Self-employed or payrolling: which do you prefer?

Anyone who wants to work flexibly, outside the typical pattern of a full-time contract of (un)determined duration, will sooner or later ask themself how best to do this? Choose self-employed status or payrolling? We can help you decide.  

Flexible solutions for flexible work

In Belgium, freelancers have various options to move flexibly from assignment to assignment. This does not include the option of setting up your own company or entering into a fixed-term employment contract. In this instance, we discuss two other, more accessible solutions: payrolling and freelancing as a self-employed person without a business.

Just a reminder: under the payrolling system you perform assignments for an end client on a temporary basis. A payrolling partner like Tentoo will temporarily act as your employer in that case. Are you self-employed? Then you do it without that middleman and you are responsible for the complete administrative management of your activities. Both systems have their benefits and downsides, depending on your intentions and the nature of your job. But how to make the right choice?

Job volume

For someone who has little volume in terms of assignments and/or who does not want to make a major commitment as a freelancer, payrolling is the easiest option. The start-up cost is 0, it requires less effort, and you can work on a very ad hoc basis. Do you want to just work for a client for a day? No problem. Just register as a temp worker through My Tentoo, fill in a number of details about your assignment and client, and you can get started. We take care of the financial and administrative side of things and ensure you are legally employed.

When should you consider switching to self-employed status? As soon as you perform assignments on a relatively regular basis, have a specific business plan in mind and are able to fall back on a reliable customer base. That said, there is no clear cut-off. A lot depends on what you feel most comfortable with.  

Taking the administrative burden off your hands

The payrolling system offers great ease of use. Almost all of the administration is taken off your hands. Enter the assignment into the online system, perform the scheduled tasks and you’re done. You are guaranteed to be paid your wages – we take care of this – and at the end of the year all the tax forms are filled in in your personal income tax.

If you decide to become self-employed, there is much more admin involved. Starting with: applying for a VAT number, registering with social security, taking care of your VAT administration, billing customers and monitoring payments. Fortunately, you can also get support in this. Tentoo can take care of every aspect of your admin. You are still responsible for finding your own clients. The same applies to payrolling.

Peace of mind 

The fact that your admin is perfectly managed with payrolling offers you considerable comfort on the one hand and great peace of mind on the other. A solid legal framework applies to the entire temporary arrangement. In Belgium, a temporary worker thus largely has the same rights as a permanent employee, in terms of leave, pension, minimum wage, health insurance or protection of working hours.

If you become self-employed, a number of those protective measures expire. You fall under a completely different legal framework in that case, for trade and commercial contracts.

The freedom to determine your own compensation 

As Johan Cruijff famously quipped: each downside has its upside, and vice versa. There are also a number of restrictions as a result of this social legislation that protects you and your end clients. For example, in terms of salary. As a temporary worker, you are bound by certain statutory wage scales. Cutting your price to get a contract is not possible in that case. Nor can you voluntarily work through the night to finish an assignment. 

If you are self-employed, you have much greater freedom to negotiate prices, are free to perform your assignments as you see fit, arrange your own working hours, bill your work how you want to, and so on. The flip side of the coin is that you don’t enjoy the same social protection as payroll freelancers.

So: payrolling or self-employed status?

Ultimately, the decision for payrolling or self-employment is not black and white. For some, the commercial freedom of self-employed status is more important, others are more comfortable with the social protection and ease of use of payrolling.