Workers in France given salary shock as new income tax rules kick in
The Local France - [email protected]
Published: 29 Jan, 2019 CET.
Updated: Tue 29 Jan 2019 13:45 CET
Many workers in France would have been disappointing opening their January payslips and a lower pay as a result of France's new income tax reform. Here's what to do if your paycheck isn't what you expected it to be.
As France's landmark income tax reform comes into effect this month and people have started receiving their January payslips, many taxpayers have been in for a bit of a shock.
French media have even carried reports of a 'tough psychological shock' felt some taxpayers when they opened their first altered paycheck and saw their new reduced pay for the first time.
"The difference is crystal clear, on the bottom right of my payslip," a stunned French taxpayer called Sandra told Europe 1.
She earns €4,500 a month and has seen €1,000 shaved off her paycheck this month as a result of the new reform that sees income tax paid at source for the first time, rather than a year later.
"I'm really going to be very careful now not to be in the red," she said.
However, no major problems have been reported since the new tax rules were implemented although taxpayers have been advised to look at their new payslips carefully.
Here are the main issues that could arise from the new tax reform and what to do in case there are any problems.
What are the new tax rules about again?
Since the start of January, French income tax is automatically taken out of salaries, pensions and substitute income (for example maternity leave or job seekers' allowance) instead of being paid a year late as it was before.
This new system (called 'prélèvement à la source' in French), aims to be more adaptable: taxpayers now automatically pay tax each month directly from their salaries as they earn it, and not a year later as they did before.
And so although there are no tax increases and taxpayers end up paying the same amount in the end, some taxpayers were still unpleasantly surprised when seeing their first payslips with income tax taken out of their monthly salary directly for the first time.
READ ALSO:
Who do I call if there is a problem?
The taxman (and not your employer) is the person to go to for any issues arising out if the new income-tax rules and calculations on your payslip.
The government has set up a national helpline (in French) to answer any questions about the reform. The number is 0 809 401 401. So far, it has received over 1 million calls since the beginning of the month.
There's also lots of information on this government website. Otherwise, if you have any questions you can also contact your local tax office directly.
#impôts "Ma situation change, comment actualiser mon taux de #prélèvementàlasource ?", "Je travaille en contrats courts, comment cela se passe pour moi ?", "Et pour mes réductions et crédits d’impôt ?"... Retrouvez 20 fiches pratiques à télécharger ici > https://t.co/cllYRzYnBi pic.twitter.com/ba5MFJVTLk
— FinancesPubliquesFr (@dgfip_officiel) December 19, 2018
What are some of the issues that could arise from the new paychecks?
Over the last year, taxpayers have been flooded with information about the tax reform and how it would impact them, and so it won't have come as a surprise to most of France's 38 million taxpayers.
However, if you've received your January paycheck and it isn't what you thought it should be, you may want to check several things:
Employers worked out what tax to deduct from monthly salaries based on their employee's tax code - which was communicated to them by the tax office.
Last year, taxpayers had the choice to either work out their tax code for themselves and let the tax office know, or to let the tax office work it out automatically which is what 95 percent of French taxpayers did.
Les employeurs ne peuvent appliquer le #PrélèvementALaSource que sur la base des taux qui leurs sont transmis. si un salarié veut signaler un changement, le seul interlocuteur est l'administration fiscale. Plus d'infos : https://t.co/82MKxhghF9 pic.twitter.com/n943eb2iAC
— Prélèvement à la source (@ImpotsService) January 28, 2019
If you think your employer has used the wrong tax code, check your online tax account to make sure the right one has been used.
If you worked out your tax code yourself and you didn't come up with the same result as the tax office, you may have calculated it based on your net income ('revenu net versé') and not on your net taxable income ('revenu net imposable') which is what you should have done.
READ ALSO:
What if my income changes?
If your income changes, you'll need to let the taxman know.
You can do this easily on your online account or by going to your tax office. You'll then have to allow for up to a couple of months for the tax office to tell your employer.
Has everyone received their new paychecks by now?
Independent workers, pensioners, job seekers and households whose income comes from other sources such as rent were the first to receive their new payslips ealier in this month.
This week, it was the turn of French employees to get their revised January paycheck.
How could the reforms affect France?
As the reform kicked in this month, the government has been bracing itself for the negative impact lower salaries may have on taxpayers, fearing that it could push people to spend less money and lead to slower growth.
Unions have also expressed concern about the added workload implementing the reform may have on civil servants.
On Monday, they called for a 15-day strike which could see a number of tax centres barred from access.
"You can be for or against the reform, but you when have to set up such a massive project, you need to have the means to do it. We just don't have the manpower, " Anne Guyot-Welk, spokesperson for France's main tax officers' union Solidaires finances publiques, told FranceInfo.
According to her, the French administration has shed 25,000 jobs over the last 10 years and is planning to cut another 2,130 this year.
