Income taxes: all tax brackets -2023
Taxes on income are the obsession of taxpayers, anxious each year to declare changes, whether through a salary increase, the acquisition of real estate, the emancipation of a child or a period of inactivity. In order to see more clearly about your finances and your future withholding tax rate, here is the detail of the 2022-2023 tax brackets.
Declaration 2022: Which rate for which tax brackets?
The tax brackets and rates are set by a progressive tax scale. In 2022, the tranches were revalued by 1.4% to follow the evolution of consumer prices. Thus, for a single share, the brackets in which the net taxable amount is located as well as the rate applied are as follows:
- Jusqu’à 10 225 € : un taux à 0 %,
- De 10 226 à 26 070 € : un taux à 11 %,
- De 26 071 à 74 545 € : un taux à 30 %,
- De 74 546 à 160 336 € : un taux à 41 %,
- Au-delà de 160 336 € : un taux à 45 %.
How is income tax calculated?
Income tax is calculated on net taxable income. This is composed as follows:
- Taxable net salary or salary, including the net salary to be paid (gross salary – employee contributions), daily social security allowances, benefits in kind, overtime, non-deductible CSG, full CRDS;
- Pensions and life annuities of the annuitant;
- Industrial and commercial profits (BIC);
- Non-commercial profits (BNC);
- Income from movable capital (investments, treasury bonds, dividends, etc.);
- Farm income;
- Property income (rent received, real estate investment funds, etc.);
- Capital gains realized in the context of a real estate sale, for example.
Several factors can be deduced from these elements that modulate the amount of income:
- Reductions, deductions or tax credits, for energy renovation work, retirement savings, home services, donations to associations, investment in SMEs, etc. ;
- A discount in the event of low resources for students, low-income households, etc. ;
- A cap on the effects of the family quotient, set at €1,592 for each additional half-share, and €796 for each additional quarter-share;
- Real estate tax exemption procedures, such as the Pinel law or the Denormandie law, etc.
The addition of the whole is deducted from a flat-rate allowance of 10%, capped at €12,829 in 2022, thus imposing only 90% of net income. The taxpayer may, however, prefer the deduction of his actual expenses incurred in the context of his professional activity (meal expenses, dual residence expenses, mileage expenses, etc.) rather than the flat-rate allowance if this calculation is more favorable to him.
In conclusion, therefore, the net taxable amount is defined by: income – reductions – flat-rate allowance or actual costs.
Once the taxable net has been defined, the calculation of the tax is rather simple:
- Divide the taxable net by the number of shares of family quotient, knowing that the taxpayer counts for 1 share, his children in total custody for 0.5 share, or 0.25 share in alternating custody;
- To the quotient found must apply the progressive tax scale, the operation of which we will then explain to you;
- Finally, the product must be multiplied by the number of shares of the family quotient calculated previously.
The progressive scale
The aforementioned scale is said to be progressive because the taxation by bracket is not so clear cut. Also, all net taxable income will not be taxed at the rate corresponding to the bracket.
To better understand, nothing is better than a good example:
Mr. X lives alone with his two daughters, of whom he shares custody with the separated mother, i.e. 1.5 shares. Mr. X’s net taxable income is €35,000. Mr. X must therefore calculate the following: 35,000 / 1.5 = 23,333. Here is how the progressive scale will apply:
- The 1st tranche of €0 to €10,225 is taxed at a rate of 0%. Also, €10,225 of the net taxable €23,333 will be taxed at 0%, i.e. €0;
- The 2nd tranche of €10,226 to €26,070 is taxed at a rate of 11%. Also, the remaining €13,108 will be taxed at 11%, or €1,442.
As explained in the calculation of the aforementioned tax, the €1,442 will have to be multiplied by the number of shares, i.e. 1.5, which gives us €2,163. Mr. X will therefore have to pay income tax of €2,163.
If the scale had not been progressive, all of the €23,333 would have been taxed at 11%, i.e. a tax of €3,850.
Here is a second, slightly different example:
Mr and Mrs Y are a childless couple. They therefore have 2 shares for a joint net taxable income of €78,000. Let’s go back to our operation: 78,000 / 2 = €39,000. Here is the calculation of the tax thanks to the progressive scale:
- €10,225 will be taxed at the rate of 0%, i.e. €0;
- €15,844 (26,070 – 10,226) will be taxed at the rate of 11%, i.e. €1,743;
- €12,931 (39,000 – 10225 – 15844) will be taxed at the rate of 30%, i.e. €3,879.
1,743 + 3,879 = €5,622. €5,622 * 2 = €11,245.
Mr and Mrs Y will have to pay income tax of €11,245 for the year.
For information, we will call the highest tax rate the TMI: Marginal Tax Rate. Here, the TMI is 30%, which gives an indication of the net taxable income of the household, although the whole is not taxed at 30%.
What is the deadline for declaring your income?
Each year, a fiscal calendar is drawn up. The majority of taxpayers now declare their income online, but for those who maintain the paper version, the deadline for filing is still shorter than via the Internet. The opening of the online tax declaration service is usually held at the beginning of April, for a declaration deadline set between the end of May and the beginning of June, spread over 3 deadlines according to the departments.
Here is the tax calendar set for the 2022 declarations:
- 7 April: Opening of the online declaration service;
- May 19: Deadline for filing paper declarations, postmark being authentic;
- May 24: Deadline for online declaration of departments 0 to 19;
- May 31: Deadline for online declaration of departments 20 to 54;
- June 8: Deadline for online declaration of departments 55 to 976;
- July 26: Availability of 2021 income tax notices;
- August 15: Reimbursement of overpayment to taxpayers;
- September 26: Withdrawal of the remainder to be paid by the taxpayer
Remember that taxes are deducted each month at source, therefore deducted from income before it is paid, since January 1, 2019. The withholding tax has been put in place to remove the one-year lag, and automatically adapt to the amount of income received.
What about 2023 tax brackets on 2022 income?
Well, it’s still a bit early to tell. At the end of each year, the finance law defines the tax rules applicable to income received over the year, to be declared the following year, which, it should be remembered, is assessed according to the evolution of consumer prices, hence inflation. Also, the finance law of the end of 2022 will define the tax scale for 2023 declarations. Let us simply note that each year, it is not the tax rates that fluctuate, but the marginal brackets. A little more patience then…