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Social Protection For The Manager: What Is The Expected Cost?

The manager of a company benefits from social protection (reimbursement of healthcare, validation of retirement quarters, compensation for work stoppages, etc.). In return, the company pays contributions. Their amount, and, consequently, the cost of the manager’s social protection, depends on his status. He can be assimilated as an employee or, on the contrary, be considered a self-employed worker. Here is the cost of the manager’s social protection according to his status and his social security system.

The Cost Of Social Protection Depends On The Status Of The Manager

The price to be paid by a company for its manager to be entitled to social protection depends on his status. In India, there are two: the quality of assimilated employees and the level of self-employed workers (TNS).

The Cost Of Social Protection For The Unpaid Manager

Different rules apply to managers who receive no remuneration. The salaried manager, for his part, does not pay any social charges in the absence of salary. However, in return, he has no social protection. He is, for example, not covered in the event of work stoppage (illness or work accident), does not contribute to his retirement and is not entitled to healthcare reimbursements… If we should summarize, for a salaried manager, €0 salary = €0 social security contributions = no social security coverage.

For the self-employed worker, the reasoning is different. Indeed, the latter must pay minimum social security contributions if he receives no – or meager – remuneration. Their amount amounts to approximately 1050 euros (excluding professional training). In particular, they allow the manager to validate 3 quarters of retirement (only for essential pension) and to be entitled to daily social security allowances (IJSS) in the event of work stoppage. In summary, for the TNS, €0 of remuneration = approximately €1,500 of contributions = minimum social coverage.

The Cost Of Social Protection For Paid Managers

Once again, the cost of social protection for salaried managers is different from that for self-employed workers. Here, this cost is one and a half times greater for the salaried manager. When receiving remuneration, the salaried manager contributes to the same funds and in the same proportions as an employee, with a few differences. In fact, he does not contribute to unemployment insurance. On the other hand, it bears additional social contributions, being assimilated into a framework (executive insurance, APEC, etc.). 

Furthermore, he cannot benefit from the reduced rate of the employer health insurance contribution (7% instead of 13%). All these provisions have a substantial impact on the cost of social protection. On average, the weight of employee and employer social security contributions is estimated at around 55% of gross salary – excluding work accident contributions. As for the self-employed worker, the cost is much less significant. This professional, affiliated with the Social Security of the Self-employed (SSI), benefits from specific reductions in contributions depending on the remuneration he receives.

 Like his counterpart, he does not contribute to unemployment insurance. In terms of retirement, he contributes in the same proportions, up to approximately 41,000 euros of income. Beyond that, he hardly contributes. On average, the social security contribution rate of a TNS varies between 35% and 45% of their net remuneration. If we relate social security contributions to gross salary, as is the case for salaried managers, the cost of social protection is only around 25% to 30% …

Differences In Calculating And Collecting Contributions

Principles For Calculating And Collecting Social Security Contributions

The payment schedule for social security contributions is generally the same for all managers, whether employees or non-employees. They typically have the choice between two methods: 12 monthly payments or 4 quarterly payments. On the other hand, the calculation methods differ significantly, and this has an impact on the company’s cash flow.

For the manager assimilated to an employee, social charges are calculated each month or each quarter on the basis of the salaries actually paid for the past period. We base ourselves here on the remuneration actually received. The calculation of social charges is carried out by means of a compulsory and unique declaration called the DSN (nominative social order).

For the self-employed worker, payments operate according to a system of installments/regularization. It cannot be otherwise because his remuneration is only declared to the administration once a year. Installments are paid each year based on known income. After reporting the payment for the past year, URSSAF calculates the final regularization and smooths it out until the end of the year.

Start Of Activity: The Particular Case Of TNS

The self-employed worker benefits, for his part, from a deferred payment of social security contributions when he begins his activity. In this scenario, the first payments to Urssaf take place after a minimum period of 90 days. Finally, contributions for the first and beginning of the second year of activity are called on deliberately shallow flat-rate bases (€8,000 or €16,000). The flat rate contributions at the start of activity amount to around 3,500 euros (excluding ACCRE) for the 1st year and a little less for the 2nd year (contributions are, however, regularized from the middle of the 2nd year of activity). 

The assimilated-employee manager cannot benefit from a similar system. In fact, the company pays, at the end of the month or quarter following the payment of salaries to the manager, the social security contributions actually due. There is no deferred payment or fixed contributions in the event of the start of activity.

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