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Changing tax bands in France: How much could you save in 2023?

The average household will save on average €350, but individual gains will depend on your income tax band

A magnifying glass showing a closeup of the French tax website

The thresholds for each band of tax are going up in 2023, meaning some households could save hundreds or even thousands Pic: HJBC / Shutterstock

The income tax thresholds in France are set to increase by 5.4% in 2023 as part of the new finance law voted for in October, which will save each household an average of €350, the government has said.

The thresholds are part of the ‘barème de l’impôt sur le revenu (IR)’ (income tax scale) and called ‘les seuils des tranches marginales d’imposition (TMI)’ (thresholds for marginal tax imposition increases) in French. 

They are set to rise in line with inflation for the year 2022.

In a statement, the government said: “[We want] to maintain a tax level aligned with stable and constant revenue in euros. Without this re-evaluation, the taxes of people in France would have risen by 6.2billion.”

The average saving per household will be €352, according to calculations by La Direction générale des finances publiques (DGFiP), after it looked at the 2020 returns of 39.3 million households. However, this figure could change considerably depending on the household.

The thresholds for 2023 will be as follows: 

  • 0% - Taxable revenue per person: Under €10,777 (up from €10,225 in 2022)

  • 11% - €10,777-€27,478 (€10,226-€26,070 in 2022)

  • 30% - €27,479-€78,570 (€26,071-€74,545 in 2022)

  • 41% - €78,571-€168,994 (€74,546-€160,336 in 2022)

  • 45% - Above €168,994 (Above €160,337 in 2022)

Households that pay a higher rate of tax will benefit the most, for the income for which they pay the higher rate. For example, a household that pays the 11% rate will save on average €61, while one that also pays at 30% will save €328. 

A single person who pays tax up to a 41% rate will save an average of €771. A dual-income household without kids, paying up to the 45% rate, will save up to €2,234.

You would calculate your savings compared to last year by taking the difference between last year’s thresholds and this year’s thresholds, and calculating the new level of tax for that sum. 

For example, in 2022, any income over €26,070 would have been calculated at a 30% rate. Now, only income over €27,476 will hit the 30% rate. This means that €1,406 extra (27,476 minus 26,070) would now be calculated at the lower rate of 11%, leading to a lower tax amount overall. 

This example can be repeated for all the new tax thresholds.

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