Payroll tax 2026: who pays, calculation and declaration

Updated March 2026 - The payroll tax mainly concerns employers who pay remuneration without being fully subject to VAT. It is often underestimated because it is associated with associations, while it can also affect certain holding companies, mixed structures, organizations exempt from VAT and companies whose activity is only partially taxable.

The 2026 payroll tax targets employers who pay salaries but who do not collect, or do not collect enough, VAT on their activity. The starting point is therefore not payroll alone. It is the pair VAT + remuneration which determines the liability. As soon as a structure has little VAT but payroll, the question must be examined every year.

The principle is as follows: the payroll tax targets employers who pay remuneration and are not subject to VAT, or have not been so on at least 90% of their turnover for the previous year.

In practice, this may concern:

• associations;
• certain holding companies;
• professions exempt from VAT;
• health or education structures depending on their activity;
• companies partially outside the VAT scope;
• companies which have mixed, taxable and non-taxable activities.

The good reflex is to check the VAT profile of the entity, not just its payroll volume.

The risk is not just about the amount to pay. It is also due to the poor qualification of the scope, the poor reporting rhythm and the fact that the tax can be discovered late, sometimes during an audit.

The most common errors are as follows:

• forget that a holding company may be concerned;
• think only about taxes without looking at payroll;
• misapprehend the relationship to VAT;
• confuse an absence of VAT collected with an absence of liability;
• discover the tax at the time of the check;
• do not include the subject in the annual closing checklist.

This subject should be read with our article tax or social issue, our guide on mandatory tax declarations 2026 and, for executive arbitrations, the taxation of dividends.

Hayot Expertise Advice: as soon as a structure has employees but little or no VAT collected, payroll tax must be included in the closing schedule. The question is addressed before payroll is submitted, not after.

The correct method consists of checking four points:

A simple reading of the turnover is not enough. It is necessary to analyze the VAT regime, collection flows, the presence of employees and possible sectoral exemptions.

Let's take a holding company which charges little VAT but which employs an administrative employee. If the VAT collected does not sufficiently cover the taxable activity, payroll tax can become a real issue. Same logic for an employing association which carries out some ancillary operations taxed with VAT: it is necessary to precisely measure the taxable portion and its effect on the tax due.

Another frequent case: a practice or paramedical structure which employs staff but remains mainly outside the VAT scope. Here too, the simple reflex "we don't do VAT, so there is nothing to see" can be misleading.

The calculation is never purely theoretical. It is based on the remuneration paid, then it is necessary to check what sums actually enter into the base and how they must be broken down if the structure has mixed activities. This point is important because the same company can have income subject to VAT, others not subject to it, and a payroll distributed between several functions.

Useful work therefore consists of:

1. isolate the remuneration to be taken into account; 2. check the share of activity taxable for VAT; 3. test the 90% taxable turnover criterion when it applies; 4. document the periods and bases used; 5. reconcile the figures with payroll and accounting before filing.

In practice, the danger does not come only from the rate. It mainly comes from a poorly prepared base, an approximate breakdown or a poor connection between VAT and payroll. A company that automates its calculation without human control often takes more risk than it saves in time.

An annual check is the minimum. But for exposed structures, it is often preferable to establish an intermediate point during the year, especially in the event of a variation in VAT, hiring or a change of activity.

The correct rhythm is generally as follows:

• a check during the previous closing;
• a reset point in the middle of the exercise;
• a verification before each closing or major deposit;
• a review as soon as a change of regime is decided.

This monitoring avoids the classic scenario where the tax is discovered at the time of the annual regularization, when it is too late to correct the structuring of the year.

To avoid an unpleasant surprise, you must check:

• the level of VAT liability;
• the payroll concerned;
• declarative periodicity;
• the configuration of payroll and declaration tools;
• any exemptions or special cases;
• consistency between accounting, VAT and payroll.

The basic rules are exposed on Service-Public, Impots.gouv.fr and in the BOFiP. These are the best points of support to confirm the general framework.

The right time is before the first anomaly, not after. Consult as a priority if:

• your structure employs employees and charges little VAT;
• you have a holding company or a mixed structure;
• your activity changes during the year;
• you have received a letter from the administration;
• you must choose between several forms of remuneration;
• you are unsure about the correct treatment in payroll or DSN.

The accountant can check the liability, calculate the base, organize the documents and help you avoid inconsistencies between VAT and payroll.