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Old 11.09.2009, 14:11
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Should I setup sole trader to take over my own employment contract?

Hello,

I am currently employed by a recruitment company who, in turn, is sending me to an employer for fixed 6 month missions.

Part of my job is to monitor the payables and I noticed that my employer pays my recruitment agency almost twice as much as I am getting. So,

Employer -> Recruitment Agency -> Me
100% -> 45% "charges" -> remaining 55%

I am considering to setup my own company and employ myself, signing direct "services contract" with my employer. The current contract does not prevent me from doing so, my employer is OK.

My questions are:

* is there more to what meets the eye? Could it be that setting up a sole trader and maintaining it costs more than just staying put with my "handlers"?

* what should I be careful about when setting up company "sole trader"? Any deadlines I should not miss?

* I already have a good lawyer but not an accountant; do you know approx how much do accounting services cost (sole trader, 12 invoices/year) to have the filing and auditing, social security, blah-blah, etc done impeccably?

* anything else I should consider/think of before jumping ship?

Thank you, awesome community.
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  #2  
Old 11.09.2009, 14:19
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Re: Should I setup sole trader to take over my own employment contract?

Is the "remaining 55%" gross or net? I.e. before or after tax, social deductions etc?
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Old 11.09.2009, 14:26
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Re: Should I setup sole trader to take over my own employment contract?

The 55% I receive are gross, no taxes paid, 1st pillar insurance deducted and paid, incidents insurance deducted and paid, and that's about it...

So, end of the year I am still up for taxes
Each month I pay my health insurance (Sanitas)

Basically, they have me on their payroll and for this deduct 45% of my pay. Is that fair?
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Old 11.09.2009, 14:34
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Re: Should I setup sole trader to take over my own employment contract?

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The 55% I receive are gross, no taxes paid, 1st pillar insurance deducted and paid, incidents insurance deducted and paid, and that's about it...

So, end of the year I am still up for taxes
Each month I pay my health insurance (Sanitas)

Basically, they have me on their payroll and for this deduct 45% of my pay. Is that fair?
Similar thing happened to me so I ditched the agency and went direct with the company BUT used a management company to do the payroll. They charged me around 30 euros a day, and sorted out my tax, pensions etc. You have to set up the contract with the management company and then they set up a contract with the company you work for (similar to how an agent would do it).

I got 100 euros a day more and the company also saved 100 euros a day because of the amount the original agency charged.
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Old 11.09.2009, 16:08
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Re: Should I setup sole trader to take over my own employment contract?

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Similar thing happened to me so I ditched the agency and went direct with the company BUT used a management company to do the payroll. They charged me around 30 euros a day, and sorted out my tax, pensions etc. You have to set up the contract with the management company and then they set up a contract with the company you work for (similar to how an agent would do it).

I got 100 euros a day more and the company also saved 100 euros a day because of the amount the original agency charged.
I was wondering which management company you used? Thanks!
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  #6  
Old 11.09.2009, 16:19
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Re: Should I setup sole trader to take over my own employment contract?

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* what should I be careful about when setting up company "sole trader"? Any deadlines I should not miss?
You can't really do this as a sole trader unless you have multiple clients. You would have to set up a GmbH.

The management/payroll company option may be more cost effective - certainly less of a headache.
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Old 12.09.2009, 16:11
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Re: Should I setup sole trader to take over my own employment contract?

A percentage of the 45% may be going to your bosses back pocket... be careful you may find yourself without a job at all.

Keep in mind that you may not have a restriction clause in your contract, but your the company you work for may have one with the sharks you work for? preventing them from doing this too.

Assuming its not going to breach EF rules, Please name and shame the company (assuming you get away) so that we can all avoid working for them, there is *alot* of this going on in the French part of Switzerland I know.
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Old 13.09.2009, 08:59
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Re: Should I setup sole trader to take over my own employment contract?

First off, thank you all for the feedback and the priceless information and support.

I will surely come back and name/shame the "handlers" but when the time is right - I am all fresh to this employment/enslavement scheme and in this crisis do not wish to end up in the street...

So, my dear forum friends, I promise once I find a payroll company and switch contracts, I will open a thread "Avoid CompanyX" explaining in detail the case.

Which, quite naturally, begs the question (EmmaMoore already asked it) - can you recommend any payroll / management companies in Geneva?

Thank you!
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  #9  
Old 20.09.2009, 15:29
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Should I setup sole trader to take over my own employment contract?

