Salaries to Drop in September for Many French People
Published: August 12, 2024, 5:00 AM
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In a few days, the average wage in France will take a hit. From September, many workers will notice a decrease in their monthly income.
September is a month of significant expenses – back to school, work commitments, and taxes. But it also brings a unwelcome surprise: a pay cut. While your basic salary remains unchanged, the final amount deposited in your bank account will be lower than usual. This adjustment is due to income tax changes announced earlier this year.
Consider Mickaël, a French employee who has been receiving 2000 euros per month since the beginning of the year. In September, his monthly income will be reduced to 1,979 euros. While this might seem like an error, it’s actually a direct consequence of the deferred tax system. Each month, a percentage of income tax is deducted before the salary is deposited into your account. This percentage is determined based on your income tax return from the previous year.
If your income in 2023 is higher than in 2022, your withholding tax rate will increase. This adjustment will be applied to your September paycheck. As a result, if your income increased compared to the previous year, you will end up paying more taxes this year.
Fortunately, there are ways to avoid this situation. On the impots.gouv.fr website, you can manage your withholding tax by clicking “Manage my withholding tax.” From there, you can update your tax rate or choose not to transmit it to your employer. The latter option implies that the tax will be applied only to your salary, not your total income. This is recommended for individuals with significant income sources outside of their salaries.
Remember, these options are available to help you manage your tax burden and ensure a smoother financial transition.
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