Income tax: Brackets, not a single rate

You often hear: "I don't want a raise, I'll move up a bracket and earn less."

That is wrong. And understanding why changes how you see every euro you earn.

French income tax works in brackets. Like floors, each with its own rate.

With the two thousand twenty-five scale: nothing up to eleven thousand four hundred and ninety-seven euros.

Then eleven per cent up to twenty-nine thousand three hundred and fifteen. Then thirty, then forty-one, then forty-five.

Each rate only applies to the part of income on its own floor. Not to the rest.

Take thirty thousand euros of taxable income, for a single person.

The first floor: zero. The second: one thousand nine hundred and sixty euros. The third, just begun: two hundred and five.

Two thousand one hundred and sixty-five euros in all. Seven point two per cent of your income.

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That is your average rate. And yet, you are in the thirty per cent bracket.

That thirty per cent is your marginal rate. It says only one thing: what the next euro will cost.

One thousand euros more cost you three hundred euros of tax. You keep seven hundred.

So a raise never lowers what you keep. Never.

The marginal rate is mostly useful for one thing: knowing what a deduction is worth to you. Remember the PER.

Second idea: in France, tax is calculated per household. It is called the family quotient.

A married or civil-partnered couple has two shares. Each child adds a half share, then a full share from the third.

Income is divided by the number of shares, tax is calculated on each share, then multiplied.

Sixty thousand euros for a single person: eleven thousand one hundred and sixty-five euros of tax.

The same sixty thousand for a couple: four thousand three hundred and thirty-one. The low floors count twice.

These calculations leave out reductions and the low-income discount. They show the mechanism, not your tax notice.

One last idea: since two thousand nineteen, tax is withheld at source, every month, from your salary.

The rate is based on your past income. If your life changes, you can have it corrected online.

The thresholds move every year. The floors stay. And you never lose money by earning more.