French Payroll Tax (Taxe sur les Salaires) 2026: Rates, Calculation & Filing

The taxe sur les salaires — France's employer payroll tax — is one of the most frequently overlooked charges among non-commercial organisations and healthcare practices. Unlike standard employer social contributions processed through the DSN payroll circuit, this tax is declared and paid separately to the tax authority (the Service des impôts des entreprises). Many structures discover their liability only at year-end, creating an unwelcome cash pressure in January.

In 2026, the progressive rate scale carries updated bracket thresholds, and the specific allowance for associations, foundations and trade unions under CGI article 1679 A rises to €24,256. This guide sets out the liability rules, how to calculate the charge, the applicable relief mechanisms, and the filing obligations — with worked examples and observations from the types of files we handle at Hayot Expertise.

The taxe sur les salaires (payroll tax) is owed by French employers who are not subject to VAT — or who were not subject to VAT on at least 90% of their prior-year revenue. It is calculated employee by employee on gross remuneration, using a progressive three-band scale: 4.25%, 8.50% and 13.60%. Associations, healthcare practices, credit institutions and pure holding companies are the main categories affected.

The liability rule is set out in article 231 of the CGI (Code général des impôts): any employer domiciled or established in France who is not a VAT payer — or who was not subject to VAT on at least 90% of their prior-year revenue — is subject to the payroll tax.

The main categories concerned are:

• Non-profit associations (loi 1901), foundations and trade unions employing staff without a predominant commercial activity;
• Hospitals, clinics, nursing homes (EHPAD) and medico-social establishments whose activities are largely VAT-exempt;
• Liberal healthcare professionals (doctors, dentists, nurses, physiotherapists) whose fees are exempt from VAT;
• Credit institutions and insurance companies subject to partial VAT regimes;
• Pure holding companies whose income consists mainly of dividends and financial products not subject to VAT;
• Cultural, sporting and educational non-profit organisations with employed staff.

Conversely, a standard trading company (SARL, SAS) fully subject to VAT on its sales is not liable. The boundary sits precisely at the 90% threshold: if your entity's VAT-taxable revenue exceeded 90% of total revenue in the prior year, you are exempt; below that, you are liable — at least partially.

When an employer carries out both VAT-taxable and VAT-exempt activities, the payroll tax is due only on the proportion of payroll corresponding to the VAT-exempt share of revenues. This mechanism is called the rapport d'assujettissement (liability ratio).

The formula is:

Liability ratio = VAT-exempt revenue (year N-1) / Total revenue (year N-1)

This ratio is recalculated each year using prior-year data, then applied to gross remuneration paid in year N to determine the taxable payroll base.

Example: a foundation has total revenue of €400,000 in year N-1, of which €100,000 is VAT-taxable (commercial lettings, ticketing) and €300,000 is VAT-exempt (grants, donations). The liability ratio is 300,000 / 400,000 = 75%. If the foundation's gross payroll in year N is €500,000, the taxable base is €500,000 × 75% = €375,000.

The ratio must be recalculated every year. A change in the structure of revenues — for example, developing a new commercial income stream — can materially alter the amount due from one year to the next.

The tax is calculated per individual employee on gross remuneration (base salary, bonuses, benefits in kind). Since 2013, the assessment base is aligned with that of the CSG (generalised social contribution) on employment income.

The top rate of 13.60% applies from remuneration above €18,422 per year — a threshold quickly reached for most salaried positions. For an organisation employing several dozen staff, the share taxed at the marginal rate typically represents the bulk of the charge.

Overseas departments: Specific rates apply in certain French overseas departments (Martinique, Guadeloupe, La Réunion). If your entity operates there, verify the applicable rates with your adviser.

Take a non-profit association employing one member of staff with annual gross remuneration of €32,000 and a liability ratio of 100% (activity entirely VAT-exempt).

Calculation steps:

1. Band 1 — from €0 to €9,229: €9,229 × 4.25% = €392.23
2. Band 2 — from €9,229 to €18,422 (i.e. €9,193): €9,193 × 8.50% = €781.41
3. Band 3 — above €18,422 (i.e. €32,000 − €18,422 = €13,578): €13,578 × 13.60% = €1,846.61
4. Gross payroll tax for this employee: €392.23 + €781.41 + €1,846.61 = €3,020.25

If the association employs 10 employees at the same remuneration level, the gross tax before allowances would be approximately €30,202 for the year.

Applying the CGI art. 1679 A allowance: €30,202 − €24,256 = €5,946 effectively due after the allowance.

In this scenario, the amount exceeds both the franchise threshold (€1,200) and the tapering threshold (€2,040), so no further reduction applies. The net payroll tax is €5,946.

A pattern we see regularly in association files: the per-employee calculation often produces a higher-than-expected figure for structures that reason in terms of total payroll rather than individual salaries. A chief executive on €80,000 gross annual salary generates approximately €8,400 in gross tax on their salary alone — before any allowance. Building this into the annual budget from the outset avoids the cash flow pressure that arises in January when the regularisation declaration is filed.

