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Old 19.11.2009, 14:00
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Freelance Consultants - How NOT to get ripped off by intermediaries

Hello community,

Having posted before on the subject and promised to get back and report on my endeavors, here I am.
This thread is a follow-up of my previous one on the topic and several posts in the related threads .

First off, some background information: Anyone working in CH should factor in the fact that the mandatory AVS, insurance, etc charges will amount to ~25% of his/her gross contract per month. For example, if your consulting contract is 10,000 CHF / month, you can expect to see no more than CHF 7,500 flowing in your account gross of income tax. As there are many roads ahead, I will stop the intro math here [you may be tax exempt or taxable at source, or... ]

A lot of my fellow consultants see half or less than half of the contract amount going in, so you do the math how much your "handlers" make for their services or lack thereof.

After several months of searching and exchanging correspondence with numerous accounting/payroll/umbrella companies that can handle a freelancer's services and invoice a client on his/her behalf, I short-listed a few. Eventually, ended up with the one I hereby highly recommend after a couple of months' worth of personal experience.

ACCURITY is a company often mentioned in these forums, mostly for their tax calculator. There is so much more to these guys, I don't know where to start...

Short and sweet - they have two service packs for freelancers to pick from, costing you either 6 or 7 % of your gross contract. Add to this the mandatory 25% and you are looking at 31-32% of reduction on your contract amount with all charges paid. Their commission is reasonable, given you do not have to worry about any legal/tax/pension/regulation/reporting issues or setting up and handling your own company (and accounting and legal stuff). Their service is completely transparent, from start to finish: you can get a breakdown of each penny going backwards from the contracted amount to what flows into your bank account, to what goes in a 3rd pillar account for tax optimization, to what they get. You get access to your own account where you see all, you have a dedicated contact person who is following all queries instead of someone anonymous reading off a CRM log each time.

A word on the brilliant staff is due. Handling my affairs were Billie Waelte (Ms.) and Nicola Clothier (Ms.) - always kind and supportive, fast in their emails and pushing the paperwork forward. If and when you call there, rest assured these two ladies are top notch!

As this is already longer than initially intended, let me get to the naming and shaming of my former "handlers" - Vacancy.ch Stay clear of Vacancy CH which, for the hefty 30% margin they make on your contract, deduct the mandatory 25% and provide NOTHING but a wire transfer of the remaining 45% of your contract to your bank account. No support, no consulting, no tax optimization, no contact person, nothing, absolutely nothing. And that big fat nothing costs you almost a quarter of your gross contract pay *more* compared to the alternative of Accurity. Do not get me wrong - there is no such thing as free lunch and services have to be paid for. The question is why pay a third for nothing when 6-7% will get you great service and peace of mind?

I hope the above will help people who are in their search for a decent umbrella / payroll company to handle their affairs. Good luck guys and happy consulting!
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Old 19.11.2009, 19:06
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

I can't let this pass without wholeheartedly recommending Swisslinx in Zurich. The most important thing to say is that over several years, several clients and contracts of various origin I have been impressed by their honesty and openess. Of course these are good qualities to deal with but also values that I am very happy to be associated with in the mind of the client. In particular for each contract Swisslinx have been willing to disclose and clearly account for all the money that the client is paying. Of course I didn't always like the numbers, but they were available to be accepted, rejected or 'discussed'.

I guess I have to add that I have no interest whatever in the company except as a satisfied freelancer.
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Old 20.11.2009, 11:23
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

Thank you, GJOOFR for the valuable info. I should also not that I am in no way related to Accurity except I am a satisfied freelancer

The more info we have on companies with values and not pimps disguised as GMbH, the better!

Happy consulting
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Old 23.08.2011, 23:23
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

I would like to add my positive experience with Accurity and Fr. Wälte to the above. I recently had a client who was not sure they would contract directly with my company (an Einzelfirma), or if they were going to insist that I use a payroll company as an intermediary. To have my bases covered while trying to resolve the issue with my client I contacted several payroll companies. Accurity was by far the best. Fr. Wälte was very thorough in explaining and prompt in providing answers to my questions. The fee they were quoting was very reasonable compared to the other payroll companies I contacted. In the end, my client did sign the agreement directly with my company. I would have been very comfortable using Accurity if I would have had to, and would not hesitate to use them in the future should the need arise.
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Old 23.08.2011, 23:30
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

Has anyone tried Aldo Luck in Pfäffikon?
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Old 15.03.2014, 16:56
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

Hi

It is very interesting and informative post. I would like to add here due to bad management of vacancy, the company Vacancy.ch is out of business now.

