Actual expenses vs 10% allowance: how to make the right choice in 2026?

Every year, millions of taxpayers complete their income tax return without asking a question that can significantly affect their bill: the flat-rate 10% allowance applies automatically to your salaries, but it is not always the most advantageous option. Choosing to deduct actual professional expenses can materially reduce your taxable income — and therefore your income tax. The key is knowing when, how, and for whom this option makes sense. This guide gives you all the tools to make the right choice in 2026.

The flat-rate 10% allowance is the standard mechanism provided by the French Tax Code. It applies automatically to all employees on income declared in box 1AK (declarant 1) or 1BK (declarant 2) of the 2042 tax return.

How it works#

The tax authority automatically deducts 10% of your gross salary before calculating your tax. This flat rate is designed to cover everyday professional expenses: commuting, meals, workwear, training, and so on.

The 2026 caps#

For the taxation of 2025 income (return filed in spring 2026):

• Maximum cap: €14,426 per declarant (indexed annually to consumer prices)
• Minimum floor: €504
• The allowance applies per declarant, not per household — a couple can benefit from a combined allowance of up to €28,852

Key point: if your gross annual salary exceeds €144,260, you reach the cap. Beyond that threshold, each additional euro of salary receives no further allowance — unless you opt for actual expenses.

A simplicity that comes at a cost#

The 10% allowance is convenient: no documentation, no calculation, no annexes. But for employees whose actual professional expenses exceed the flat rate, it results in under-deduction — and a higher income tax bill as a consequence.

The option for actual expenses is available to all employees. It is governed by Article 83 of the French General Tax Code (CGI) and detailed by the BOFiP (official tax doctrine). It allows deduction of professional expenses actually incurred, provided they are required by the profession, not reimbursed by the employer, and supported by documentary evidence.

Main déductible catégories#

Commuting costs (domicile to workplace)

This is the most common category. Two methods are available:

• Public transport: deduction of the actual cost of subscriptions (Navigo, train pass, etc.) not 100% covered by the employer
• Personal vehicle: application of the official mileage scale (updated by ministerial order each year) multiplied by the kilometres travelled between home and workplace, up to a limit of 80 km per single journey

Dual résidence costs (frais de double résidence)

When an employee is forced to maintain two résidences for professional reasons (relocation, workplace far from the family home), dual résidence costs are déductible: rent on the secondary résidence, return trips to the family home (maximum one trip per week), and additional meal costs.

Meals at work

The difference between the actual cost of a meal and the value of a meal taken at home (set by the tax authority at a fixed amount, €5.35 in 2025) is déductible, provided the lunch break does not allow the employee to return home.

Training and professional documentation

Training costs not covered by the employer, subscriptions to specialist publications, and technical reference works.

Professional equipment

Computer, printer, office furniture (for regular remote working), software — proportional to professional use.

Specific workwear

Only garments that cannot be worn outside a professional context: uniform, lab coat, protective equipment.

Important: représentation costs, entertainment expenses, and business gifts are in principle déductible only where their strictly professional nature can be demonstrated. The tax authority systematically scrutinises this point during audits.

The principle is straightforward: if your total actual professional expenses exceed the flat-rate 10% allowance amount, the option is favourable.

The comparison formula#

Advantage condition: Actual expenses total > (Gross salary × 10%) capped at €14,426

Worked example — Paris-based executive#

Consider an executive employee with a gross annual salary of €60,000.

• Flat-rate allowance: €60,000 × 10% = €6,000

Actual professional expenses:

• Navigo subscription (50% employer contribution): €900
• Mileage (vehicle, 8,000 km at 5CV official scale): €4,384
• Meals (220 working days × €6 excess over home meal value): €1,320
• Professional training not covered by employer: €1,200
• Total actual expenses: €7,804

Gross additional deduction: €7,804 − €6,000 = €1,804 of additional déductible expenses.

Effective tax saving depending on the marginal rate (TMI):

• €360 at 30% marginal rate
• €540 at 41% marginal rate

Example for a SASU director receiving manager compensation#

A SASU president paying themselves a salary is treated as an assimilated employee and can opt for actual expenses in the same way as a standard employee. If their annual compensation is €80,000 and they incur significant expenses (no company car provided, frequent travel, home office set-up), the calculation can be highly favourable.

Caution: for a SASU president, costs borne directly by the company must not be deducted a second time in the personal tax return. The actual expenses deduction only covers costs personally incurred and not reimbursed by the company.

The actual expenses option is not always the winning strategy. Here are situations where the flat-rate allowance remains the better approach.

High salary with few expenses

A senior executive earning €130,000 benefits from an allowance of €13,000 (close to the cap). If they work primarily remotely and incur few travel costs, their actual expenses will fall short of this amount.

Full or near-full remote working

Remote working mechanically reduces commuting and meal expenses. Some employers' remote-work allowance may also be tax-exempt within certain limits, further reducing net déductible expenses.

Self-employed workers (TNS) under BIC or BNC régimes

Majority managers of SARLs, liberal professions operating under BNC, and sole traders do not declare salaries. Their professional costs are deducted directly from business profit — not via box 1AK. The 10% allowance and the actual expenses option do not apply to them in this context.

Increased audit risk

Claiming actual expenses triggers closer scrutiny from the tax authority. Incomplete documentation or amounts that appear disproportionate to the activity can result in a tax reassessment.

The deductibility of actual expenses is governed by precise administrative doctrine. Here are the most common mistakes observed by the experts at Hayot Expertise.

Deducting expenses already reimbursed

Mileage allowances paid by the employer, restaurant vouchers, and employer-covered Navigo at 50%: anything reimbursed by the employer cannot be claimed again as actual expenses. Deducting these amounts is a déclarative error that can be penalised.

Using the wrong mileage scale

The 2026 mileage scale (applicable to 2025 income) has been updated. Using the previous year's scale distorts the calculation. Always verify the in-force scale published by ministerial order.

Neglecting traceability

The tax authority can request supporting documents for actual expenses up to 3 years after the return is filed. Retain: invoices, transport statements, driving logs, diary screenshots, and expense claims refused by your employer.

Confusing professional expenses with other income deductions

Charitable donations, alimony payments, and childcare costs are not professional expenses. They appear elsewhere in the 2042 return and must not be included in the actual expenses calculation.

Ignoring consistency with the employer's DSN

The tax authority automatically cross-references your return against the Déclaration Sociale Nominative (DSN) submitted by your employer. A significant discrepancy between declared salary and reported expense reimbursements may trigger a request for clarification.

The choice between the 10% allowance and actual expenses is not a formality: it is a tax decision that can represent several hundred — or even several thousand — euros of income tax savings every year.

Key takeaways: