The withholding tax, which came into force on January 1, 2019, is now a well-oiled mechanism. But, so that the sum deducted each month from the salary corresponds as closely as possible to the reality of your taxation, it is advisable to keep the tax authorities informed of certain personal or professional changes. And in particular salary increases, or promotions, which every French person can benefit from and which, very often, come into force at the beginning of the year.
Concretely, any salary increase will be subject to your marginal tax rate, that is to say the rate that applies to the highest taxable income bracket. This will necessarily increase your average tax rate. It is therefore necessary to adapt the rate of deduction at source as quickly as possible so as not to have to undergo a heavy adjustment the following year, in the heart of summer.
Estimate your income for the current year
To do this, you must go to the impots.gouv.fr website and then to the “Manage my withholding tax” online service. And finally click on “Update following an increase or decrease in income”. “Updating income requires entering income for the current year, specifies the General Directorate of Public Finance (DGFiP). It is therefore a question of prospective income, that is to say an assessment of the income which will be received during the year according to the information which is known to you alone. »
At the end of the process, a new rate and, if necessary, new installments (for property income, income from the self-employed, etc.) are calculated. This updated rate is then automatically transmitted to the bodies paying income, which are required to apply it within two months. Note that you will have to update your rate again at the end of the year so that the tax authorities do not apply on January 1, 2024 the withholding tax rate calculated in the spring of 2023 from your 2022 income.
In June 2022, Bercy had also launched a major information campaign to make taxpayers aware of the interest of declaring life events to the tax authorities as soon as possible. And the game is worth the candle. Because if a promotion or a salary increase leads to an increase in your taxation, other events such as a birth, a marriage or a retirement will result in a reduction in the rate of withholding tax.
So as much as this reduction applies as quickly as possible and not to wait several months for the regularization by the DGFiP.