From July 1st, the tax authorities will make a change to pay slips: beware of unpleasant surprises
The change will quietly take place in the middle of summer and could bring a nasty surprise for the start of the school year. While the tax return campaign has been over for a few weeks, the tax authorities will now tackle a completely different project: the overhaul of withholding tax. And in September, this could affect some pay slips...
Since its introduction in 2019, several options have been available. Either an individual rate applies, specific to the person; or a household rate, i.e., the same rate applies to the couple's salaries; or a neutral rate, i.e., the person sets their own monthly deduction rate.
For couples who file jointly, the household rate has, until now, been applied by default. Even if there is a salary gap between the two people, the couple is deducted the same percentage every month. This rule can therefore create inequity, even if it could have been avoided by taking steps with the tax authorities. By checking a box and doing the process yourself, it was possible to obtain a different rate, known as the "individualized rate." But things are about to change!
From now on, this individualized rate will apply de facto to each member of the couple. The household rate can only be chosen as an option. Thus, all couples currently on the joint rate will see a change on their pay slips starting in September.
The withholding tax will no longer be the same for both, but higher for one and lower for the other (except in the case of similar salary receipt, of course). This will therefore lead to salary variations. This change will also be added to the rate changes linked to the evolution of your income between 2023 and 2024. These will also apply from September. Beware of unpleasant surprises, your net salary after tax could therefore well decrease at the start of the school year.
The DGFiP will be transmitting the new withholding tax rates to employers starting July 1st . A two-month period is therefore planned for the new system to be implemented and applied from the start of the school year, with an impact starting with payroll received at the end of September.
However, users who wish to maintain the household rate can opt out. They have until June 30 to make their decision. To do so, go to your personal space on the tax website, select "Manage my withholding tax," then click on "Maintain the household rate of your withholding tax."
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