Wage portage: The bridge between independence and job security abroad

  • young freelancer
Published on 2023-09-06 at 11:00 by Asaël Häzaq
There are several ways to start or grow your career overseas. You can secure a local contract with a foreign company or an expat contract or even request an international transfer. Others may prefer remote working or even digital nomadism. But what if you need independence and job security at the same time? Wage portage, a form of employment created tentatively in the 1980s and becoming increasingly popular among employees, can address this issue. What are the benefits of wage portage for those seeking to work abroad?

What is wage portage?

Wage portage is a form of employment that brings together three players: a client company, a worker and a company that "mandates" the worker to the client company. The client company signs a contract with the wage portage company and the employee is called the "independent contractor". Specifically, the wage portage company hires an independent contractor to carry out an assignment for the client company. The two companies have agreed on the terms and conditions of the assignment and have signed a commercial contract to guarantee the correct execution of the assignment. For their part, freelancers sign an employment contract with the wage portage company that entrusts them with the assignment. This company is also responsible for their remuneration.

Although they are still called employees (because they are employed by a company), their situation is closer to that of self-employed workers. It's up to independent contractors to find their own assignments and negotiate their own rates. The wage portage company does not offer turnkey assignments, as a temporary employment agency might. On the contrary, it's up to freelancers to develop their own business, which requires a thorough knowledge of the market. This is even more important when working abroad, where markets and rules may be different from those you might be familiar with. As a result, independent contractors have a dual role to play: they must have commercial and marketing skills and know how to sell themselves and land assignments. They must also be able to carry out these assignments properly to satisfy the client.

Benefits of wage portage

Wage portage can be highly beneficial for prospective expats. The transition from employed to self-employment status can be challenging. Add to that the complexities of starting a business abroad (legal status, taxation, etc.). In this case, you could prefer being an employee, that is, being hired by a classic company. But how do you combine the advantages of being self-employed with those of being an employee? Wage portage is the answer, combining flexibility, versatility and security.

First and foremost, the portage company takes care of all the administrative formalities for its expat employees, from declaration of employment to the immigration authorities to invoicing of assignments and management of payments. This gives time to the independent contractor to concentrate on finding and carrying out assignments that can be short or long, depending on your preferences. Here again, the wage portage company contributes its expertise, for example, in penetrating the host country's labor market and finding assignments that match the employee's profile. Some wage portage companies even provide legal assistance.

Another advantage is security. With this form of employment, independent contractors retain all the benefits of traditional employment: they are still entitled to social benefits in terms of reimbursement of health care costs, unemployment insurance, parental leave and retirement.

Who is wage portage intended for?

Wage portage is primarily intended for self-employed expats. It may also be suitable for retired people, recent graduates, or people undergoing professional retraining. It can be a good way to experience life as a freelancer abroad without being left to yourself.

How do you choose a wage portage company? It's best to opt for a company based in your own country. Comparing the management fee rates (the rate applied to the independent contractor's revenue) will help you decide. A high rate usually means a low salary. Conversely, a low rate guarantees a higher salary. However, a very low rate is not necessarily a good deal, as it may hide other costs that make the contract less attractive in the end. There are many other factors to consider, so comparing several rates and studying market standards is a good idea before signing with a portage company.

Overall, wage portage is an interesting option for professionals who want to settle abroad while maintaining a safety net with a company in their home country (the portage company). It's a way of discovering a new country while experiencing the freedom of self-employment and still enjoying the benefits of an employment contract.