I have worked as a contractor in Switzerland for some years, and most "agents" deduct silly percentages, they do pay all the standard insurances that an "employer" has to cover, accident insurance etc.... But generally do rip you off. You may want to check your contract before going about this. As every contract I have had and it's quite a few now have a clause, this is the general translation from German to English. "You cannot sell yourself directly to the company". You can take direct employment with whoever you are working for but you cannot "contract" directly to them.

The payroll management company should be able to assist you on telling you whether you can or not.

Cheers
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Old 12.09.2011, 08:36
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Re: Should I setup sole trader to take over my own employment contract?

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I am considering to setup my own company and employ myself, signing direct "services contract" with my employer. The current contract does not prevent me from doing so, my employer is OK.
Apologies for resuming this thread. I am in the same exact situation (well, except that my umbrella company is not so greedy )

I'm interested in knowing if you managed to do it, setting up your own company and everything. Would you provide a feedback about your experience?

Also, is it possible to be a self employer, having a B permit?

Thanks.
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Old 12.09.2011, 09:23
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Re: Should I setup sole trader to take over my own employment contract?

There are actually different types of B permits. I had to apply for a different B permit that permitted being a soul trader (5 year permit as well) as oppose to my original which was valid for 2 years and only allowed me to work for other people. In reality this means paying for getting a permit again and having one of the pages changed. If you are unsure which you have, read the writing on the outside back page.

As posted by someone previously here, you can't become a soul trader if your business has just one customer (i.e. to cut out an agency) as they will say you are really just employed. You need multiple sources of income and they will want to see invoices/contracts.

*Disclaimer: This is all taken from my experience about becoming self employed in the Kanton of Zürich. If you just go into your local community office I'm sure they will be able to give you the facts (if you smile nicely and they've had their morning coffee ).

Last edited by HippoPat; 12.09.2011 at 09:40.
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  #12  
Old 12.09.2011, 09:33
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Re: Should I setup sole trader to take over my own employment contract?

i have a similar situation where i am paying almost double what i would pay to hire someone directly. this is down to internal politics where i cannot increase my headcount, but hiring a 'temp' through an agency doesn't contribute towards headcount.

permanent contract will be signed in a couple of months, but for the last 6 the agency enjoyed a nice little earner. for a small company, the outsourced payroll etc. might also be a benefit of using an agency - though of course the main benefit is for short term assignments where you don't want the hassle to onboard/offboard someone for just a few months of work.

find out why they went the agency route and what (if anything) stops them from hiring you directly. maybe there is a non-poaching agreement with the agency. when my employee goes onto permanent contract, i will need to pay the agency a commission.

if the employer likes you and wants to go from temp -> permanent, then this might make sense to switch. if they don't want to employ you but just want to save a bit of commission, it makes sense, but i would be wary of an employer willing to 'screw over' their agency, esp. when you will become their next agency.
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Old 12.09.2011, 11:24
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Re: Should I setup sole trader to take over my own employment contract?

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As posted by someone previously here, you can't become a soul trader if your business has just one customer (i.e. to cut out an agency) as they will say you are really just employed. You need multiple sources of income and they will want to see invoices/contracts.
Thanks for this information.
I was actually interested in the self-employed situation because of the different conditions regarding 3a Pillar accounts, to have the cap at 20% of my annual income.

I still don't know if I qualify for this condition in my actual status, as the agency is taking forever to answer this simple question. We'll see. Without this advantage, there is no real reason to be a consultant over employed then.
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Old 12.09.2011, 11:28
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Re: Should I setup sole trader to take over my own employment contract?

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Thanks for this information.
I was actually interested in the self-employed situation because of the different conditions regarding 3a Pillar accounts, to have the cap at 20% of my annual income.

I still don't know if I qualify for this condition in my actual status, as the agency is taking forever to answer this simple question. We'll see. Without this advantage, there is no real reason to be a consultant over employed then.
That's the whole point .

Anyway, if you have just one client then forget the self employment option. A GmbH is a possibility though.
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Old 12.09.2011, 11:37
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Re: Should I setup sole trader to take over my own employment contract?

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That's the whole point .

Anyway, if you have just one client then forget the self employment option. A GmbH is a possibility though.
I've read the GmbH is too much hassle, and in my case no real gain.

Guess I'll stay with our 6k 3a Pillar cap then

Cheers
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