Payroll tax

Verified 01 January 2026 - Company Public Service / Directorate of Legal and Administrative Information (Prime Minister), Ministry of Finance

The payroll tax is payable by employers who employ employees and are not subject to VAT. They must also be established in mainland France or in an overseas department. The payroll tax is calculated on the remuneration paid during the year by application of a progressive scale.

It is due by everything employer domiciled or established in France, irrespective of the place of residence of the employee or of his activity, and which fulfills one of the following conditions:

  • In the year of payment of remuneration, it is not subject to the payment of VAT: titleContent
  • In the year of payment of the remuneration, it is partially taxable for VAT and was subject during the previous year to the payment of VAT on less than 90% of its Board of Directors
  • The year before payment of remuneration, less than 10% of its turnover is subject to VAT.

The tax applies in particular to the following employers:

  • Certain liberal professions
  • Public establishments other than groups of municipalities
  • Banking and financial institutions, insurance companies, certain insurance brokers and foreign exchange agents
  • Administrative or social organization (association, for-profit organization, etc.)
  • Business engaged in a civil activity (investment business, real estate business) except the business of building buildings or trading in goods
  • Landowners
  • Cooperative, mutual and professional agricultural organizations

The following employers shall be exempt payroll tax:

  • Employers whose turnover excluding tax in the previous calendar year does not exceed the limits of exemption from VAT (this is for example the case of micro-entrepreneurs)
  • State and public authorities
  • Private employers of a home worker or a childminder. It must be a full-time person or several part-time persons representing a full-time equivalent. The individual employer of a part-time employee is therefore not exempt from the tax.
  • Some agricultural employers (crop and livestock farms, dressage and training farms, etc.)
  • Higher education institutions with a State Bac +5 diploma (universities, business schools, colleges, etc.)
  • Some public institutions
  • Public cultural cooperation institutions (EPCC)
  • Public Environmental Cooperation Institutions (EPCE)

The payroll tax is based on the CSG base applicable to income from activities . Income from activities includes salaries, bonuses and miscellaneous allowances and benefits in kind or in cash.

Tableau - Amounts taken into account in calculating the payroll tax

Sums

Included in the calculation of the tax?

Amounts due in consideration or on the occasion of work

Yes

Income of artists-authors

Yes

Staff allowance and parliamentary allowance

Yes

Guaranteeing the resources of disabled workers

Yes

Income from the lease of all or part of a business, commercial, craft or industrial establishment

Yes

Occupational income of self-employed persons

Yes

Lump-sum deduction for business expenses

No

Amounts corresponding to replacement income (compensation in the event of an accident at work or illness, social security benefits paid through the employer, etc.)

No

Contributions to training insurance funds

No

Remuneration paid by industrial technical centers

No

Daily social security allowances

No

Partial activity or cessation of activity allowances

No

Part of the salary paid to apprentices equal to 11% minimum growth wage in a company with more than 10 employees (apprenticeship contracts)

No

Salaries paid to apprentices by a company with fewer than 11 employees (apprenticeship contracts)

No

Remuneration of teachers in apprenticeship training centers (CFA)

No

Compensation paid under employment or future support contracts (CUI-CAE contract)

No

Gratifications paid to trainees within the limit of the contribution exemption (the part beyond the minimum gratuity is subject to tax)

No

FYI  

Exempt remuneration is still subject to the CSG.

A company that is subject to VAT on less than 10% of the turnover achieved in the year before the payment must pay the payroll tax by calculating its liability report.

Calculation = (Revenue not eligible for VAT deduction (year N-1) / total revenue (year N-1)) x 100

For these companies, the tax base on salaries is obtained by multiplying the total amount of taxable remuneration (year N) by the taxable income ratio, i.e.:

Calculation = Total amount of taxable remuneration (year N) x Taxation report

Example :

Taxable remuneration (year N) = €1,000

Total revenue (year N-1) = €3 000 broken down as follows:

  • Revenue from transactions outside the scope of VAT application: €1,600
  • Revenue from transactions in the VAT application field: taxable transaction: €600, exempt transaction not eligible for deduction: €800.

The payroll tax liability ratio is equal to: (1600 + 800) / 3000) x 100 = 80%

For these organizations, thetax base is equal to: 1000 x 80% = 800 euros.

FYI  

If the annual amount of the tax is less than €1,200However, the tax is not due. There is then no declaration of liquidation and regularization to be filed.

