why is my net taxable salary higher than the amount paid by my employer?

Question to an expert

Why does the salary I declare for taxes exceed the salary I actually received?

Salaries are taxed twice. Initially, the employer deducts social security contributions, that is to say 9.2% of generalized social contribution, the CSG, and 0.5% of contribution to the repayment of the social debt, the CRDS.

Secondly, salaries bear income tax, in the hands of the employee. This tax being based on income net of charges, the taxable salary is the gross less employee contributions and professional expenses.

The taxable salary should therefore also be net of social security contributions. For example, a salary of 100 euros net of social security contributions should be subject to income tax of 90.30 euros (100 euros less 9.70 euros).

But the CRDS is not deductible for the calculation of income tax. For its part, the CSG is only 6.8%. Concretely, the income tax relating to a salary of 100 euros is therefore calculated on 93.20 euros (100 euros minus 6.80 euros), while the employer only pays 90.30 euros to the employee.

From tax to tax

Up to the difference, i.e. 2.90 euros (93.20 euros less 90.30 euros), the employee pays income tax on non-deductible social security contributions. The taxable salary is therefore higher than the amount collected by the employee. This amounts to imposing a virtual income.

However, let us recall that in December 2023 the European Court of Human Rights condemned France for violation of the right to respect for property proclaimed by Article 1 of the first additional protocol to the European Convention on Human Rights. The result of individual entrepreneurs not members of an approved management center was increased by 25%.

The Court considered that the imposition of this virtual result was contrary to the right to respect for property. This reasoning can be transposed to non-deductible social security contributions for the calculation of income tax.