Cesu v Auto Entrepreneur--how much to charge?!

Hello and season's greetings!

I've been starting to do a bit of tutoring on the side for friends etc and am wondering how any of you deal with charging between the two systems (for anything, doesn't have to be teaching).

I've done a simulation and if I want to earn 20/hour with CESU, I'd just charge the 20--they pay about 16 in 'charges' and end up paying 18 after tax.

If I wanted to earn the 'equivalent' 20 euros with the AE settup, I'd need to charge 20+ 29% (charges--I think it's a bit much, but more or less) which brings me to about 27-28 euros.

But the AE settup doesn't really compare in terms of the 'cotisations' so, in some ways, the 20 euros paid through CESU seems better. . .

Does anyone work in both systems? How do you charge? Or does everyone just end up paying through CESU??

Thanks--I hope the above even made sense!

Simon an activité professionnelle is either being an employee OR self employed SO you get a credit if you are either working or registered with pole emploi - the case for the majority of people. It is only a reduction fiscale that you need to actually PAY impot sur le revenu

Helen - it entirely depends on the status of the 'employer'. So, the decision on whether the employer receives either a credit, or a reduction is as follows but - bear in mind that most CESU 'employers' are neither registered as professionals nor registered unemployed......

(Source : CESU)

Qui est concerné par le crédit d'impôt ou la réduction fiscale ?

Vous pouvez bénéficier d’un crédit ou d’une réduction d’impôt si vous remplissez les critères ci-dessous :

  • Crédit d’impôt :
    - si vous exercez une activité professionnelle ;
    - ou si vous êtes inscrit sur la liste des demandeurs d’emploi durant 3 mois au moins au cours de l’année.

  • Si vous êtes mariés ou avez conclu un PACS, vous devez tous les deux satisfaire à l’une ou l’autre condition.Ce crédit d’impôt est imputé sur l’impôt sur le revenu. S’il est supérieur à l’impôt dû, l’excédent vous est restitué.

Par exemple, vous bénéficiez d'un crédit d'impôt de 1 500 € :
- Si vous n’êtes pas imposable le Trésor public vous restituera 1 500 €.
- Si vous êtes redevable d'un impôt de 500 €, vous recevrez du Trésor public un chèque de la différence, soit 1 000 €.
  • Réduction fiscale :
    - Vous ne remplissez pas les conditions pour bénéficier du crédit d’impôt;
    - et vous êtes imposable.

Ainsi par exemple, vous êtes retraité ou vivez en couple dont un seul des conjoints travaille ou est demandeur d’emploi et vous bénéficiez d'une réduction fiscale de 1 500 €.
Si vous êtes redevable d'un impôt de 500 €, vous n'aurez pas d'impôt à payer, en revanche l'excédent de 1 000 € ne vous sera pas restitué par le Trésor public.

Simon are you 100% sure of that as in the past although my now ex partner didn't pay income tax he was eligble for tax relief and ursaff told me that my employer under the cesu scheme could claim back the 50% whether they actually paid income tax or not

Importantly - the 'employer' in the CESU scenario can ONLY claim back 50% of their costs IF they are due to pay income tax i.e. your 'household' needs to be liable to pay income tax in order to apply any deductions / relief! Remember - just over 47% of French households don't pay any income tax.

well as a start if you only have on 'client' you can't be AE (now called micro entrepreneur) anyway.

The other things to remember that if you are paid via cesu your client can claim back 50% of what they paid you on the following year's tax return. As an AE as well as paying cotisations (22% + 0.01% formation cotisation) you would be liable for cfe tax once a year from your second year - this tax is set depending on your commune but for example the lowest cfe charge in my own commune (50660) is 300€ (this is the amount I'm expected to pay next year even though I literally work from a corner of the table on my pc) .

Personally my advice is that cesu is better for you

I cant help you here, but I'm very interested in finding out what other people think!