Since 2019, French income tax is no longer paid a year after it is earned: it is withheld straight from the payslip, every month, by the employer. The principle is simple — a rate applied to a base — but most of the questions it raises are about details that are not obvious: which base exactly, which rate, and who decides what. This guide answers those three questions, from the employee's side and the employer's.
What withholding changes — and what it does not
The prélèvement à la source (PAS) is a collection method, not a new tax. It changes neither the progressive scale, nor the family quotient, nor tax reductions and credits. The amount owed is still calculated over a full year, at the time of the spring income tax return; the PAS simply collects it as you go.
The practical consequence is that an adjustment remains possible. If what was withheld during the year exceeds the tax finally due, the administration refunds the difference; otherwise, a balance is called in the autumn. That is also why tax reductions and credits are still paid out after the return rather than built into the monthly rate.
Which base is the tax withheld from?
This is the most commonly misunderstood point. The rate applies neither to the gross salary nor to the net paid, but to the net taxable amount (net imposable) — a third figure, shown on the payslip on a line of its own.
The net taxable amount starts from the net before tax, then adds back what is not deductible for tax purposes: the non-deductible portion of the CSG and the CRDS, plus the employer's contribution to the mandatory complementary health cover. As a result, the net taxable amount is always higher than the net before tax. If you are no longer sure what each block of the payslip stands for, our article on understanding your French payslip goes through them line by line.
Three possible rates
A single employee can be subject to three different rates, depending on their situation and their choices.
- The personalised rate is the general case. It is calculated by the tax administration from the latest income tax return, for the whole tax household, then sent to the employer.
- The individualised rate applies to married or PACSed couples taxed jointly: each partner bears a rate calculated on their own income, while joint income stays at the household rate. Since 1 September 2025 it applies automatically, unless the couple opts out. The household's total tax is unchanged: only its split between the two partners is.
- The default rate (also called the neutral or non-personalised rate) applies when the administration has sent no rate — a first job, a recent hire — or when the employee has asked for their personalised rate not to be disclosed to their employer.
That last choice comes with a catch. If the default rate withholds less than the personalised rate would, the employee must pay the difference themselves — the complément de retenue à la source — from their online personal space, no later than the last day of the month following the one in which the income was received (31 January for December income).
The default-rate grid
The default rate depends only on the amount paid: it is a banded grid, set out in III of article 204 H of the French tax code and revised each year by the finance act. For metropolitan France, the grid applicable to income received from 1 May 2026 has twenty bands. A few landmarks:
- monthly base below €1,635: 0%;
- €1,698 to under €1,807: 1.3%;
- €2,315 to under €2,738: 5.3%;
- €2,738 to under €3,135: 7.5%;
- €4,019 to under €4,690: 13.8%;
- €55,558 and above: 43%.
Two separate grids exist for the overseas departments and territories. The full grid is published in the official tax bulletin (BOFiP); use it rather than a partial reproduction such as this one as soon as an official calculation is at stake.
There is a specific allowance for short contracts — fixed-term or temporary assignment contracts with an initial term of two months or less, where no rate has been transmitted. The base is then reduced by an allowance equal to half the monthly net taxable SMIC, that is €766 since 1 June 2026, for the first two months only.
A worked example: €3,500 gross per month
Take an employee on a permanent contract in a company with more than 50 employees, paid €3,500 gross, with no personalised rate transmitted — so the default grid applies.
- Employee contributions: €729.41, giving a net before tax of €2,770.59 (figures from our simulator).
- Non-deductible CSG and CRDS added back: €99.72, so a net taxable amount of about €2,870.31.
- That base falls in the €2,738 – €3,135 band, a rate of 7.5%: the tax withheld is €215.27.
- Net paid: €2,555.32.
One point about this calculation: the net taxable amount used here is a slight underestimate, because our simulator does not model mandatory complementary health cover, whose employer share is added to the base. In most cases that gap does not change the applicable band. Still, treat the result as an order of magnitude, never as an amount to declare.
