Tax Withholding at source (employer) - Changes for players starting the 1st of January 2019

Dec 19, 2018

The French tax system evolves starting January 1st, 2019. The tax deduction will be done directly every month from your pay (directly from the source/employer). The big change for you is that the income tax will no longer be calculated on your earnings of the previous year but on your current salary.

Here are some essential elements to know to make this transition as smooth as possible.

Types of income affected ?

From January 2019, you will be taxable on your income as soon as you perceive it. This includes :

  • Salaries
  • Pensions
  • Unemployment benefit
  • The incomes of self-employment
  • Rental income/property income revenue

 What will your tax rate be ?

In the course of the summer of 2018, the Tax Administration has notified, on your tax notice, a personalized rate of deduction.

In October 2018, this rate will be sent to your employer by the tax authorities.

If your situation does not correspond to the rate applied to you (because you are married, “pacsés”, or you have dependent children, etc ...), you can contact the administration to make the necessary changes related to your tax rate bracket. The rate change can take up to 90 days.

From January 1st, this rate will be applied directly to your pay check. This means that your pay slip for February 2019 will be reduced because part of your salary will be used to pay your taxes.

For property income: the tax will be the subject of installments calculated by the administration and paid by you monthly or quarterly.

Neutral rate

This neutral rate will be applied:

  • to all single employees and without children
  • to anyone who has not declared income in 2017

Neutral rate scale for taxable income at source for 2019

At any moment if my situation changes:

  • I can make a simulation for my new tax rate at impots.gouv.fr
  • Under certain conditions I can ask to change my installments rate
  • My new tax amount appears immediately on my pay slip

And for your 2018 taxes?

The revenues for 2018 are therefore not, in principle, taxable in 2019, because of the reform. 

 In order to prevent taxpayers from artificially inflating their revenues in 2018, certain revenues will remain taxable in 2019 according to the usual terms and conditions: Extraordinary income, Capital gains and property...

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