Thanks
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Old 17.03.2014, 18:26
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

Very useful readup OP, thanks for the details. I've heard of Swisslinx as well, all good words from people who they recruited.
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Old 17.03.2014, 18:42
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

Another vote for Accurity, I was with them for a few years until an employer mandated change and I would not hesitate to go back to them.
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Old 20.03.2015, 15:12
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

Really trying to dig round this site, and would appreciate if someone can answer my question related to payroll companies.

My wife, who has just joined me in CH, is presently on a B-permit. She has been approached by an organization to do a short project for them - work payable on delivery. There is potential more projects could emerge in the future after this work. Would a payroll company, such as Accurity be able to handle this, are there ever any issues using them, connecting them with client etc.?

I am fully aware about einzelfirma's (which is our preference but might not be possible), but would love to know if there are reasons you couldn't use a payroll company, if our plan to set up a einzelfirma fails?

MANY thanks in advance!
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Old 15.03.2017, 21:53
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

Hello forum,

I got a potential oppurtunity to work in Switzerland, but instead working directly for an employer as it always the case so far, I would work for an agency. Furthermore, the agency declares theirself as "umbrella" company, whereas I would be a contractor(Freelancer) and I would work for a client, delivering IT services.

In regards to this topic I would have few questions, which I wasn't able to answer by googling:

1. Mostly I'm concerned about being ripped off, because neither the Freelancer rate or the employer's deductions (deductions before gross) wouldn't be indicated on a payslip and employer could manipulate these - e.g. not paying, or paying smaller amount of AHV and other contributions. As a result there would be much less or no money paid for my retirement (or there would be less amount of money which I can claim back, in case I would leave CH).

To quote them:
"In either a contract or a (sample) pay slip we are not allowed to show the all incl. Freelancer rate."

Altough they have *stated* what would be my Freelancer rate, this number would be never included in contract/payslip, neither would be the breakdown of "Freelancer rate - gross" amount. It's a black hole.

It also stated:
"In addition we are obliged to pay pension contributions. We could not avoid to include it in your pay-slip but we can minimize it."

They can manipulate pension contributions? This sounds a bit dodgy.

2. I'm also concerned that they would be able to manipulate the deductions after gross salary - e.g. pay less tax than stated on the slip. Again, not good.


Anyhow, here is there quote of most important paragraph, so you can get the bigger picture:

"We, as an umbrella company, have to pay the obligated employer costs directly to the Swiss government for each contractor. In either a contract or a (sample) pay slip we are not allowed to show the all incl. Freelancer rate.

In your case it is CHF XXX.XX all incl. per day minus employer costs = YYY.YY CHF per day (gross rate). The gross rate is the amount used in your sample pay slip. Out of this rate you will only need to pay the employEE deductions and your personal tax. As mentioned on the phone since this is a sample I couldn’t take into consideration your familiar status therefore children allowance or other allowances you may be entitled to receive are not included. In addition we are obliged to pay pension contributions. We could not avoid to include it in your pay-slip but we can minimize it."

So in short, do I worry a bit too much? There are plenty of bad stories about these intermediate employers. If not, how can I make this stuff transparent and how can I legally protect myself?

thank you.
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Old 15.03.2017, 23:08
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

What is your nationality/permit status in France?
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Old 15.03.2017, 23:50
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

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What is your nationality/permit status in France?
I'm EU citizen and I've already initiated procedure for temporary worker visa in Switzerland. So far so good.
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Old 16.03.2017, 08:37
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

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So in short, do I worry a bit too much?
Yes. The umbrella company is your employer, and just like any other employer, it will pay employer's social contribution, which, as they state, cannot legally appear on your payslip nor in your employment contract. Just like any other employer, they have to enroll their employee in a pension scheme - the amount that goes into the pension scheme depends on the pension. Hence, it can be minimised by choosing the minimum legal pension. They tell you how much they're putting in.

The client pays a fee. You do not know how much this is, usually. The agency that got you work takes a percentage of that fee - perhaps 20%, though more or less isn't unusual. The remainder goes to the umbrella company. You have been told how much this remainder is - this is effectively your rate.

The umbrella company deduct their administration fee. They then do a calculation to figure out what salary covers the rest, including employers social contribution, and perhaps some other deductions to cover, e.g. holiday pay, sick pay, inurances. Most umbrella companies publish their fees and will tell you the deductions for holiday pay etc. Since you have all this information, and you can easily find out what the employers social contributions should be, you can calculate whether the umbrella company is ripping you off.

