The revaluation of the tax brackets will often make it possible to pay a little less income tax, News/Analysis Taxes

The 2023 income tax scale has been indexed to inflation at +5.4%. This revaluation therefore results in an increase in income determining the gradual entry into the different tax brackets (11%, 30%, 41% and 45%) in order to neutralize, in theory, the effects of inflation on the household tax level. This also makes it possible to prevent certain non-taxable households from falling into tax or that others pass into a higher bracket.

A tax already deducted at source in 2022

Entry into the tax is thus now from €10,777 (€10,225 last year) in the first bracket at 11% while the second bracket at 30% starts at €27,478 against €26,070 previously. Please note that these brackets concern income which has already been deducted at source in 2022 but whose final tax calculation will only take place after the spring 2023 tax return (the reporting period should open in early April).

It must be clearly understood that the revaluation of the tax scale is not made to directly compensate for consumer price inflation but to neutralize the indirect effect of the increase in wages or pensions, necessarily stronger when inflation is significant. Households whose income increases less quickly than inflation are therefore winners from the point of view of the scale of tax payable.

The average per capita salary of French people increased by 4.4% in the private sector

According to Urssaf statistics, the gap between the average increase in the average per capita salary in the private sector and inflation will not have been as large as one might have thought for the year. 2022. Urssaf has in fact measured a 4.4% increase in the average per capita salary to €2,932 in 2022 (up to +4.7% in the tertiary sector) in parallel with average inflation calculated by the ‘Insee at 6% excluding tobacco. The relatively good news is that the revaluation of the income tax brackets (+5.4%) remains slightly higher than the average increase in wages, with regard to the 19.2 million employees in the private sector.