The more you earn, the more you pay: this is the principle of income tax, which is based on a progressive scale. You, and all French households, are divided into the 5 brackets of the progressive scale, with rates ranging from 0% to 45%… but no one pays 45%. Statistical explanation.
Stop the misunderstanding! The income tax scale rates of 11%, 30%, 41% and 45% are not the rates applied to all of your income.. A household in the highest bracket of the scale, 45%, never pays 45% of its income to the Public Treasury.
For what? The bar applies as 5 slice sandwichincreasing gradually according to your level of resources: with the 2024 scale, which applies to the 2023 income that you currently declare, a single person with high income will pay 0% on 11,294 euros of net taxable income, then 11% up to 28,797 euros , 30% up to 82,341 euros, 41% up to 177,106 euros and 45% on everything that exceeds this last threshold.
| Income bracket by tax share | Rate applicable for the tranche |
|---|---|
| Up to 11294 | 0% |
| From 11295 28797 | 11% |
| From 28798 82341 | 30% |
| From 82342 177106 | 41% |
| More than 177106 | 45% |
Barme included in the finance law for 2024.
Average rate ≠ marginal tax rate
The 11%, 30%, 41% or 45% also appears on your 2023 tax notice, or on your 2024 declaration situation notice if you have already validated your declaration. This is your marginal tax rate (MTR).
But beware do not confuse this marginal tax rate and your average rate. Example: this year, a single person declaring 100,000 euros of salary to the tax authorities is in the 41% bracket but their average rate (and withholding rate at source) is 21.1%. It means that 21.1% of its net taxable income (90,000 euros, after the 10% reduction for professional expenses) is levied by the tax authorities: 21,129 euros in tax.
The 41%, your marginal tax rate, is only the rate applied to the upper slice of its resource sandwich: 41% on 7,659 euros (which exceeds 82,341 euros up to 90,000 euros).
More than 1 in 2 households in the 11% bracket!
The General Directorate of Public Finances (DGFiP) revealed on Tuesday April 16, among its abundant statistics on the 2023 tax, how the more than 40 million tax households in France are distributed.
| Marginal rate income tax | Number of households | Distribution of French households |
|---|---|---|
| 0% | 13million | 32.9% |
| 11% | 20 millions | 50.2% |
| 30% | 6.4 million | 15.7% |
| 41% | 436000 | 1.1% |
| 45% | 67000 | 0.2% |
Source: Minister of the Economy, Finance and Recovery – DGFiP
2023 tax statistics relating to 2022 income
Surprise: 50.2% of households appear in the bracket 11%! However, alone 44.7% of households pay income tax according to the same figures from the DGFiP… Weird? No: this means that several million households earn 11% of the bar in this bracket… without paying tax.
Clearly, these households are part of taxable households but do not have to pay income tax through credits and tax reductions, on the one hand, then through the discount reducing or eliminating the tax on the middle classes, on the other hand. Finally, the tax authorities take nothing if the annual tax does not exceed the bar of 61 euros.
Taxes: how much did you have to earn in 2023 to pay nothing in 2024?
At the other end, 67,000 households, or 0.2% of households, are affected by the upper bracket of the tax scale, 45%. But how much do the French people in these 5 brackets pay?
| Marginal rate income tax | Number of households | Average amount per household |
|---|---|---|
| 0% | 13million | – 48 |
| 11% | 20 millions | 530 |
| 30% | 6.4 million | 6678 |
| 41% | 436000 | 38180 |
| 45% | 67000 | 185046 |
Source: Minister of the Economy, Finance and Recovery – DGFiP
2023 tax statistics relating to 2022 income and MoneyVox calculations
Income tax: how much do the richest pay?
Thus, through the use of tax credits, the amount of the 33% of households margining in the 0% bracket is negative. The tax authorities therefore pay them 48 euros on average per year in income tax credits.
As for the 6.4 million households whose TMI is 30%, they pay on average 6,678 euros in annual tax. They represent a little less than 16% of households but pay more than 52% of the total tax amount. And the 0.2% of taxpayers in the highest bracket (45%) pay more than 15% of the total amount of tax collected by the state. This is the principle of the progressive bar.
Knowing your TMI, what is the point?
For a long time, finding your marginal tax rate was a tricky quest. The easiest way was to run the official tax simulator. New last year: your TMI now appears on your tax notice (and your declaration status notice after having validated your declaration), at the very bottom of your sheet in the other information section.
What is the use of knowing your TMI? It is mainly useful for savings and tax exemption products. Example: cutting back part of your 2023 income by tax exemption will allow you to reduce the top slice of your tax sandwich. For example, placing 1000 euros on a retirement savings plan (PER) if you have a TMI of 41% allows you to save, fiscally speaking, 410 euros, because you limit your taxed income bracket to 41%.
The PER, an investment for the rich?