For very small employers, two relief mechanisms can reduce or eliminate the charge entirely:

The tapering relief acts as a progressive cushion between the two thresholds. For a calculated tax of €1,600, the relief is ¾ × (€2,040 − €1,600) = ¾ × €440 = €330, leaving €1,270 effectively due.

These mechanisms are applied to the employer's total annual payroll tax, not calculated per employee.

Article 1679 A of the CGI provides a specific annual allowance for qualifying non-profit organisations. In 2026, this allowance is €24,256 (up from €24,041 in 2025). It is indexed annually to the consumer price index.

The allowance is available to:

• Associations governed by the 1901 Law or by the Alsace-Moselle equivalent;
• Trade unions and professional associations;
• Foundations recognised as being of public utility;
• Mutual societies (mutuelles) governed by the Code de la Mutualité;
• Federations and unions of associations.

For a small association employing two or three part-time staff, this allowance can cover the entire calculated payroll tax, bringing the amount due to zero. For a larger organisation, it reduces the charge mechanically without eliminating it.

Important: the CGI art. 1679 A allowance does not stack with the franchise or tapering relief — only one mechanism applies, depending on which is relevant to the entity's specific situation.

Beyond the franchise and tapering mechanisms, certain entities are exempt by operation of law:

• Local authorities and their groupings (communes, intercommunalités, départements, régions);
• Public educational establishments;
• Employers whose prior-year revenue falls within the VAT franchise en base threshold — to be assessed on a case-by-case basis with your adviser.

For holding companies and financial structures, the position is more complex: whether the entity is liable depends on the precise nature of its income streams (dividends, interest, royalties) and how each is treated for VAT purposes. A detailed analysis of the revenue mix is required before drawing any conclusion.

Yes. The taxe sur les salaires is a deductible operating charge for computing taxable profit, whether the employer is subject to IS (impôt sur les sociétés — corporation tax) or to IR (income tax) under the BIC or BNC regimes. It therefore reduces the taxable base accordingly.

For associations and non-profit organisations not subject to standard IS, this deductibility has no direct tax effect — but the charge remains a real budget item that must be planned for.

Deductibility applies in the financial year in which the tax becomes payable, not necessarily the year in which it is physically settled. This distinction can affect reported results when a change in filing frequency aligns instalments with a different accounting period.

The frequency of declaration and payment depends on the amount of tax due for the prior year:

Regardless of frequency, an annual regularisation declaration (form 2502) must be filed in January of the following year. It summarises all remuneration paid during the year and adjusts for any difference between instalments paid and the final amount due.

Electronic filing and payment are mandatory for all declarations. Paper payments are no longer accepted.

For first-time filers: if your organisation becomes liable for the first time — through a new hire, a change in activity, or loss of VAT status — the payment frequency is set by an estimate of the current year's charge. Early advice from your accountant avoids late-payment penalties and interest, which accumulate quickly on material amounts.

Declarations are filed with the Service des impôts des entreprises (SIE) responsible for your establishment, through the professional area on impots.gouv.fr.

Sources: impots.gouv.fr — taxe sur les salaires; BOFiP BOI-TPS-TS; entreprendre.service-public.fr F22576; Légifrance — CGI art. 231 and CGI art. 1679 A.

The payroll tax is among the most frequently absent charges in the forward budgets we review when taking on new mandates. The explanation is structural: the tax does not appear on the employee payslip — it is an employer-side charge declared separately from the DSN payroll circuit — and it is not processed by the usual social agencies (URSSAF, pension funds), making it far less visible.

Across association and healthcare files, we regularly observe two recurring errors:

1. No monthly provisioning — the tax is calculated only in January when the annual declaration is filed, by which time the budget year is already closed. The cash impact can reach several thousand euros with no prior allocation.
2. An incorrectly calculated liability ratio — particularly when the organisation has developed a secondary commercial activity (shop, room hire, catering) that generates VAT-taxable income. An underestimated ratio leads to under-declaration, with the risk of a tax reassessment and associated penalties.

Outsourcing payroll management to a practice that handles these specifics means the payroll tax calculation is embedded in the monthly reporting dashboard — rather than surfacing as a surprise at year-end.

For liberal healthcare professionals, the payroll tax applies from the moment the first employee is hired. A medical practice moving from one to three assistants will see its charge increase materially, as remuneration levels in this sector routinely exceed the 13.60% threshold.

Coordinated tax management — VAT, IS (corporate income tax) and ancillary taxes — is most effective when handled by a single adviser who can anticipate interactions between these different flows.

Our team regularly advises associations, healthcare professionals and holding companies on these issues. Each situation requires analysis of your actual figures: liability ratio, applicable allowances, and filing frequency all need to be calibrated to your specific position. See also our services in payroll management and business taxation.

Disclaimer: this article is for information purposes only and reflects the rules as at 29 May 2026. It does not constitute personalised advice and cannot replace a review of your specific situation by a qualified professional. Rates, thresholds and legal conditions are subject to change — always verify the applicable rules on impots.gouv.fr and legifrance.gouv.fr before making any decision.