And with the ongoing yellow vest movement demanding help for those who struggle to get to the end of the month, a perceived drop in people's salaries, could spark yet more anger and resentment towards the government.
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As France's landmark income tax reform comes into effect this month and people have started receiving their January payslips, many taxpayers have been in for a bit of a shock.
French media have even carried reports of a 'tough psychological shock' felt some taxpayers when they opened their first altered paycheck and saw their new reduced pay for the first time.
"The difference is crystal clear, on the bottom right of my payslip," a stunned French taxpayer called Sandra told Europe 1.
She earns €4,500 a month and has seen €1,000 shaved off her paycheck this month as a result of the new reform that sees income tax paid at source for the first time, rather than a year later.
"I'm really going to be very careful now not to be in the red," she said.
However, no major problems have been reported since the new tax rules were implemented although taxpayers have been advised to look at their new payslips carefully.
Here are the main issues that could arise from the new tax reform and what to do in case there are any problems.
What are the new tax rules about again?
Since the start of January, French income tax is automatically taken out of salaries, pensions and substitute income (for example maternity leave or job seekers' allowance) instead of being paid a year late as it was before.
This new system (called 'prélèvement à la source' in French), aims to be more adaptable: taxpayers now automatically pay tax each month directly from their salaries as they earn it, and not a year later as they did before.
And so although there are no tax increases and taxpayers end up paying the same amount in the end, some taxpayers were still unpleasantly surprised when seeing their first payslips with income tax taken out of their monthly salary directly for the first time.
READ ALSO:
Who do I call if there is a problem?
The taxman (and not your employer) is the person to go to for any issues arising out if the new income-tax rules and calculations on your payslip.
The government has set up a national helpline (in French) to answer any questions about the reform. The number is 0 809 401 401. So far, it has received over 1 million calls since the beginning of the month.
There's also lots of information on this government website. Otherwise, if you have any questions you can also contact your local tax office directly.
#impôts "Ma situation change, comment actualiser mon taux de #prélèvementàlasource ?", "Je travaille en contrats courts, comment cela se passe pour moi ?", "Et pour mes réductions et crédits d’impôt ?"... Retrouvez 20 fiches pratiques à télécharger ici > https://t.co/cllYRzYnBi pic.twitter.com/ba5MFJVTLk
— FinancesPubliquesFr (@dgfip_officiel) December 19, 2018
What are some of the issues that could arise from the new paychecks?
Over the last year, taxpayers have been flooded with information about the tax reform and how it would impact them, and so it won't have come as a surprise to most of France's 38 million taxpayers.
However, if you've received your January paycheck and it isn't what you thought it should be, you may want to check several things:
Employers worked out what tax to deduct from monthly salaries based on their employee's tax code - which was communicated to them by the tax office.
Last year, taxpayers had the choice to either work out their tax code for themselves and let the tax office know, or to let the tax office work it out automatically which is what 95 percent of French taxpayers did.
Les employeurs ne peuvent appliquer le #PrélèvementALaSource que sur la base des taux qui leurs sont transmis. si un salarié veut signaler un changement, le seul interlocuteur est l'administration fiscale. Plus d'infos : https://t.co/82MKxhghF9 pic.twitter.com/n943eb2iAC
— Prélèvement à la source (@ImpotsService) January 28, 2019
If you think your employer has used the wrong tax code, check your online tax account to make sure the right one has been used.
If you worked out your tax code yourself and you didn't come up with the same result as the tax office, you may have calculated it based on your net income ('revenu net versé') and not on your net taxable income ('revenu net imposable') which is what you should have done.
READ ALSO:
What if my income changes?
If your income changes, you'll need to let the taxman know.
You can do this easily on your online account or by going to your tax office. You'll then have to allow for up to a couple of months for the tax office to tell your employer.
Has everyone received their new paychecks by now?
Independent workers, pensioners, job seekers and households whose income comes from other sources such as rent were the first to receive their new payslips ealier in this month.
This week, it was the turn of French employees to get their revised January paycheck.
How could the reforms affect France?
As the reform kicked in this month, the government has been bracing itself for the negative impact lower salaries may have on taxpayers, fearing that it could push people to spend less money and lead to slower growth.
Unions have also expressed concern about the added workload implementing the reform may have on civil servants.
On Monday, they called for a 15-day strike which could see a number of tax centres barred from access.
"You can be for or against the reform, but you when have to set up such a massive project, you need to have the means to do it. We just don't have the manpower, " Anne Guyot-Welk, spokesperson for France's main tax officers' union Solidaires finances publiques, told FranceInfo.
According to her, the French administration has shed 25,000 jobs over the last 10 years and is planning to cut another 2,130 this year.
And with the ongoing yellow vest movement demanding help for those who struggle to get to the end of the month, a perceived drop in people's salaries, could spark yet more anger and resentment towards the government.
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