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5. Calculating Your French Income Tax Liability

  1. Composition of Your Household
  2. Income Tax Rates
  3. Income Tax Allowances
  4. Income Tax Credits

5.2. French Income Tax Rates/Bands

5.2.1. Income Tax Rates/Bands 2018

There are five tax rates and bands on net taxable income, as follows:

Income Share Tax Rate
Up to €9,807 0%
Between €9,807 - €27,086 14%
Between €27,086 - €72,617 30%
Between €72,617 - €153,783 41%
Above €153,783 45%

The rates are applied on a sliced basis so that each household 'part’ of the income is charged on a progressive basis, as we outlined in the previous section. Thus, if a couple have net income of €30,000 in the year there are two 'parts' of €15,000, with each part taxed using the scale rates.

Example: Assume a household of two adults on a joint net taxable income of €30,000. In the first place their income is divided into two parts of €15,000. Each part is then taxed on a fractional basis using the tax bands. The first €9,807 of each part is zero rated, and the remainder for each part then charged at 14%. The tax payable by each is then multiplied by two to give the total tax payable.

Only if you were a single person household would you be charged as one 'part' on your income. Thus, a single person with taxable income of €25,000 would be charged at the rate of 14% on €15,193 (€25,000 - €9,807), which gives an actual rate on total taxable income of around 8.5%.

There are then a number of corrections made to your tax liability.

First, as we stated in the previous page, there is a cap on the tax benefit that is granted for dependants arising out of the division of the household into 'parts'.

The level of ceiling depends on the size and composition of the household, but as a general rule it is €1,527 (2018 for 2017 income) for each part. So for two children the maximum reduction is €3,054.

Second, a discount mechanism (décote fiscal) operates for those who pay little by way of income tax. This discount operates to ease in the imposition of income tax on a household that becomes liable.

So for 2018 (for income earned in 2017) if you are nominally liable to pay tax of less than €1,569 (single person) or €2,585 (couple), a reduction in income tax is granted to you on a formula basis that lowers the actual amount you would be required to pay.

The formula for the reduction is characteristically complex, being the difference between 75% of the tax limit threshold above, and 75% of your notional tax charge. The reduction normally works out at a few hundred euros.

Third, a further reduction of 20% in tax liability applies where your net taxable income is no greater than €18,685 for single person (one part) and €37,370 for a couple. The levels are increased by €3,737 for each half-part, so the threshold for a couple with two children is €44,844. The reduction also applies on a digressive basis for income up to €20,705 (single person) and €41,410 (couple), with higher thresholds if you have dependants. The reduction is applied after deduction of the décote fiscal.

Finally, if the tax due is no greater than €61 (2018), it is not charged.

5.2.2. Exemption Thresholds

In practice, less than 50% of inhabitants in France pay any income tax at all; only around 14% pay at the rate of 30%, and less than 1% pay at the rate of 45%.

The following table shows the maximum net taxable income below which a couple living on their own, and with a varying number of dependants in the household, would not be taxed.

These figures are for 2018 (2017 income).

As can be seen, a couple with no dependants would not pay any income tax in 2018 if their net taxable income in 2017 was no greater than €27,838.

Number of Parts Nil Imposition
2 Parts €27,838
2.5 Parts €32,742
3 Parts €37,645
3.5 Parts €42,549
4 Parts €47,452
4.5 Parts €52,356
5 Parts €57,259

The following table shows the same analysis for a single person, who would pay no income tax living on their own with an income no greater than €14,917. The table also shows their nil imposition threshold with dependants in the household.

Number of Parts Nil Imposition
1 Part €14,917
1.5 Parts €19,821
2 Parts €24,724
2.5 Parts €29,628
3 Parts €34,503
3.5 Parts €39,378
4 Parts €44,281

5.2.3. Income Tax Payable 2018

An article in our Newsletter French Income Tax Payable in 2017 gives a summary of the actual tax payable at different levels of net income for a single person and a married couple/civil partners with no dependants in 2017. We will update for 2018 as soon as possible. The figures will be broadly similar to 2017.

You can also use the following formula to calculate (approximately) the amount of tax you will pay in 2018.

Income Tax Rate Calculation
Up to €9 807 € 0 %
€9,807 to €27,086 14% (I X 0.14) - (1,372.98 x N)
€27,086 to €72,617 30% (I X 0.30) - (5,706.74 x N)
€72,617 to €153,783 41% (I X 0.41) - (13,694.61 x N)
€153,783+ 45% (I X 0.45) - (19,845.93 x N)
  • I = Net taxable income
  • N = Number of parts in the household

Thus, a household with net taxable income of €50,000 and three household 'parts'. The total income is divided by 3, being €50,000/3 = €16,666. This amount is in the 14% band of taxation, so the calculation is (€50,000 X 0.14%) - €1,372.98 X 3) = €2,881.

The result will before application of the ceiling under the quodient familial, and any credits or reductions in tax to which you may be entitled.

5.2.4. Social Charges

As well as your liability to income tax you also need to consider your liability to the income tax by another name, that of the social charges, which you can read about at Social Charges.

5.2.5. Contribution Exceptionnelle sur les Hauts Revenus

In addition to the basic rates of income tax those fortunate few with a taxable income of upwards of €250,000 pa are liable for a special tax called contribution exceptionnelle sur les hauts revenus.

This tax is at the rate of 3% on income up to €500,000, and at the rate of 4% on income above €500,000.

Married couples and those in a civil partnership are exempt up to €500,000, when they then become liable at the rate of 3% to €1m, and 4% above this figure.

The tax is imposed on net income, after determination of the tax liability under the standard scale rates.

Next: French Tax Allowances

Back: Composition of Your Household

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