WITHDRAWAL AT SOURCE. Have you received your payslip and the withholding tax rate is not the one you want? Do not panic, we will tell you the procedure to follow to resolve this inconvenience.
[Mis à jour le 3 février 2022 à 11h42] Since January 1, 2019, taxpayers have seen their income tax, deducted directly at source, via the application of a rate. The latter is calculated according to the information mentioned in the last tax return. Indeed, the latter remains essential each year to determine the amount of tax – and therefore if you owe a balance or if you benefit from a refund, because you have withdrawn too much during the year of taxation – and to adjust your withholding tax rate.
You now have the option of modulate your rate during the year, in the event of a change in situation or an increase in income. But beware, this modified rate is only valid for thecalendar year. Precisely, you did not think of modifying your rate of withholding tax in December 2021 for consideration from January 2022 ? Please note that the deadline was set for December 8, 2021 for consideration at the start of 2022 by your collector or for the payment of your installments. Do not panic, the application of the new desired rate will simply be quirky. However, to keep this rate or modify it for 2022, action on your part is essential. Otherwise, the rate calculated at the end of your last declaration will continue to apply.
You wish modulate your rate for 2022 because you forgot to do it in December 2021? It is always possible. The only downside is that this modification will not be taken into account from January 2022. Once the update has been carried out, collectors such as employers or pension funds will have a 2 month delay to apply this new rate.
You are an employee and you do not want your employer to be informed of your withholding tax rate? In this case, you can opt for the neutral rate or the non-personalized rate. This rate only takes into account your remuneration and not your family situation. “This option is only of interest if you receive significant income in addition to your salaries”, 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 on January 1, 2022:
Monthly debit basis | Neutral rate applied |
|---|---|
Less than or equal to 1,440 euros | 0% |
From 1,440 euros to 1,496 euros | 0.5% |
From 1,496 euros to 1,592 euros | 1.3% |
From 1,592 euros to 1,699 euros | 2.1% |
From 1,699 euros to 1,816 euros | 2.9% |
From 1,816 euros to 1,913 euros | 3.5% |
From 1,913 euros to 2,040 euros | 4.1% |
From 2,040 euros to 2,414 euros | 5.3% |
From 2,414 euros to 2,763 euros | 7.5% |
From 2,763 euros to 3,147 euros | 9.9% |
From 3,147 euros to 3,543 euros | 11.9% |
From 3,543 euros to 4,134 euros | 13.8% |
From 4,134 euros to 4,956 euros | 15.8% |
From 4,956 euros to 6,202 euros | 17.9% |
From 6,202 euros to 7,747 euros | 20% |
From 7,747 euros to 10,752 euros | 24% |
From 10,752 euros to 14,563 euros | 28% |
From 14,563 euros to 22,860 euros | 33% |
From 22,860 euros to 48,967 euros | 38% |
From €48,967 | 43% |
How do I change the withholding tax rate?
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, and this, in order to modulate your rate during the year. Go to your personal space on the site impots.gouv.fr, with your tax ID and password. Click on “Manage my deduction at source” then on “Update following an increase or decrease in your income”.
First, if you adjust your rate, you must specify your family situation (children or dependents, etc.). You will have to mention your projected 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 installments and your withholding tax rate. “Any intervention before the 22nd of the month will be taken into account for the following month”, can we read on the page dedicated to companies on the tax office 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 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 withholding tax rate will also be increased.
This new rate must be implemented in September, once the tax authorities have verified the information you have provided. 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 withholding tax”. You have the possibility to know the history of your rates, by clicking on “Consult the history of all my direct debits”.
There is, in fact, no surprise, since this mechanism is applied every year. To avoid unpleasant surprises, it is therefore strongly advised to inform the tax authorities of the slightest change. Bear in mind that in the event of changes in income, you must be able to forecast all of the income received over the year, an exercise which may prove more difficult for certain households whose income is irregular.
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 authorities will indeed apply a neutral, non-individualized rate, while you complete your tax return and specify all the income you receive during the tax year. The neutral non-personalized 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 to change your rate. If you do not yet have a tax number, you can use form 2043. “You will send this form to your tax office, accompanied by a copy of an identity document and, if necessary, proof of Social Security”, we explain on the public service site. “If you already have a tax number, you are not concerned by this declaration. You can obtain a personalized rate by going to your personal tax space online, in the Manage my withholding tax section”.
To determine your withholding tax rate, the tax authorities take into account all the income you have received (salaries, income from assets, capital gains, etc.). It is on the impots.gouv.fr website and you get it once you file your tax return. Here is, for information purposes, the formula for calculating the withholding tax rate:
Keep in mind that, if the tax is contemporaneous with your income, the rate is not necessarily so. When customized, it is calculated from the earnings you mentioned in your last tax return and according to your family situation (the number of people you have to support, for example). This is why your rate may have changed in September and will change again in September. Le rate that was applied between January and August was based on previous year’s earningslatest information available to the tax authorities. Thanks to the tax return that you made in the spring, the tax authorities were able to carry out a regularization in September, if necessary.
How is the amount of withholding tax calculated?
Beforehand, it is necessary determine net taxable incomewhich corresponds to the net remuneration to which are added the social contributions non deductible (CSG and CRDS). If you are an employee, you can read it on your last payslip. A withholding tax rate – calculated on the basis of all of your income – is applied. As a reminder, you can check this by going to the impots.gouv.fr website in your personal space or by consulting your payslip if you are an employee.
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 withholding tax rate. 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 occurs in the summer (July 20), via a transfer from the Directorate General of Public Finance, once the tax authorities have been able to consult and analyze the tax return made in the spring. What are the situations that can lead to a refund? There are two of them:
- Your source deductions 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 installment of your tax credit received last January.
As an indication, you should recognize the transfer through the wording “REMB TAX REVENUS” coming from “DGFIP FINANCES PUBLIQUES”. If you omitted communicate your bank details, the refund is made by check.