Understanding of Tax and Social Security Calculations

Hi
I am wondering if someone could help me with my understanding of tax and social security calculations.
What are the tax and social security payments applicable to me as a single individual, if I am an early retiree, with income from investments/rents, say 30k euros. I have no S1, so hope to enrol via PUMA for healthcare.

So my “tax” calculations are:

Tax
Based on the tax bands
Tax = 156250.11+42890.3 = 3005 euros

Social Security Payments
17.2% of total investment income
Social security = 0.172*30000 = 5160 euros

CSM via PUMA
I understand it to be 6.5% on everything over 20568 euros
CSM = 9432 * 0.065 = 613 euro

Total = 3005+5160+613= 8778 euros

OR

I have the option to pay the flat rate tax of 30% on investment income which includes tax and social security contributions.
Thus 30% of 30000 = 9000 euros
CSM via PUMA
CSM = 9432 * 0.065 = 613 euro

Total = 9000+613 = 9613 euros

Are the above calculations correct? Do I have to pay CSM for PUMA in addition to social security, or do the social security payments already include CSM?

Thanks

Hello @PeterE ,
I cannot help you I’m afraid but feel sure that an SF member will come along soon with the correct knowledge.
I felt I had to respond as from your calculations you are suggesting that from your 30k income your total deductions will be around 9k !!
Surely this cannot be right?

@PeterE

Peter… have you made contact with your local Tax Office…

I know that our one is (once again) offering face-to-face appointments… and I’ve always found them very helpful in the past…

Just a thought, as I’m not sure you’ve got the figures right (tax/social etc)

Sorry, the website removes the “*” signs unless there is a space on either side

Tax
Based on the tax bands
Tax = 15625 * 0.11+4289 * 0.3 = 3005 euros

You say that your income is investments and rents? That makes a difference.

Income from dividends can either be taxed at flat rate of 30%, which includes the social charges. Or you can opt for tax according to thresholds, where you get a reduction of 40% and don’t pay the 6.8% CSG (but do pay the other elements).

For rental income it depends in which country the property is located, and how much you get. For example, if in France and you get under 15,000€ then you can opt for micro-bic and get a reduction of 30% so only pay tax on 70%. Or regime reél where you pay on all the profit, so deduct all charges first plus depreciation. Either way you have to pay social charges, tho’. If it is in the UK then very different, and if beneath your UK personal threshold you’ll pay no tax at all, just social charges.

And paying social charges does not exempt you for paying cotisations to PUMA. Social charges are for many other things (which we will never benefit from) like unemployment benefit. PUMA is your health cover.

In France the devil is in the detail.

And with an income of 30,000€ e you are considered well-off, so proportionally are hardest hit. The system is geared to protect the less well-off. The average income in France is more like 23,000, and nearly 50% of the population pay no tax at all. Also be aware that if your rental income is based on property which (including your own home) is worth more than 1.3million you will pay an annula wealth tax. The system is also geared to extract more from the very wealthy. (Until you get to the likes of Amazon of course!)

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EDIT: You do know that your income tax for 2020 should have been submitted by now? Paper declarations were 28 May, and online varying dates according to department up to 8 June.

If you were resident in France last year, then crawl humbly to tax office pdq and you might get let off a fine if you do it now.

Thanks Jane. Fortunately I wasn’t resident last year. I am just trying to get my head around all the taxes and social charges which are due.

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Overall 30% for tax, social charges and healthcare…probably in the right sort of ball park. I would estimate somewhere between 25 and 30% is entirely possible.

The difference between people who are considered to be of modest means, and those in the category classed à l’aise is significant in the way taxes are calculated. Also for things like taxe d’hab which adds on another chunk.

And having an S1 is a huge benefit, and makes a huge difference. Although we still pay social charges on our earned income, not paying on pension and not paying the PUMA cotisations has been very noticeable in the quality of wine we drink.

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How much would someone pay on, say 38,000 salary income? Was I wrong in advising someone they’d lose about 50% of that as a single person? I was vaguely thinking about 7.5% solidarity and cotisations as well, they would be in a high-cotisation profession I expect.

I have no wish to divulge our income but I would certainly question your statement.
We are retired, late 60’s, dont have an S1 as having worked here we are totally integrated into the health system and recieve a modest French pension amongst other income streams.
Even if I add in tax hab/fonciere and our mutual we pay far less than the 25 to 30% you suggest.
We use a french accountant for our tax return each year so reasonable to assume declarations are correct, certainly when I scrutinise the return before submission all our income is declared.
You say the % is entirely possible?
I recall from time to time the press do a piece on the cost of bringing up a child which headlines at running into many 10’s of £1000,s but that is because they use worst case cost scenario for everything and we all know that isnt the case.
We have 4 children all of which went through prep and public school, then University and all on a builders income. If I was to use worst case scenario figures for their education then we wouldn’t have been able to do it for 1 never mind 4!
I think @PeterE would be best advised to seek professional advice rather than opinions as everyone’s case is different.

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Probably not that far off…it used to be 75% in terms of taxes and social charges, but this has been reduced in last years.

Social charges are just over 17%, plus the 7.5% solidarity. And anything over around 25k will be taxed at 30%, so prob about another 5k on that salary.

But likely to get all sorts of benefits, including employer paying for a mutuelle, lunches and all sorts of weird things.

Thanks Jane.

Fair dos to you Peter. The alchemy that is French Impots is not for the faint hearted. I have an accountant who does all that for me for not a lot of money. I’m happy that he ensures I don’t pay too much and, perhaps more importantly, I don’t under declare and get whacked. He’s also secured multiyear social security rebates for me that I didn’t even know I was entitled to.

Hi Karen

I have since come across a French tax calculator France Salary Calculator 2021/22 which may help, but it appears the deductions are closer to 30%. I also notice too that income tax is charged after most social security contributions have been deducted.
Complicated indeed!

Ta Peter.