Maybe you come from a country where ripping one another off with sneaky devices is common practice, as you seem a little paranoid. While it isn't perfect, things tend not to work like that here.
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Old 16.03.2017, 08:37
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

Are you moving to Switzerland? If not, then the only possible permit would be a G (cross border) permit and I'm not sure they can be obtained via an agency.

https://www.sem.admin.ch/sem/en/home...g_eu_efta.html

Only other possibility would be to use the short term registration procedure, but that limits you to 90 days a year.

https://www.sem.admin.ch/sem/en/home...verfahren.html

In any case it sounds a bit dodgy to me on the salary slip side of things. I can't see why they wouldn't be able to provide info on what deductions, etc, are made. But I don't know the freelance/agency market at all.
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Old 16.03.2017, 08:40
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

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In any case it sounds a bit dodgy to me on the salary slip side of things. I can't see why they wouldn't be able to provide info on what deductions, etc, are made. But I don't know the freelance/agency market at all.
It seems they will tell him these things (unlike most employers), informally, but won't put it on the payslip or in the contract (exactly like other employers). What many peopel going through brollies fail to realise is that ALL employment costs come out of "their" fee. If employers contributions were rolled into employees contributions (with a corresponding rise in salary), the taxation system would be more transparent. But employer contributions are a good way for governments to hide what is essentially another income tax.
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Old 16.03.2017, 09:17
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

When I contracted​, I fully understood the nature of my contract, how I was paid, and how employer stuff worked.

This was in the UK , Malta and in Switzerland.

If you don't understand this, then maybe contracting is not for you. It's also simple enough to spreadsheet it up and work it out in advance to get an estimate within a few chuffs.

The only 2 things to watch are
- agency fee. No more than 20%
- how public holidays are remunerated

In the holiday case, Swisslinx mentioned above used to pay it out in advance with your salary if you signed a disclaimer.

Now, the hidden tax thing is quite low here. It's a proper reaming out in other countries... But it's hidden for salaried folk

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It seems they will tell him these things (unlike most employers), informally, but won't put it on the payslip or in the contract (exactly like other employers). What many peopel going through brollies fail to realise is that ALL employment costs come out of "their" fee. If employers contributions were rolled into employees contributions (with a corresponding rise in salary), the taxation system would be more transparent. But employer contributions are a good way for governments to hide what is essentially another income tax.
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Old 16.03.2017, 13:38
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

@gbn: No it's not simple and it's not straightforward. That's especially the case, if you weren't handled the contract yet and if you're fresh in the industry. In addition things get much more tricky when trying to implement things in Switzerland.

And I don't know why would I give up with contracting. I'm not talking about enrolling Harward, but about potential pitfals in regards to this kind of employment. I never "just sign the fukin papers", especially if they would be in German.

@NotAllThere: that was damn helpful. Thanks. I am paranoid, because in my country it's almost a standard to screw up foreign workers, who are employed via agency. If somebody complains that he was screwed by employer, the first question you would ask him is: "Did you work under agency?"
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Old 16.03.2017, 13:53
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

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@gbn: No it's not simple and it's not straightforward. That's especially the case, if you weren't handled the contract yet and if you're fresh in the industry. In addition things get much more tricky when trying to implement things in Switzerland. ...
If you are "fresh in the industry", why are you contracting without understanding how it works? Go permanent.

An umbrella is an umbrella, whether UK, Malta or Switzerland which are the 3 places I have been contracting under an umbrella. Only the numbers are different
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Old 16.03.2017, 14:01
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

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If you are "fresh in the industry", why are you contracting without understanding how it works? Go permanent.

An umbrella is an umbrella, whether UK, Malta or Switzerland which are the 3 places I have been contracting under an umbrella. Only the numbers are different
because it is the way how I was offered a job in Switzerland. If it was my choice I'd obviously opt for perma, but as getting a job in Switzerland is one big lottery, I can't be much picky, right?

btw, you also work in IT?
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Old 16.03.2017, 14:02
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Re: Freelance Consultants - How NOT to get ripped off by intermediaries

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because it is the way how I was offered a job in Switzerland. If it was my choice I'd obviously opt for perma, but as getting a job in Switzerland is one big lottery, I can't be much picky, right?

btw, you also work in IT?
25 years in IT. Contracting and permanent in 3 different countries.
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