The Finance Law for 2025 increases the income tax scale by 2%, which will have the effect of removing thousands of French people from taxation.
Currently, almost half of French people do not pay income tax, according to data published by the Directorate General of Public Finances. This share increases regularly due to the annual increase in the income tax scale. The year 2025 should follow this same trend. Explanations.
Revaluation of tax brackets
As part of the Finance bill for 2025, the government announced that the income tax scale will be indexed to inflation to “protect the purchasing power of the French”. This measure, the cost of which is estimated at 3.7 billion euros, will prevent nearly 530,000 households from being taxed.
Taking into account the forecast inflation excluding tobacco established by INSEE in 2024, the indexation will reach 2% and the 2025 tax scale will be as follows:
- For income not exceeding 11,520 euros: 0%;
- For income between 11,520 and 29,373 euros: 11%;
- For income between 29,373 and 83,988 euros: 30%;
- For income between 83,988 and 180,648 euros: 41%;
- For income above 180,648 euros: 45%.
It is important to note that taxpayers attached to a married person or with dependent children will see the amount of their tax relief also indexed to inflation. This will therefore go from 6674 euros to 6807 euros.
Indexation will finally apply on the monthly basis of withholding tax. In France, the withholding rate will be 0% for a person with a net taxable income of less than 1,623 euros. It will rise to 2.1% for taxable income of at least 1794 euros, to 4.1% for income greater than or equal to 2155 euros and less than 2298 euros, to 11.9% for income greater than or equal to 3546 euros and less than 3991 euros.
The monthly collection bases for the overseas departments will also be revised upwards. For example, the withholding rate for a person domiciled in Martinique will be 0% if their income is less than or equal to 1862 euros whereas the threshold was previously set at 1825 euros. Concerning Guyana and Mayotte, the ceiling for a 0% deduction rate will be higher than the others since it will reach 1994 euros compared to 1955 euros in the previous grid.
The wealthiest households favored
Taxpayers whose tax situation has not changed compared to the previous year will pay less tax in 2025 because a larger part of their overall taxable income will be subject to the lower brackets of the scale which are the least taxed.
Taxpayers whose tax situation has improved in 2024 will not necessarily pay more tax in 2025 because the revaluation of the scale amounts to overtaxing only the part of the increase in income greater than inflation. However, for those who benefited from an increase comparable to inflation, taxes will be close to those paid in 2024.
Ultimately, it is mainly the wealthiest households who will benefit the most from the tax cuts linked to the increase in the 2% scale. In fact, a smaller part of their overall income will be subject to their marginal tax rate which corresponds to the highest rate of the scale to which they are subject.
Simulate your income tax amount
Taxpayers must take into account several elements to know if they will be taxable in 2025, starting with their annual income received in 2024. It is necessary to deduct any possible allowances, deductible charges and other property and professional deficits. Family situation also has an impact on the amount to be paid because it allows you to deduct a certain number of tax shares from your household. For example, an adult is one share and a child is half a share up to two children. From 3th child, the child counts for a full share.
To get a better estimate of the amount of tax to pay in 2025, it is recommended to use a free, no-obligation online simulator. The simulator for calculating the 2025 tax on 2024 income will soon be made available on the impots.gouv.fr website in simplified and full versions. The result is given for information only. It is in no way equivalent to a tax return and only depends on the data that will be transmitted via the form.
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