Withholding Tax France

On 1 January 2019, the government introduced the withholding tax in France (Prélèvement à la source or short ‘PAS’) to streamline the payment of income tax. It is similar to the PAY-AS-YOU-EARN system in other countries. It insures that income tax is paid in the same year as it is earned. The tax authority transmits the rate and the employer withholds the tax directly from the monthly salary. The monthly withholding tax paid is mentioned on the French payslip as well as the YTD taxable income.

French withholding tax rate transmitted to the employer

The withholding tax rate communicated to the employer usually corresponds to the rate applied in the latest tax return. However, Taxpayers may ask the tax authorities to adjust the rate according to their circumstances (for instance in case of a change of the familiy situation such as the birth of a child, higher or lower professional expenses), in which case the rate will be recalculated. My Payroll Pro as your French payroll provider will regularly check for the latest tax rate before preparing the payroll. This is part of our payroll services in France but, depending on the transmission delays from the tax authorities, it can take up to two months to be integrated.
By adapting the withholding tax rate to the circumstances the tax payer can avoid any surprising back tax claims.
If the employee doesn’t want to that the personal withholding tax rate is communicated to the employer, he can chose the non personal rate refered to as ‘taux neutre’. The employer will then apply the official tax scale.
The final tax rate will only be determined after your income tax return. Any overpaid taxes will be refunded, any underpaid taxes will be claimed.

Neutral withholding tax rate in France: 2022 tax scale

If the employee opts for a neutral rate because he doesn’t want to share his personal withholding tax rate, the employer will have to apply the 2022 French withholding tax scale.

Monthly taxable salary tax rate
less than 1440 € 0 %
more than 1440 € and less than 1496 € 0.5 %
more than 1496 € and less than 1592 € 1.3 %
more than 1592 € and less than 1699 € 2.1 %
more than 1699 € and less than 1816 € 2.9 %
more than 1816 € and less than 1913 € 3.5 %
more than 1913 € and less than 2040 € 4.1 %
more than 2040 € and less than 2414 € 5.3 %
more than 2414 € and less than 2763 € 7.5 %
more than 2763 € and less than 3147 € 9.9 %
more than 3147 € and less than 3543 € 11.9 %
more than 3543 € and less than 4134 € 13.8 %
more than 4134 € and less than 4956 € 15.8 %
more than 4956€ and less than 6202 € 17.9 %
more than 6202 € and less than 7747 € 20 %
more than 7747 € and less than 10752 € 24 %
more than 10752 € and less than 14563 € 28 %
more than 14563 € and less than 22860 € 33 %
more than 22860 € and less than 48967 € 38 %
more than 48967 € and less than 4956 € 43 %

Income tax return filing

It remains obligatory to declare the income tax. This can be done online. The deadlines are set each year between may and june for the previous year, with extended deadlines for online filing.
The tax return is pre-filled with the primary earnings such as wages and salaries and pensions. All that needs to be done is checking the amounts, amend them if needed, and add any additional income and expenses.
If no changes need to be made to the pre-filled return, it can be validated with a few clicks.

Income tax scale 2022

The final tax will be calculated based on the total income of the taxable household, the number of taxable persons and the income tax scale.

Bracket tax rate Maximum amount per bracket
up to 10 225 € 0 % 0 €
between 10 225 € and 26 070 € 11 % 1743 €
between 26 070 € and 74 545 € 30 % 14543 €
between 74 545 € and 160 336 € 41 % 35174 €
more than 160 336 € 45 % no limit

Let’s take a simplified example:
Single person with a taxable net income of € 35 000
Scale 1: 0 €
Scale 2: 1 743 €
Scale 3: 2 679 €
Total Tax payable: 4 422 €
If that person already paid 4800 € based on the French withholding tax via the payroll in France, the overpaid withholding tax of 378 € will be refunded.

How to get a French tax number

For employees moving to France for the first time there will be several administrative task to be completed in order to get registered in France. These include applying for a French social security number as well as a tax registration number.
There are two ways to obtain a French tax number:
• by application
• after the first income tax declaration

Application for a tax number

Employees who do not have a tax number, can request it from one of the offices of the public tax center at the counter, by postal mail or online.
In order to apply online it is necessary to firstly, fill out a contact form with the personal and contact details and secondly, complete the application by sending by email a copy of the passport or ID card, family record book and optional the form 2043 to apply for a personal withholding tax rate. Once your application has been processed, the tax authority will send a notification with the instructions for the set up of the account on impots.gouv.fr. On this account all online declaration and payment services will be available.

Application for a personal withholding tax rate – form 2043

At the same time as applying for the tax number, it is possible to apply for a personal provisional withholding tax rate by sending the Form 2043 to the tax office by mail. It is recommended to take this step as soon as possible, even before having actually started to work as soon as the income is predictable. This will enable the employer to apply a personal withholding tax rate. So it shortens as much as possible the period during which the employer – for lack of a personalized rate – will apply the default rate or 0 %.

Tax number after first income tax filing

For those who did not apply for the tax number, the first income tax return must be filed by paper declaration (Form No. 2042). The income tax number will then be communicated with the first tax return. It will be possible to declare electronically the following year after obtaining the credentials. It is only the following year, after completion of the first tax return, that the tax authorities will be able to calculate the personal withholding tax rate. And this rate will only apply from September on (for instance in September 2021 if started working in 2020).
To be noted: as long as you are not registered, it is possible that the tax authorities will not communicate any withholding tax rate to the employer (neither personal nor default rate) leading to an application of a rate of 0 %. This means that the tax authorities will claim a back tax after the filing of the income tax declaration.

Other employee deductions

Withholding tax is not the only deduction. To calculate the net salary in France further deductions, notably social contributions apply.

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