Payroll taxes in
France

The French tax administration  is called the “Direction Générale des Finances Publiques”.

If employers are not subject to the value-added tax (VAT) or are subject to the VAT on less than 90% of total sales, they must remit payroll taxes on wages. Rates range from 4.25% to 20% based on each employee’s income, although employers don’t have to pay if the tax owed is less than €1,200 annually.

• 25% on individual salaries up to €7,705;
• 5% on the portion of the salary in €7,705 -€15,385 bracket;
• 6% in €15,385 – €151,965 bracket;
• 20% on the excess over €151,965.

Payroll in France is among the most complex in Europe, with employers responsible for reporting employee wages for income tax purposes, withholding employee social insurance contributions, paying additional social insurance contributions from their revenue as a percentage of employee income and following requirements of a payroll tax based on the country’s value-added tax and other possible taxes.

Employee payroll tax is made up of assigned taxes for the three branches of social security system and includes both basic and supplementary coverage. Since 2019, a Pay-As-You-Earn (PAYE) or ‘prélèvement à la source’ system has been implemented throughout France.

The annual income tax return is generally a family return (Quotient familial) according to the taxpayer’s family composition and marital status. Married couples are required to file jointly – exceptions are allowed in very limited circumstances. Adult children may be claimed as dependents if they are under 21 years of age or if they are students under the age of 25.

• Standard rate: 20%
• Reduced rate: 10% (unprocessed agricultural products, museums, housing improvement…)
• Reduced rate: 5% (most food products, gas, electricity, cinema…)
• Special rate: 1% (some medicines, television license fee…)