How is net salary calculated?

The salaire mensuel net (monthly net salary) is calculated from the salaire brut (gross salary) by deducting social security contributions and other mandatory deductions. Generally, the net salary represents approximately:

• 78% of the salaire brut for a salarié non-cadre (non-executive employee), meaning a deduction of about 22%, 
• 75% of the salaire brut for a salarié cadre (executive employee), meaning a deduction of about 25%.

Why the difference between 22% and 25%?

The difference is primarily due to additional contributions required for cadres, including higher contributions to complementary pension schemes and other benefits tied to their employment status.

Breakdown of deductions

• CSG (Contribution Sociale Généralisée) and CRDS (Contribution pour le Remboursement de la Dette Sociale): approximately 9.7%.
• Cotisations retraite complémentaire (complementary pension contributions):
  • Around 10% for non-executives (Arrco),
  • Up to 13% for executives (Agirc-Arrco) due to additional contributions like the CET (Contribution Exceptionnelle Temporaire), which applies beyond the Plafond Annuel de la Sécurité Sociale (PASS).
• Assurance vieillesse (general retirement insurance): approximately 2.3%.

Regional specifics

In the departments of Bas-Rhin, Haut-Rhin, and Moselle, an additional health insurance contribution of 1.3% is applied.

Income tax is calculated in several steps:

Net taxable income

Start with the revenu brut global (gross income), which includes salaries, rental income, etc., and subtract eligible deductions and allowances (e.g., professional expenses, alimony payments).

Progressive tax scale

The tax amount is determined based on an annual progressive tax scale. You can consult the current rates and brackets directly on the official tax website.

Tax reductions and credits

The final tax amount may be reduced through various mechanisms such as donations, household employment, or childcare expenses.

Practical example

For a net taxable income of 30,000 €, here is the calculation for 2024:

• First bracket (10,777 €): Non-taxable = 0 €
• Second bracket (10,778 € to 27,478 €, i.e., 16,701 €): 16,701 € × 11% = 1,837.11 €
• Third bracket (27,479 € to 30,000 €, i.e., 2,521 €): 2,521 € × 30% = 756.30 €

Total income tax before any reductions = 1,837.11 € + 756.30 € = 2,593.41 €

Withholding tax allows you to pay income tax directly when your income is received (salary, pension, etc.). This eliminates the delay between earning income and paying taxes and helps you manage your personal finances more effectively.

Withholding tax rate

The withholding tax rate is calculated by the French tax administration based on your income declaration. It is applied by your employer or the paying organization. You can choose between:

• The personalized rate: calculated based on your household income.
• The individualized rate: allows a couple to divide the tax burden differently.

After your first annual income declaration (in paper format), you gain access to the website. This portal allows you to review and adjust your withholding tax rate if the one automatically assigned by the government does not match your situation.

Practical example

An employee with a net taxable income of 20,000 € and a withholding tax rate of 5% will see a deduction from their salary each month:

• If their monthly taxable income is 1,666.67 €, they will pay 1,666.67 € × 5% = 83.33 €.
• Their monthly net salary after tax will be 1,583.34 €.

At the end of the year, the French tax administration adjusts the total annual tax based on actual income and the amounts already withheld. If you have overpaid, you will receive a refund. Conversely, if you have underpaid, you will need to pay the remaining amount.