Tax withholding for French individual taxpayers. You should consider updating your withholding rate for 2022.
Some of you may be experiencing after-tax-day issues. One of the most common issues that may come up is that you haven’t been paying the right amount of French income tax withholding. Here are some tips to handle that issue.
We encourage you to check your withholding. Doing this now will help avoid an unexpected amount due when you prepare and file your 2022 tax return in 2023.
Sample scenarios
- Employee and pensioner: the French tax administration will communicate your withholding rate to your employer or to your pension payer in September.
- Self-employed and independent contractor: you’re required to pay French estimated income tax. The French administration will determine the amount of estimated tax and will automatically take it out from your bank account on a monthly or quarterly basis.
Update your withholding rate
- If there are changes to your personal situation: Aimlon CPA P.C. encourages you to notify the French tax administration as soon as possible so they update your withholding rate. For instance, if you get married, you should consider notifying the French tax administration because it impacts your taxes.
- If there are no changes to your personal situation: you have the option to revise up or down your withholding to reflect changes to your income. However, the rate that you determined is good until December 31. The French tax administration will not carry it over to the following years.
- If you file jointly your income tax return: the withholding rate is determined based on the information reported on your jointly filed return, not on each spouse’s income. You should use that withholding rate. However, you may elect to have your French income tax withheld using an individualized rate. The individualized rate is calculated using each spouse’s tax information. You may file the individualized rate election using your e-services account.
The standard tax withholding
Whether you’re an employee, a retiree, or a self-employed, you may request that your taxes be withheld using the standard withholding tax tables. This is relevant for instance if you don’t want your employer to know your household’s effective tax rate. The standard withholding tax table will then apply to your income. In addition, the French tax administration will not/will no longer communicate your withholding rate to your employer or payer.
You may fall under one of the three standard withholding tax tables in the French tax code. These tables reflect the applicable rate based on the taxpayer’s domicile.
- Table 1: in continental France or outside of France;
- Table 2: in Guadeloupe, La Réunion (Reunion Island) or in Martinique; and
- Table 3: in French Guiana or in Mayotte.
The standard withholding rate ranges from 0% to 43%. Your standard withholding rate is determined as follows based on your monthly taxable income:
- Table 1: from 0% if your monthly taxable income is less than EUR1,440 to 43% if it is at least EUR48,967.
- Table 2: from 0% if your monthly taxable income is less than EUR1,652 to 43% if it is at least EUR53,670.
- Table 3: from 0% if your monthly taxable income is less than EUR1,769 to 43% if it is at least EUR56,708.
The standard withholding tax table may apply to you if you didn’t file a tax return the previous year. For example, you were a dependent, you just graduated from college and started working.
France transitioned to a pay-as-you-go tax system on January 1st, 2019. French taxpayers pay the income tax as they earn or receive income during the year. Until 2018, tax was paid a year after they earn or receive the income.