the business manager when he has opted for corporate tax within the framework of his sole proprietorship.
The sole associate president of SASU has no constraints in this matter. The dividends it receives do not incur any social security contributions. The classic tax rate applies the 30% flat tax or option for the progressive income tax scale.
A Relatively Simple Social Security Contribution Recovery System
The manager’s system for recovering social security contributions is complex. Generally poorly understood, it can sometimes cause significant financial difficulties. The fact that final social security contributions (contributions due – contributions paid in provisional appeals) are only regularized one year later causes cash flow problems in the absence of anticipation by the manager.
The system applicable to the president is, for its part, much more straightforward. The company declares, each month or each quarter, the remuneration paid to the person concerned. Social charges are then calculated in reality and delivered immediately to the organizations. There is no time lag to anticipate.