[laurent92]

Tax data for a SASU company:

- 20% VAT on revenue,

- then, after your marginal costs:

- Either distribute as dividends. IS is 15% to 30% of profit, then long story short with CSG, there is a 17% tax,

- Either distribute as salary to employees: 46% as taxes/contributions,

- In either case, dividends or salaries, we have to pay 0% to 45% income tax, averaging at 10-15% of our incomes.

Don’t forget mandatory paperwork (lodging accounting documents yearly) + an accountant because you won’t understand how to lodge the paperwork. In total, if you had only mandatory charges + VAT + CET (city tax assuming you have no office) + IS + CSG + Income tax, for 100k revenue distributed 100% as dividends, you’ll have 51,325€;

If you distribute 100% as your own salary, you’ll get 39.285€.

[vladvasiliu]

Although your calculation isn't quite correct (see below), non-French people should note something related to the way taxes are perceived to be in France and especially related to social security. As a freelance going with this scheme, you get basically nothing:

* You only have the basic, state social security (the 17% part OP talks about). This basically only covers you for emergency situations. There's tons to pay out of pocket in case of pretty much anything (hospital stays, glasses, teeth work, etc). This is usually covered by a complementary insurance, usually paid for by the employer (mutuelle). Private people can subscribe to it, but it costs extra.

* You do not contribute to any retirement. If you only do this for your whole life, at the end, you will only get the absolute minimum retirement (which is ridiculous).

* You do not get unemployment in case your business fails.

* In case of accident that prevents you from working (say car crash and you end up paralyzed or something) you're SoL. A "regular employee" (especially engineer level) could have an insurance covering this. In the situation described here, you'd have to pay extra or not get any money anymore.

All this is to say that for all the taxes paid (almost 50% !) you get pretty much... nothing. I'm curious how this compares to other countries with lower taxes where you're expected to pay for insurance out of pocket.

There's also another fun fact: once you have your 50k in hand after having paid the other 50k to the state, it doesn't stop there! Want to go buy something? The state would love you to, they get 20% out of that too!

I'd be curious to see a similar breakdown for the US in particular, where people usually say that for the higher salaries you have to pay more for healthcare. Maybe the extra insurance is much more expensive over there, don't know.

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Parent's error is you don't count the VAT in the revenue. It's invoiced on top of it and it goes back to the state directly. Also, if you have 100K in yearly revenue, it's not a good deal to pay regular income tax on that, the 30% flat rate is more advantageous.

All in all, your 100% dividend works out to 53869 which is a roughly 5% increase over their estimate.

[mrep]

Healthcare is quite variable in the states. I for example have good insurance with my job so I have a max out of pocket spending limit of $2500 per year and I can also put $3500 per year of pre-income tax money into a health savings account (HSA) to use for healthcare spending so it's a total non-issue for me. The people that really get hosed are usually the ones that don't get it through a job such as if you are self-employed and those plans can run over 10000 a year and have really high deductibles.

As for the income tax wedge, between federal income taxes, social security, and medicare mine was about 27% on 221k income as a single person with no kids. It helps that I was in washington which has no state income tax and sales tax was about 10% there if you were curious.

edit: forgot state unemployment insurance which ranges from .2% to near 6% depending on the number of claims.