Changing your rate during the year
The personalised rate is updated every September, from the return filed in the spring. Between two updates, two levers are available, through the "Gérer mon prélèvement à la source" service in the personal space on impots.gouv.fr.
The first is a change of situation: marriage, civil partnership, divorce, death, birth. It must be reported within sixty days and triggers a recalculation of the rate.
The second is modulation, which means declaring your expected income for the current year. Upwards, it is unrestricted. Downwards, it is conditional: there must be a gap of more than 5% between the withholding resulting from the estimated income and the withholding that would apply without modulation — a threshold lowered from 10% to 5% by the 2023 finance act. A change of situation must also have been reported beforehand. In every case, the new rate applies no later than the third month following the request.
The employer's side: a collector's role
The employer does not calculate the tax. It receives a rate, applies it, remits it, and that is all. The rate is sent to it monthly by the tax administration, in return for the DSN; it comes with no information about the employee's family situation or other income, and is covered by professional secrecy.
Three rules are worth remembering. First, a transmitted rate is not valid indefinitely: it lapses at the end of the second month following the date it was made available, after which the default grid takes over. Second, for a new hire, the default grid applies as long as no rate has been received — typically on the first payslip, with the personalised rate taking over the following month. Third, remittance follows the DSN deadline: the 5th or the 15th of the following month, depending on the size of the company. Employers with fewer than 11 employees may opt for quarterly remittance, no later than the 15th of the first month of the following quarter.
A special case useful to employers established outside France: for income received from 1 January 2023, some French-source salaries they pay fall outside withholding altogether and into the instalment (acompte) regime, which the employee pays themselves (CGI, art. 204 C, B, 2°). This is not an option: where the conditions are met, the regime applies as of right.
The statute sets two cumulative conditions. The first concerns the employer, which must be established in an EU member state, or in another State or territory that has concluded with France both an administrative assistance convention against tax fraud and evasion and a mutual recovery assistance convention similar in scope to Directive 2010/24/EU — and which is not a non-cooperative State under article 238-0 A of the tax code. The second concerns the employee, and covers two situations: either they are tax resident in France and, under article 13 of Regulation (EC) No 883/2004 on working in several States, are not covered by a mandatory French social security scheme; or they are a cross-border worker resident in France, subject to the Swiss scheme but affiliated to the French general scheme under I of article L. 380-3-1 of the social security code.
Two misreadings are worth avoiding. First, working mainly abroad and only occasionally in France describes the typical case, but it is not a condition in the text: the multi-State rule of Regulation 883/2004 is what decides. Second, no withholding does not mean no reporting: the employer must declare to the tax administration each year, for each beneficiary, the net taxable amount of the salaries concerned (CGI, art. 87-0 A bis). A foreign employer whose employee is covered by French social security and reported in a DSN remains a collector like any other. Because the regime is narrow and turns on bilateral conventions that vary from State to State, have your situation confirmed by the business tax office before stopping any withholding.
Outside salaries: the instalment
Not all income has a third-party payer able to withhold the tax. Self-employed profits, rental income and maintenance payments are therefore collected as an instalment (acompte), debited directly from the taxpayer's bank account: no later than the 15th of each month, or, on option, on 15 February, 15 May, 15 August and 15 November. The quarterly option must be exercised by 1 October of the preceding year.
Key takeaways
The PAS applies a rate to a net taxable amount, which is neither the gross nor the net paid. The rate comes from the tax administration, never from the employer, and comes in three forms: personalised, individualised — now the default for couples — or non-personalised. It is updated in September, and can be modulated during the year, downwards above a 5% gap.
To see the net before tax that this whole calculation starts from, our salary simulator shows the contributions line by line. And if you are wondering why some contributions change rate above a certain level of pay, our article on the French social security ceiling explains how the bands work.
Official sources
- Légifrance — Article 204 H of the French tax code (default-rate grids)
- BOFiP — BOI-BAREME-000037: default-rate grids and the short-contract allowance
- BOFiP — Conditions for the right to modulate
- service-public.gouv.fr — Withholding tax rates
- service-public.gouv.fr — Withholding tax: obligations of the employer
- impots.gouv.fr — Managing your withholding tax rate