Withholding tax: which explains the change in your rate

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Unknown to a large number of taxpayers, the modification of the withholding tax rate sometimes remains unclear and subject to poorly understood conditions. In fact, this major change must be made by December 31 of the calendar year, otherwise, as of January 1, your deduction rate is appended to your last tax return. It is therefore essential to be concerned about it, otherwise you will have a bad surprise at the start of the year.

The withholding tax rate corresponds to your tax rate. It is used to calculate the percentage of your income deducted for your tax. Adapted to your recent tax return, it can be modified throughout the year in order to be adapted to your current financial situation. If this change is not made during the year, on January 1, it is the tax administration itself that determines your rate based on your last tax return. Better to get there as soon as possible.

To change your withholding tax rate, you can go to your personal space on the impots.gouv.fr website. A withholding tax management tool is available and allows you to update it according to a decrease or increase in your income. By requesting a new calculation of your withholding tax rate, you avoid making too large an advance, while reducing the amount that will be reimbursed to you the following year.

Several cases are possible and possible in order to recalculate your withholding tax rate. The decrease or increase in your income is the first major element, capable of causing you to have to modify your direct debit rate. It is also possible to adjust your direct debit rate when your personal situation changes. A birth, a marriage, a PACS, the death of your spouse, your retirement or a change in your professional situation are among the times when you can change this rate.

Various options are available to you in order to modify your direct debit rate. You can choose an individualized levy rate, which allows you to adapt the rate to the different incomes of your couple. If you are not in favor of communicating your deduction rate to your employer, you are offered the option of selecting a non-personalized rate. This possibility applies when you receive other income in addition to your wages.

In 2023, new rules have been designed to facilitate the modification of the withholding tax rate. As Capital reminds us, it was until now possible to change its rate, subject to a drop in income equivalent to 10%. As part of the finance bill for 2023, this percentage was reduced to 5% by the government of Elisabeth Borne to help taxpayers.

Thanks to this change, more French people will be able to modify their withholding tax rate. After completing this process, the change in your withholding tax rate will be registered by the tax authorities within two months.