Our guide to becoming a freelancer in 2024

Thinking of getting into freelancing, but want to know more about what sort of administrative demands could be expected of you?

Which legal status should you choose? When and how do you pay your social charges? Which taxes apply to you? Do you need an accountant? What are the key administrative deadlines for 2024?

You're in the right place. 

We’ve put together a complete guide that answers these questions - and should help direct your approach.

First off, a freelancer is a temporary or contractual worker paid to perform services for external entities or individuals. They get paid by sending their client an invoice that outlines the hours and rates for the service(s) they both agreed upon beforehand. Yet despite working with the client, they don't work for the client. 

They're not considered to be an employee of the person or company that hired them for the job, nor are they bound by the company’s employee requirements. All that’s required of them is completing the job to the client's satisfaction. How, when and where they do that is up to them.

As a freelancer, you're required to choose a legal status for your activity or industry, whether it’s as a sole proprietorship or as a company. Starting out, sole proprietorship (auto-entrepreneur) status under the scope of the micro-enterprise regime is the most favorable of the options out there. This status brings several benefits:

• the rate for social charges is reasonable;
• the accounting requirements are quite simple;
• creating a micro-enterprise is very easy: you can do it online in less than 15 minutes.

In order to benefit from the micro-entreprise status, you must conduct your business alone and be below the annual revenue ceiling.

The 2023 thresholds for micro-enterprises were:

• €188,700 for commercial activity;
• €77,700 for services and liberal activities.

These standards are periodically revisited and raised, leaving you ample room to test your project’s potential.

Know that if you ever decide to associate, or surpass the thresholds, you’ll have to update your legal status to reflect the new setup (e.g. a SARL or SAS).

If you don’t want to waste time sorting out paperwork, then you may want to enlist the help of an umbrella company. This arrangement places you somewhere between salaried work and entrepreneurship.

Concretely, this means that you hold a contract with your umbrella company. This means you have the peace of mind of being a salaried worker but with the freedom of a freelancer. You’re responsible for sourcing your clients and setting your rates.

What the umbrella company does is take on the administrative tasks for your business (producing quotes and invoices, sending reminders to clients) and provides you with a paystub.

For this service, they take a commission on your invoices.

Good news: It’s relatively easy to set up a micro-enterprise. You can do it online in full at the website Guichet-entreprises.fr.

All you have to do is fill out a form declaring the launch of your business (déclaration de début d’activité) and provide three supporting documents:

• proof of identification;
• proof of domiciliation (i.e. a proof of address less than three months old if you operate from your home);
• a sworn statement of non condemnation, to show that you are in good standing with the law.

If you are a liberal worker (which is the case for most freelancers), you need to fill out the Cerfa P0 PL form.

If you do artisanal or commercial work, then the Cerfa P0 CMB form is right for you.

After providing the required documents, you’re all set. The guichet des entreprises (a federal platform created to assist business owners in legal formalities) will handle the rest: they’ll be the ones to pass your file onto the URSSAF (or whichever center for business formalities is most relevant).

You’ll receive your SIRET and SIREN numbers (to identify your business) and APE code (to categorize your field of work) in the mail. Then you can officially start working freelance.

Being a micro-enterprise has its perks: you benefit from the micro-social regime.

This means that you pay your social charges at the same time that you declare your revenue.

A set rate is applied to your revenue to calculate your social contributions. This of course varies according to the nature of your business.

The 2023 rates have been lowered and are:

• 12.3% of pre-tax earnings for commercial activity;
• 21.2% of pre-tax earnings for services and liberal activity.

Paying your social charges allows you to pay into the national social security net (Sécurité Sociale) and be eligible for family allowances, basic and supplemental retirement plans, parental leave, etc.

Tax-wise, your micro-enterprise status allows you to handle your finances via the micro-fiscal regime.

That means you have two options when it comes to paying your income tax:

Option 1: pay your income tax based on your yearly earnings, after an abatement to the effect of:

• 71% of earnings for commercial activity;
• 50% of earnings for services;
• 34% of earnings for liberal activity.

Let’s use an example to better illustrate how this is calculated.

Marie is a freelance developer. Her 2022 earnings were €30,000. According to tax law, her work is classified as liberal and therefore is entitled to a 34% tax abatement. This means that she will only be taxed on €19,800 of her earnings (i.e. €30,000-34%).

Option 2: opt to withhold your taxes

Tax withholding, or ‘versement libératoire’ can be an attractive option for freelancers with a micro-enterprise. It allows you to pay your taxes while you declare your income.

In practice this means that the moment you declare your income, you’ll pay an additional tax on top of your social charges, namely:

• 1% for commercial activity;
• 1.7% for services;
• 2.2% for liberal activity.

This percentage equates to your overall income tax rate.

In the end, tax withholding is the more favorable option of the two. However, in order to elect this method of tax payment for 2023, your adjusted gross income (revenu fiscal de référence) for 2021 must not exceed:

• €26,070 for an individual;
• €52,140  for joint filers (with no children).

The VAT is applied to all consumer spending. As a freelancer, you must also include this in your invoices.

That said, if your business is just starting out, you are exempt from having to pay your VAT. To qualify for this exemption, your annual income must not exceed in 2023:

• €91,900 for commercial activity;
• €36,800 for services and liberal activity.

The CFE (a corporate property tax) is a tax based on the value of any and all of the real estate associated with a business (e.g. a storage space). All businesses are subject to this tax, including freelancers who work from home.

Keep in mind that you can qualify for an exemption if it’s your first year of operation or if your earnings do not exceed €5,000 per year.

This property tax is due every year around December.

After every mission, you need to send your client an invoice for services rendered. This document serves as proof of payment in the event of an audit, so be sure to store it securely.

Careful, your invoice must include certain key elements, such as:

• the word ‘invoice’;
• the date and invoice number;
• the legal name of your company, with its address, your SIRET number and your legal status;
• your client’s legal name and address;
• the pre-tax (HT) price and the price including VAT (TTC);
• relevant VAT information, like the applicable rate, the amount it comes out to, as well as your intracommunity VAT number (if you are required to collect VAT);
• the terms of payment (remember to include your RIB if you wish to be paid via a transfer);
• any late payment penalties.

Good to know: you can also send your clients a quote for your services. It’s not required if you’re operating on a B2B basis (unless the company asks you to), but it can help scope out the mission and establish a fair price.

As a freelancer, you have to keep certain key dates top of mind.

Here’s a list of the most important ones to jot down in your calendar.

• You can choose to declare your income on either a monthly or trimestrial basis, meaning on 31 January 2023, 30 April 2023, 31 July 2023, and 31 October 2023.
• Paying social charges and withholding tax happens at the same time, so again this occurs on a monthly basis or on the dates indicated above.
• Income tax can be levied every month if you decide to withhold your taxes.
• The CFE must be paid between 1 November and 15 December.
• VAT payment varies according to the regime you elected. With a normal regime, VAT payment happens at the same time as your income declaration. In the case of a simplified regime, it happens twice a year: once in July 2023 and again in December 2023.