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France changes payslips to make tax declarations easier

The French Government has ordered the modification of payslips from January 1st to make it easier for people to fill out their annual tax declarations. Here's what the changes mean.

Published: 27 January 2022 16:30 CET
From January 1st 2022, French payslips have been simplified.
From January 1st 2022, French payslips have been simplified. Here is what you need to know. (Photo by DAMIEN MEYER / AFP)

Filing a tax return in France can be a complicated procedure – particularly when payslips are peppered with confusing acronyms like CSG, CRDS, APE and NAF. 

The French tax system is undergoing a change with the recent introduction of deduction at source (sometimes known as PAYE) for employees. 

However, for the moment most employees still have to file the annual tax declaration – even if all their taxes have already been deducted from their payslips and therefore their total tax bill is €0.

Now the French Government has passed a decree to simplify payslips and make it easier to work out how much of your income you need to declare. 

READ ALSO How to understand your French payslip

From January 1st, all French payslips must contain the following details in an easily identifiable section:

  • The amount deducted from the payment through prélèvement à la source (PAYE, or deduction at source);
  • The amount of overtime pay which is exempt from taxation; 
  • The amount of money you have earned which can still be taxed – or le montant du salaire net imposable

This last point is the most important because if you need to manually enter your earnings onto a tax return (which is the case for people declaring their earnings in France for the first time or filing their return in the post), this is the amount of taxable income you will have to declare.  

The new payslips will look something like this: 

This is the model for the new payslips introduced in France.

This is the model for the new payslips introduced in France. The impôt sur revenu box near the bottom describes how much of your work income can be taxed. Credit: legifrance.gouv.fr

When you file your tax return online, many of the fields are filled in automatically, but this new payslip makes it easier to check whether you have been taxed the right amount. 

Bear in mind that it is not just work income that is taxed in France. If you own a second home that you rent out in France, you will also need to declare these earnings.

If you live in a French property that you own, you will probably also need to pay the taxe foncière and the taxe d’habitation but these are declared separately from the annual income tax declaration. 

We have previously covered who needs to declare their income in France HERE. 

READ MORE

The online portal for declaring your 2021 income opens in April. 

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COST OF LIVING

What is considered a good salary in Paris?

The higher-paying jobs are heavily concentrated in the French capital, but set against that is the high cost of living - especially the cost of renting or buying a home. So what is considered a 'high-earner' in Paris?

Published: 25 June 2024 16:51 CEST
What is considered a good salary in Paris?

Centrist Renaissance candidate Sylvain Maillard, running for re-election in France’s snap parliamentary elections, was trying to highlight the high cost of living in the capital in a debate on RMC Radio 

“You have extremely expensive rents [in Paris], between €1,500 and €1,700, and then there are all the charges and taxes to pay,” he said.

But what most people seized on was his comment that anyone earning €4,000 a month after tax would not be considered rich in Paris – he predictably was accused of being out of touch with French people’s lives.

There’s no doubt that €4,000 a month is good salary that most people would be happy with – but how much do you need to earn to be considered ‘rich’ in Paris?

National averages

Earlier this year, the independent Observatoire des Inégalités calculated poverty and wealth levels in France.

READ ALSO How much money do you need to be considered rich in France?

According to its calculations, to be considered ‘rich’ in France, a single person with no dependants needs to earn more than €3,860 per month, after taxes and social charges. Around eight percent of single workers have this sum deposited into their bank balance every month, it said.

A total of 23 percent of workers take home €3,000 or more every month, while the top 10 percent clear €4,170. 

To be in the top one percent of earners in France in 2024, one person must bring in at least €10,000 per month. After taxes and social charges.

The median income – the median is the ‘middle value’ of a range of totals – of tax households in mainland France is €1,923 per month after taxes and social charges, according to INSEE 2021 data, which means that a ‘rich’ person earns about twice as much as a person on the median income, according to the Observatoire.

Paris situation

About 75 percent of people living in Paris earn less than €4,458 per month, according to Insee data – so according to those calculations, 25 percent of Parisians earn the equivalent of the top 10 percent in France. 

But that city-wide average still hides a wide degree of variation. In the sixth arrondissement, the median income is €4,358 per month, after tax. In the seventh, it’s €4,255.  Further out, those bringing home €4,600 a month in the 19th and 20th arrondissements are among the top 10 percent in wealth terms.

But still, the median income in Paris is €2,639, significantly higher than the €1,923 France-wide median.

That would mean – using the Observatoire des Inégalités’ starting point for wealth – that a Paris resident, living on their own, would have to bring home €5,278 per month to be considered ‘rich’. 

France is a heavily centralised country, with many of the highest-paying industries concentrated within the capital, meaning there is much more opportunity to secure a high-wage job if you live in Paris.

Cost of living

Even these figures should all be taken with a pinch of salt because of the relatively high cost of living in the capital, compared to elsewhere in France. Paris is objectively an expensive place to call home.

In 2023, France Stratégie published a report on the disposable income of French households, after housing, food and transport costs were deducted. It found that, on average, people living in the Paris region had more left to spend, due to higher incomes and despite the fact that housing costs more.

It’s the income paradox in action. A person with a take-home salary of €4,000 per month has more money to spend if they live and work outside Paris. But they’re much more likely to earn that much if they live and work in Paris, where it’s not as valuable. 

Someone who earns a ‘rich-level’ salary in Paris might not appear rich – because they live in an expensive area, and a surrounded by very wealthy people in property that’s out of reach all-but the fattest of wallets. But they’re still earning more than twice the median income in France.

And that’s what Sylvain Maillard was getting at, clumsily as he may have expressed it.

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