Flat tax 2026: rate, calculation and options

Updated March 2026 - The French flat tax, or prelevement forfaitaire unique (PFU), remains the default regime for many forms of investment income in France. Its apparent strength is simplicity. Its weakness is that it often gives an incomplete picture of the real cost. In 2026, the useful question is not whether the flat tax is "good" or "bad", but when the 30% PFU is preferable to the progressive income-tax option, and when other contributions need to be factored into the analysis.

The PFU generally corresponds to a global 30% rate, made up of:

• ▸12.8% income tax;
• ▸17.2% social levies.

It applies in particular to many forms of:

• ▸dividends;
• ▸interest;
• ▸gains on transfers of securities.

For some households, the effective burden can exceed 30% once you add:

• ▸the exceptional contribution on high income;
• ▸the wider effect of the household's total income composition.

In other words, a headline 30% rate can be misleading if it is read without reference to the broader tax profile.

Electing for the progressive scale may become relevant if:

• ▸your marginal income-tax bracket is relatively moderate;
• ▸you receive dividends benefiting from the 40% allowance;
• ▸deductibility of part of the CSG becomes useful in your situation.

However, this option is global for the relevant investment income of the year. It cannot be chosen line by line. That is why the decision should be tested through a full annual simulation rather than a quick isolated comparison.

To arbitrate correctly, the issue should be linked to executive-remuneration strategy. Our articles on dividends vs salary, how to avoid the flat tax legally and PUMA tax 2026 help extend the analysis.

If you are a company director or shareholder, you usually need to review together:

• ▸the level of remuneration;
• ▸the amount of distributable dividends;
• ▸your personal tax burden;
• ▸the possible exposure to subsidiaire maladie contributions;
• ▸the use of a holding structure for capitalisation.

A dividend that looks lightly taxed at first glance can become less attractive than properly structured remuneration once all the tax and social effects are taken into account.

The PFU often stays attractive when:

• ▸you are already in a high income-tax bracket;
• ▸you mainly receive interest or capital gains;
• ▸you are looking for predictable taxation;
• ▸there is no strong benefit in opting globally for the progressive scale.

The most common errors are:

• ▸comparing PFU and the progressive scale without including social levies;
• ▸looking only at income tax without considering social-protection effects;
• ▸forgetting the exceptional contribution on high income;
• ▸distributing dividends without modelling the PUMA effect.

Hayot Expertise insight: for a business owner, the flat tax is never an isolated decision. It is one piece of a broader puzzle that also includes remuneration, holding structures, retirement strategy and personal cash needs.

The best way to decide is to run a full simulation rather than rely on a theoretical headline rate.

Try our executive remuneration simulator

In 2026, the flat tax remains simple and often efficient, but it is not always the optimal choice. As soon as dividends become meaningful, a broader tax and social review becomes necessary to avoid bad surprises. The right answer is almost always the one that reflects your full situation, not the one that looks simplest on paper.

Want to know whether the PFU is really the best option in your case?
We can model the remuneration and distribution trade-off with your actual figures.

Book an appointment with an expert

(Official sources: Service-Public on securities gains, Entreprendre.Service-Public on dividends, Service-Public on the exceptional contribution on high income, economie.gouv.fr on the Finance Act 2026)