How much French income tax will I pay?

SC expat · #1 (**permalink**) 8th November 2007, 05:01 PM

Hello,

I am an American student that is moving to France permanently and will begin work in May 2008. I will live in Paris and expect to earn about 50K euros per year (give or take 10K either way). I am trying to determine how much french income tax I will pay in order to get a "net" income. I know the French tax code is vast and unruly, but does anyone have any estimates as to tax brackets (ie, 20k to 30K pays about 15%, 30 to 40 pays about 25%, etc). I haved lived in Paris and Europe for a number of years, but this is the first time that I will have to pay foreign taxes. Any information is much appreciated, and again, I am looking for a broad estimate, nothing too specific. Also, I am unmarried and have no children, and no other form of income, investments, etc.

Bevdeforges · #2 (**permalink**) 16th November 2007, 08:20 AM

One problem with estimating taxes ahead of time is that they have an annoying tendency here to make changes to the current year's tax rules in November which are, of course, retroactive for the entire tax year. But you get used to that after a bit. <g>

They have a "no obligation" tax estimator form online at:
- oops, I see I have yet to post enough to be trusted to post an URL*
which is probably a whole bunch easier than trying to calculate it by hand, as there are lots of weird little factors to take into account.

Don't forget, too, that they don't withhold any income taxes from your paycheck. You'll be expected to pay off whatever you owe over a period of several months (monthly or quarterly) after your first filing in May 2009.

The good news is that there is LOTS of stuff online for estimating your taxes, filing your return (not the first time, though) and making your payments.
Cheers,
Bev

* To find the tax calculator, go to the Service-Public website (just add an .fr to Service-public), then click on Impôts, then over on the far right there is a link to the site to calculate your tax based on last year's rules.

giantpanda · #3 (**permalink**) 26th November 2007, 05:50 PM

Quote:

Originally Posted by SC expat

Hello,

I am an American student that is moving to France permanently and will begin work in May 2008. I will live in Paris and expect to earn about 50K euros per year (give or take 10K either way). I am trying to determine how much french income tax I will pay in order to get a "net" income. I know the French tax code is vast and unruly, but does anyone have any estimates as to tax brackets (ie, 20k to 30K pays about 15%, 30 to 40 pays about 25%, etc). I haved lived in Paris and Europe for a number of years, but this is the first time that I will have to pay foreign taxes. Any information is much appreciated, and again, I am looking for a broad estimate, nothing too specific. Also, I am unmarried and have no children, and no other form of income, investments, etc.

Hi!

I hope you have all necessary papers, because things have got stoffer for all non-EC people lately.

If you earn Euro 50,000( sum declarable which is different to your earnings - ask employer ) a year ( and have no other income - you have to declare your world income ) and you are single, you would pay for a full year: Euro 8260 income tax.

For the first year if I count 7 months, you would then pay Euro 2,635 Income tax.

NB. Income tax allowances are income dependant - eg. 10% on salaries.

Yours,

giantpanda

badlandz · #4 (**permalink**) 4th February 2008, 04:28 PM

Quote:

Originally Posted by giantpanda

If you earn Euro 50,000( sum declarable which is different to your earnings - ask employer ) a year ( and have no other income - you have to declare your world income ) and you are single, you would pay for a full year: Euro 8260 income tax.

Thanks giantpanda! That's useful to know, since I am considering something that is financially in almost the same position (just not Paris, a bit further south).

I have a question to follow that up.

you say that's 8260€ a year in French tax on a 50000€ a year salary, which amounts to only about 16.5% of the total income! Far lower than the 50%+ tax rates my pro-American In-Laws have warned that the French will charge if we move away...

However, I don't know if I understand it all correctly. Correct me where I'm wrong here; there is approximately 21% of your paycheck immediately withheld/taken for "social charges" at the time your paid, once per month. That is not considered "taxes." Then, at years end, you are to pay some fixed "tax" on your annual income, which in this case is estimated to be 8260€ due on a 50000€ a year salary.

For quick approximation, that's roughly 4000€ a month GROSS salary, of which you might get a check for the amount of about 3160€. Of the remaining 3160€, you would be best advised to set aside 689€ for your taxes (which come due with your filing at the beginning of the next calender year). Leaving you 2471€ a month of "spendable" NET income per month from your 4000€ a month GROSS salary.

Am I even close to correct?

Bevdeforges · #5 (**permalink**) 4th February 2008, 05:25 PM

Try this website (assuming, of course, you can read French): Calcul de l'impôt 2008 sur les revenus 2007

The modèle simplifié takes you to something that approximates a French tax form (certainly the online version) where you can enter your information and get a rough and dirty estimate.

What giantpanda was trying to explain to you is that you have to figure from your "taxable income" - not from your gross. The 50% figure the in-laws are talking about is the marginal rate (just like US taxes - the top bracket, not the rate you pay overall on your salary).

OK - for your example - yes, they take about 20% of your salary off the top for "social charges" (health, retirement, unemployment and disability insurance, basically). Those charges are, for the most part, deductible from your salary when figuring your "taxable income." So for a salary of 50,000€, your "taxable income" is normally only about 40,000€.

There are also other deductions and allowances you take from the "taxable income" amount to determine the figure you use to calculate how much tax you owe - think of it like the figure you actually use on the US tax forms to take to the tax tables - AGI less your standard or itemized deductions. You get allowances for the number of people in your household - since you mentioned "in-laws", that includes the allowance for your spouse and any kids. (Actually YOU do none of the calculations - the tax inspector does it all for you. You just "declare" your income and deductions.)

See if you can find a book called Living and Working in France by David Hampshire. There is a pretty detailed calculation for French income tax in there that you might find helpful.

Beware the first year's taxes. You declare your income in May of the year following (i.e. May, 2008 for 2007 income) and receive your tax bill from the inspector in September, at which time you pay everything you owe for that first year in a couple of payments which you can stretch out to the end of the year (I think it is) or possibly a bit further. However, you then start making monthly or quarterly payments toward the year in progress (2008), based on your actual tax bill for that first year (2007). That first year, you wind up paying the actual tax, plus the estimated for the current year - in effect a double hit.

OK, that's probably more than you wanted to know...

Cheers,
Bev

giantpanda · #6 (**permalink**) 25th February 2008, 08:14 AM

Quote:

Originally Posted by badlandz

Correct me where I'm wrong here; there is approximately 21% of your paycheck immediately withheld/taken for "social charges" at the time your paid, once per month.