SAMPLE AT SOURCE. Taxpayers who have made a rate change during the year have until December 31 to maintain it.
[Mis à jour le 10 décembre 2021 à 07h46] During the year 2021, have you experienced an increase or a decrease in income, a change of situation (birth, marriage, PACS, death …)? You have therefore decided to change your withholding tax rate. Watch out if you don’t do anything by December 31, 2021. Indeed, the new rate is only valid for the calendar year. In the absence of action on your part, the tax authorities will recalculate your rate according to the information mentioned in your last tax return, in spring 2021. To modify your rate for 2022, log in to your personal area on the impots.gouv.fr site, using your tax ID (visible on your last tax notice) and your password. Remember that you must be able to project your income for the whole of 2022.
Are you an employee and you do not want your employer to be informed of your rate of withholding tax? In this case, you can opt for the neutral rate or the non-personalized rate. This rate only takes into account your salary and not your family situation. “This option is of interest only if you receive significant income in addition to your wages,” insists the tax administration on its site. Keep in mind that in most cases, the non-personalized rate is higher than what should be applied if it took into account your family situation. “Otherwise, you will have to pay the administration every month an amount corresponding to the difference between the levy calculated with your personalized rate and that calculated by your employer.“, warns the tax authorities. Here is the scale of the neutral rate which applies since the 1er January :
Monthly withdrawal basis | Neutral rate applied |
|---|---|
Less than or equal to 1,420 euros | 0% |
From 1,420 euros to 1,475 euros | 0.5% |
From 1,475 euros to 1,570 euros | 1.3% |
From 1,570 euros to 1,676 euros | 2.1% |
From 1,676 euros to 1,791 euros | 2.9% |
From 1,791 euros to 1,887 euros | 3.5% |
From 1,887 euros to 2,012 euros | 4.1% |
From 2,012 euros to 2,381 euros | 5.3% |
From 2,381 euros to 2,725 euros | 7.5% |
From 2,725 euros to 3,104 euros | 9.9% |
From 3,104 euros to 3,494 euros | 11.9% |
From 3,494 euros to 4,077 euros | 13.8% |
From 4,077 euros to 4,888 euros | 15.8% |
From 4,888 euros to 6,116 euros | 17.9% |
From 6,116 euros to 7,640 euros | 20% |
From 7,640 euros to 10,604 euros | 24% |
From 10,604 euros to 14,362 euros | 28% |
From 14,362 euros to 22,545 euros | 33% |
From 22,545 euros to 48,292 euros | 38% |
From 48,292 euros | 43% |
How to change the rate of withholding tax?
As a direct consequence of the coronavirus health crisis, many French people have seen their income decrease. If you are in this case, employee or self-employed, know that you can inform the tax authorities, in order to adjust your rate during the year. Go to your personal space on the site impots.gouv.fr, provided with your tax identifier and your password. Click on “Manage my withholding tax” then on “Update following an increase or decrease in your income”.
First, if you adjust your rate, you will need to specify your family situation (children or dependents, etc.). You will have to mention your estimated income for the whole of the year in question. Be careful, keep in mind that for the rate change to be effective, there must be a 10% income differential. Are you self-employed and pay your taxes by installment? Know that, like any taxpayer, you can change your deposits and your tax rate at source. “Any intervention before the 22nd of the month will be taken into account for the following month”, we can read on the page dedicated to companies on the tax website. You have the possibility to request a tax rebate, using the dedicated form, available here.
Who can have a new rate applied? When ?
You may have been informed of this at the end of the online declaration procedure in the spring: your rate changes in August or September. If so, it results from a evolution of your income, that you have declared. Let’s say you changed jobs in the past year and that resulted in an increase in your salary. Mechanically, you have a priori declared more than last year. As a result, your rate of withholding tax will also be revised upwards.
This new rate must be implemented in September, once the tax authorities have verified the information you have given them. Keep in mind that it can sometimes be applied as early as August. To find out your current rate, go to your personal space on impots.gouv.fr, then “Manage my direct debit”. You have the possibility of knowing the history of your rates, by clicking on “Consult the history of all my withdrawals”.
There is, in reality, no surprise, since this mechanism is applied every year. To avoid unpleasant surprises, it is therefore strongly recommended to inform the tax authorities of the slightest change. Keep in mind that in the event of a change in income, you must be able to forecast all income received over the year, an exercise which may prove to be more difficult for some households with irregular income.
To determine your rate of withholding tax, the tax authorities take into account all the income you have received (salaries, income from assets, capital gains, etc.). It is on the site impots.gouv.fr and you get it once you file your income tax return. Here is the formula for calculating the withholding tax rate:
Keep in mind that while the tax is contemporaneous with your income, the rate is not necessarily. When personalized, it is calculated from the income you mentioned in your last tax return and depending on your family situation (the number of people you have dependents for, for example). This is the reason why your rate may have changed in September and will change again in September. LThe rate that was applied between January and August was based on previous year’s income, latest information available to the tax authorities. Thanks to the income tax return that you made in the spring, the tax authorities were able to regularize in September, if necessary..
How is the amount of withholding tax calculated?
Beforehand, it is necessary determine net taxable income, which corresponds to the net remuneration to which are added social contributions non deductible (CSG and CRDS). If you are an employee, you can read it on your last payslip. A rate of withholding tax – calculated on the basis of all your income – is applied. As a reminder, you can check it by going to the impots.gouv.fr site in your personal space or by consulting your payslip if you are an employee.
You have just entered the workforce, and have never filed a tax return until now. You will not escape the withholding tax. Otherwise, the tax administration will indeed apply a neutral, non-individualized rate, the time that you complete your tax return and specify all the income you receive during the tax year. The non-personalized neutral rate does not take into account your possible family expenses, since it is a rate applied for a single person without children.
You have the option of changing your rate. If you don’t have a tax number yet, you can use form 2043. “You will send this form to your tax office, accompanied by a copy of an identity document and, if applicable, proof of Social Security”, explains one on the public service site. “If you already have a tax number, you are not affected by this declaration. You can obtain a personalized rate by going to your personal online tax space, in the section Manage my direct debit at source”.
It is possible to make a simulation of the withholding tax, using the tool on the tax website, here. You must mention the amount of your monthly taxable income as well as your rate of withholding tax. You will then obtain the monthly amount in euros of the withholding tax.
In some cases, taxpayers may be eligible for a refund. The latter intervenes in the summer (July 20), via a transfer from the General Directorate of Public Finances, once the tax authorities have been able to consult and analyze the income statement made in the spring. What are the situations that can lead to a refund? There are two:
- Your withholding taxes were greater than the actual amount of your income tax. For example, you may not have declared a change in income during the tax year.
- You receive the remaining deposit of your tax credit received last January.
As an indication, you should recognize the transfer by the wording “REMB TAX INCOME” coming from “DGFIP FINANCES PUBLIQUES”. If you omitted cCommunicate your bank details, reimbursement is made by check.