Company size in the PSO-Prestatieladder: who counts?
Company size is the average number of people and the average number of FTEs your organisation had in the reference year. That number is the denominator of your direct social contribution. The bigger your company, the more target group employees you need for the same level. The manual describes the rules in sections 3.1.2 (determining) and 3.5.3 (testing) of the PSO-handleiding 2.6 (PSO manual 2.6) from TNO . For how company size fits into the level calculation, see PSO levels and calculation. For which year you count, see reference year and reference date.
It sounds like a simple count, but the rules decide a lot. A freelancer (zzp’er, a self-employed person without staff) that you hire does not count, but a temporary agency worker does. That difference can change the ratio considerably.
On this page
- The three groups that count
- What does not count
- Group companies and subsidiary entities
- How the auditor checks company size
- Common mistakes
The three groups that count
The manual divides workers into three groups. Each group has its own rule.
| Group | Who | Counts towards company size |
|---|---|---|
| 1 | All employees with a regular employment contract, including target group employees | Yes |
| 2 | All other workers under a temporary agency, secondment or payroll agreement, including target group employees | Yes |
| 3 | Only interns, work experience placements and trial placements that fall under the target group | Yes, target group only |
Group 3 is the exception. An intern without target group status does not count. An intern who does fall under the target group does count, because they also belong to the direct contribution.
The same division applies to FTEs. It concerns the average number of FTEs over the reference year, not the number of people on one day. How to calculate the averages is set out in appendix 1B of the manual.
What does not count
A few categories fall outside the count. The most important ones:
- Direct hiring of freelancers. Self-employed people without staff are not taken into account. You pay them, but they do not increase your company size.
- Workers you only buy in indirectly. Purchasing from a PSO supplier counts as indirect contribution, not as your own employee.
There is a big difference between hiring a freelancer directly and hiring through a temporary agency. Agency staff count towards company size. A freelancer does not. Check how you have arranged each hiring relationship.
Group companies and subsidiary entities
If you are a lead applicant with subsidiary entities, they are combined into one company size. The manual says the lead applicant always counts in full, including any subsidiary entities. Employees who are made available within a group and work on a lasting basis under the direction of the applying organisation are counted as working under a regular contract, provided the employee is employed within the group on a regular contract.
For what this means for the calculation tool, see subsidiary entities in the PSO.
The rule for employees made available has five conditions. The employee is employed within the group on a regular contract. There is a written hire-out agreement. That agreement shows how direction and supervision are arranged. The costs are demonstrably charged on through invoices. And the hours entered are based on hours actually worked and invoiced. If a subsidiary entity falls under the lead applicant for only part of the reference year, it counts only for that part.
How the auditor checks company size
The auditor checks company size on the basis of the personnel administration, the payroll administration or the annual report. For secondment, you must show the hiring through the financial administration, for example a general ledger account for hired-in staff. This is how the auditor checks how many staffing agencies you use, and whether there are invoices for people who are not in the personnel administration.
If you do not work with staffing agencies, the auditor shows it through the list of creditors. Make sure that list is correct, because it is often the first thing the auditor asks for.
The manual makes the number of measurement points depend on how your workforce changes over time. If the difference between the lowest and highest number of employees is less than 10%, two measurement points are enough: at the start and at the end of the reference year. With variation of 10 to 30%, seasonal work or changing flexible deployment, at least four measurement points are needed, for example per quarter. With strong fluctuations, such as in a staffing agency, a monthly measurement point makes sense. You must be able to justify your choice, and the auditor must be able to check the calculation. See also reference year and reference date.
Common mistakes
- Counting freelancers. This makes your company size too large, and the auditor corrects it.
- Forgetting temporary agency workers. Group 2 counts. If you only use your own payroll list, the figure comes out too low.
- Counting interns without target group status. Only target group interns count.
- Using the current workforce. Company size is about the reference year, not today.
Worked example with three types of workers
Take a company in the reference year, with fictional numbers. It shows which groups count and which do not.
| Type of worker | Number (fictional) | Counts? | Explanation |
|---|---|---|---|
| Permanent and temporary employees | 10 | Yes | Group 1, regular employment contract |
| Temporary agency workers | 3 | Yes | Group 2, temporary agency contract |
| Freelancer, hired directly | 2 | No | Not taken into account |
| Intern without target group status | 1 | No | Group 3 counts only the target group |
| Intern from the target group | 1 | Yes | Group 3, within the target group |
In this example, company size comes to 14 people, not 17. The freelancers and the non-target group intern fall outside the count. If you calculate your size by hand, you often end up too high or too low. Use the calculation tool and check the result against the personnel administration.
Note that FTEs are counted in the same way, but weighted by the time people worked in the reference year. Someone who worked for half a year counts as half. The manual uses a 40-hour working week as the reference, unless your CAO has a different hours standard for one FTE. Use the same standard for company size and for the files.
The example in the manual: 80 FTE employees, 14 FTE temporary agency workers and 6 FTE target group interns give a company size of 100 FTEs. If 8 of those FTEs are target group, the unweighted social contribution is 8%.
Checklist for your company size
- Have you taken all employees with a regular employment contract from the personnel administration?
- Have you taken the temporary agency and secondment workers from the invoices and the financial administration?
- Have you excluded the freelancers hired directly?
- Have you counted only the interns and trial placements that fall under the target group?
- Have you taken the average over the reference year, and not a snapshot?
- Does the total match the list of creditors and the payroll administration?
Further reading
- Who is the PSO-Prestatieladder for? explains which company size you need to apply.
- PSO audit: how does the audit work? describes how the auditor checks company size during the audit.