In January, when the new income tax reform referred to by the French as the 'prélèvement à la source' kicks in, some 38 million households should expect a couple of extra lines added to their paychecks.
French paycheck publisher ADP has released examples of what the new payslips will look like (see below).
#PrélèvementALaSource Dès le mois d’octobre 2018, des bulletins de salaire pédagogiques seront envoyés pour :
1) savoir à quoi ressemblera votre #FicheDePaie
2) vous faire une idée du montant final chaque moishttps://t.co/ivG8fGRqS8 via @LeParisien_Eco @le_Parisien pic.twitter.com/4AdPs5JJtf
— ADP France (@ADP_FR) 11 septembre 2018
At the bottom of the new payslips (like the one shown above), workers will see one line indicating their monthly salary before income tax. Below it will feature the monthly income tax installment to be deducted, and below it, the final monthly salary owed after income tax has been taken off.
In France, employees currently pay income tax the following year but from January, workers can expect to take a hit to their monthly wage, meaning they will no longer have to worry about paying their income a year later.
To prevent workers from getting a nasty shock when they see their reduced wages for the first time, the government has issued specific instructions demanding that the line showing the wage before tax on the payslip be printed in larger characters than the numbers on the rest of the payslip.
This is “to avoid workers getting a psychological shock as the new reforms begin”, Franceinfo reported.
The reform was first due to be implemented in January 2018 but was delayed a year because President Emmanuel Macron wanted time to make sure the reform was actually worth it and to smooth out any problems.
In recent days the reform looked as though it would be delayed or even scrapped as Macron grew wary of potential technical bugs as well as a negative reaction from taxpayers to a cut in their monthly payslips, which may hit consumer confidence.
Employers, especially bosses of small and medium companies had pleaded for the change to be dropped saying they don't have the resources to implement the major change.
But their wishes were ignored and France will finally fall inline with most of western Europe.
Emails have already been sent out to tax payers explaining to them why it's important they pay tax on monthly basis rather than a year later.
“This reform of tax modernization and simplification will not change the total amount of tax you pay,” Budget Minister Darmanin told tax payers in the email.
“This gap [of a year] is not adapted to all the changes of situation you can experience: periods of activity and inactivity, bonuses, marriage, civil unions, divorce, birth of children, loss of a spouse, retirement … Every year nearly seven million of you experience very significant declines or increases in income, read the letter signed by Budget Minister Darmanin.
So from January workers can expect to take a hit to their monthly wage although they will no longer have to worry about paying their income a year later.
Tax payers in France have already been sent their personal tax code, which they can change before September 15th.