The payroll tax has a standard rate (4.25%) applied to the total amount of individual gross remuneration and 2 rates increased respectively by 8.5% and 13.60%.

The 2 increased rates apply to individual gross remuneration above certain thresholds. These thresholds are revalued each year in the same proportion as the limit of the first tranche of the income from the previous year.

In metropolitan France
Tableau - Rate based on gross salary for each employee

Rate Type

Overall rate

Rate on fraction

Gross annual salary paid in 2024 (tax payable in 2025)

Gross monthly salary paid in 2024 (tax payable in 2025)

Gross annual salary paid in 2025 (tax payable in 2026)

Gross monthly salary paid in 2025 (tax payable in 2026)

Normal rate

4.25%

4.25%

Up to €8,985

Up to €748

Up to €9,147

Up to

€762

1er increased rate

8.50%

4.25% (8.50 - 4.25)

Beyond €8,985 until

€17,936

Beyond €748 until €1,494

Beyond €9,147 until €18,258

Beyond €762 until €1,522

2nd rate increased

13.60%

9.35% (13.60 - 4.25)

Greater than

€17,936

Greater than €1,494

Greater than €18,258

Greater than €1,522

The tax base and the net amount of tax due shall be rounded to the nearest euro. Fractions equal to or greater than €0.50 being counted as 1.

Overseas

Guadeloupe, Martinique or Réunion

The rate of 2.95% shall apply to the total amount of individual gross remuneration.

Guyana or Mayotte

The rate of 2.55% shall apply to the total amount of individual gross remuneration.

The haircut is a reduction in the amount of a tax payable.

The abatement is a flat-rate or proportional reduction applied on the basis of a tax calculation (income, value of property, etc.). It only concerns associations.

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Discount for the benefit of the employer

An employer whose annual amount of tax is between €1,200 and €2,040 benefits from a discount equal to 3/4 of the difference between this limit of €2,040 and the actual amount of its tax.

Example :

If the annual amount of the payroll tax is between €1200 and €2,040. The discount is: 0.75 x (€2,040 - actual amount of tax).

This mechanism also applies on a monthly or quarterly basis.

For example:

  • If the monthly amount of the payroll tax is between €100 and €170, discount = 0,75 x (€170 - actual amount of tax)
  • If the quarterly amount of the payroll tax is between €300 and €510, discount = 0,75 x (€510 - actual amount of tax)

The amount of tax due to be entered in line A of printed matter No 2501 or 2501 K corresponds to the amount of the tax due after any application of the discount.

This haircut shall be adjusted at the time of the annual liquidation carried out on the annual declaration of liquidation and regularization n°2502.

Reduction of associations

For the payroll tax paid in 2025, associations benefit from a €24,041.

The tax is therefore payable only for the part of the amount exceeding that amount.

The bodies concerned by the abatement are:

  • Association law of 1901
  • Association located in the Bas-Rhin, Haut-Rhin or Moselle
  • Trade union and its unions
  • Approved intermediate association
  • Some mutual insurance companies
  • Foundation recognized as being of public utility
  • Cancer Control Center
  • Grouping of health and social and medico-social cooperation (it must be made up of legal persons who benefit from a reduction in the amount of the wage tax normally due)

The rates of reporting to the company Tax Office (SIE), of payment (monthly, quarterly or annual) and the amount to be paid are determined by the employer based on the amount of tax paid in the previous year.

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Tax paid in the previous year less than €4,000

The company must make a annual declaration before 15 January of the year following the payment of wages. She'll have to use the Annual tax assessment form No. 2502- SD must be transmitted electronically.

Tax paid in the previous year between €4,000 and €10,000

The company must make its declaration every 3 months within 15 days of the previous quarter.

He will have to provide 3 installment statements No. 2501-SD before 15 April, 15 July and 15 October.

For the last quarter, the tax is due with the additional regularization accompanying the declaration of regularization No. 2502-SD before 31 January of the year following the payment of remuneration.

Tax paid in the previous year above 10,000 €

The company must declare every month within 15 days of the previous month.

It will be required to provide 11 installment statements No. 2501-SD (1 for each month) and a statement of regularization No. 2502-SD before 31 January of the year following the payment of remuneration.

In the event of a transfer or cessation of activity, the employer must make the declaration within 60 days of the event.

In the event of the employer's death, the declaration must be made within 6 months.

Warning  

Payments of the tax must be made by dematerialized channel in the company's professional area or through an EDI provider.

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