The DGFiP automatically changes the rate of withholding tax on September 1 of each year (Photo credit: © Pcess609 – stock.adobe.com)
It is on September 1 that the tax administration changes the rate of withholding tax for all taxpayers. What change should you expect on your pay slip?
Each year, the withholding tax rate for taxpayers changes. Based on the 2021 revenues declared in the spring of 2022, the General Directorate of Public Finance (DGFiP) changes this percentage. A change which takes effect on September 1, and which can have an influence on the payslip of employees from August. The households concerned can, however, modulate the rate of withholding tax themselves if they deem it useful. What you need to know about this intervention of the Public Treasury.
The withholding tax rate may increase or decrease
To follow the evolution of the situation of a tax household as closely as possible, the DGFiP automatically changes the rate of the withholding tax on September 1 of each year. This operation makes it possible to take into account the
latest tax return
carried out during the previous spring. At the beginning of September 2022, it is therefore the resources for 2021 that are taken into account to refine the applicable withholding tax rate.
The tax administration may thus be required to increase the percentage deducted from taxpayers’ wages, or on the contrary to lower it. This change concerns all taxable tax households, including also couples who have chosen to use an individualized rate, that is to say a different rate for each member of the household. The only exceptions are those who have already changed their withholding tax rate themselves during 2022, or who have opted for the neutral rate. Indeed, this non-personalized rate, which allows not to inform his employer of his tax situation, is an option which continues by tacit agreement.
How to know your new withholding tax rate?
For all taxpayers whose income has changed significantly between 2021 and 2022, it may be interesting to choose their withholding tax rate themselves. Indeed, the tax administration only takes into account the data at its disposal, and it therefore bases its calculation on the income of 2021, and not that of 2022. Job loss, resignation, transfer, promotion, significant increase… all these events can have a real influence on the amount of income tax payable, and it may therefore be appropriate to report this change to the tax authorities.
To find out your withholding tax rate, simply go to your personal space on the impots.gouv.fr website. The section “Manage my deduction at source”, then “Consult your rates” allows you to find out about the new rate applicable from 1 September, which may apply as soon as the salary or retirement pension for the month of August is paid. depending on the publication date of the newsletter.
How to change your direct debit rate yourself
If the new rate provided by the tax authorities does not reflect the current situation of the household, it is possible to change it by clicking on “Update following an increase or decrease in income”. It is then necessary to estimate the amount of its resources for the year 2022. An exercise which can be tricky if the income received is not regular, but which nevertheless makes it possible to stick as closely as possible to reality.
Note that any increase in income during the year 2021 results in a new calculation of the withholding tax rate by the tax authorities. On the other hand, only decreases in resources greater than 10% lead to a new evaluation of the rate.