TNS or salaried status for company managers: essential information

In France, two statuses dominate the entrepreneurial market: TNS and assimilé salarié. TNS (Travailleur Non Salarié) status refers to a natural person working independently in a commercial, craft or liberal profession. As for salaried status, it refers to a person who undertakes to work for a company, on a part-time or full-time basis, with the benefit of a fixed monthly salary. Although very different, these two statuses both offer a number of advantages for the manager. So, between TNS and salaried employee, which status should an entrepreneur prefer?

Here's all the information you need to answer the question

The social status of company managers

TNS and salaried status are both available to company directors, depending on the legal form of their structure and the percentage of shares they hold.

If you're a company director on the same footing as an employee, you'll receive a monthly income just like a salaried worker. In addition to this salary, he will be subject to the general Social Security system for salaried employees. This status applies to several types of position:

• Non-partner managers of an EURL
• All SAS Chairmen and Managing Directors
• Minority or equal partners in a SARL (limited liability company)
• Chairmen of Boards of Directors and Supervisory Boards, as well as CEOs and directors of public limited companies.

As for the TNS manager, his remuneration is in no way in the form of a salary, since he will have no subordinate relationship with any hierarchical superior. Unlike salaried employees, TNS managers are subject to the Sécurité Sociale des Indépendants system, which replaces the RSI system, and not to the general employee scheme. This status concerns these entrepreneurial profiles:

• Individual contractors
• All EURL managing partners
• SARL majority managers
• Partners of a non-trading company (SNC)

The advantages of TNS status for managers

This TNS status offers a number of significant advantages for the company director. Firstly, for the first two years of business, contributions are calculated on the basis of a rather low minimum flat-rate, allowing for an attractive cash-flow adjustment.

In addition, it is important to note that the social security charges payable will always be lower than those of a salaried manager.

It is also possible to take out supplementary cover through specific insurance contracts, such as the Madelin contract. The latter enables you to contribute more to your retirement and guarantee good health cover. Finally, the health insurance scheme is based on that of salaried employees, offering the same reimbursement rates.

The advantages of employee status for managers

Above all, this type of status gives you the opportunity to benefit from the same social protection as all employees. The system of social security contributions is also extremely simple, with monthly or quarterly payments.

Company directors can combine their position with an employment contract. This allows them to contribute to the unemployment insurance scheme in the same way as any other employee.

It should be noted, however, that it will be impossible for equal partners to combine their corporate office with an employment contract. In terms of dividends, salaried managers are not to be outdone either! Whatever the amount of their dividends, they will not be subject to social security contributions, unlike self-employed partners.

TNS or employee: differences in social security contributions

Whether you are a self-employed or salaried manager, your social security contributions will not be the same, as there is a relative difference to consider.

On average, contributions to the general employee scheme will be twice as high as for managers assimilated to self-employed workers.

This difference in weight is correlated with the amount of their remuneration; the higher the latter, the greater the difference.

There's nothing like a concrete, numerical example. Let's say an entrepreneur working in a commercial business wants to earn 30,000 euros net per year. What are the social security charges to be taken into account, whether as a self-employed or salaried employee? There's a simple calculation to help you work out how much of this cost you'll have to pay.

• Salaried manager: gross annual salary + employer's contributions. In our example, the calculation would be: 38,961 + 10,800 = 49,761 euros per year.
• TNS manager: net remuneration + TNS contributions. In our case, the calculation is: 30,000 + 10,200 = 40,200 euros per year.

The difference in contributions to be allocated between a self-employed manager and a manager treated as an employee is therefore 9,561 euros for our example.

Conclusion

All company directors need to make their choice with the utmost care. TNS or assimilated employee? This not-so-obvious question depends on a number of parameters that need to be analyzed before setting up a company. To help you make the right choice, we recommend that you call on the services of a qualified chartered accountant. He or she will be able to offer you sound advice in line with your business and development plan.