Withholding income tax at source — the employer's obligations
Withholding at source means deducting part of an employee's income tax from their pay every month. The employer never sets the rate: it is determined FOR EACH EMPLOYEE by the tax administration, from their latest income tax return, then sent to the employer — every month, so that the rate applied reflects the most recent position. The employer has 60 DAYS to apply a rate made available to it. The scheme is fully built into the monthly payroll declaration: the employer withholds at the same time as social security contributions, then pays the amount over to the business tax office. Three rates coexist: the individualised rate, which applies by default, the household rate, which the employee may ask for, and the neutral rate, which depends only on the pay given.
Up to date for 2026 — verified on September 11, 2026Official procedure, no printed formGuide: about 30 min
Deadlines
- Every month
- The employer withholds the income tax at source monthly, at the same time as social security contributions, and pays it over to the business tax office.
- 60 days to apply a new rate
- The rate is sent each month by the tax administration; the employer has 60 days to apply the rate made available to it.
Documents to prepare
- The rate sent each month by the tax administration, employee by employee
- The date the rate was made available, which starts the 60-day period
- The month's covered pay: wages, salaries, profit-sharing and incentive sums paid out immediately
- The neutral rate tables, for employees with no personalised rate sent
- Access to the payroll declaration, into which the scheme is fully built
- Details of the business tax office, which receives the payment
No form is attached to this procedure: the link leads to the official page that describes it.
What this page gives you
The guide above and the link to the official site. ActioFin does not produce any document for this page: whatever you fill in or file is done on the official medium.
Who this applies to
- Every employer paying wages and salaries, which withholds each month
- Employees receiving profit-sharing or incentive sums paid out immediately, where those sums are not placed in an employee savings plan
- Bodies paying daily social security allowances for sickness, accident or maternity
- The employment service for unemployment and early-retirement benefits, and pension funds for pensions — it is always the person or body THAT PAYS which withholds
- Self-employed people are NOT subject to collection at source: their income gives rise to instalments computed by the administration from the previous year's declared income
- Employers in the Tese simplified scheme, for whom that service takes on all the operations involved
Worked example
Example: Imprimerie Lombard applies three different rates in the same month
Imprimerie Lombard is paying March salaries. For its workshop manager, the tax administration has sent an individualised rate, computed on her latest income tax return and different from her spouse's, since that rate covers only each person's own income. For its team leader, who is married, the household rate applies: he asked for it from his online account, through the withholding management service. For an employee taken on in February who has never filed an income tax return, no personalised rate has been sent: the printer applies the neutral rate, set by tables drawn up by the administration and depending only on the pay it gives. The same neutral rate would apply to an employee who chose not to disclose their personalised rate. The printer withholds all three amounts at the same time as social security contributions, reports them in the March payroll declaration and pays the whole over to the business tax office. A new rate received on 20 March need not be applied at once: it has 60 days.
How to fill it in, step by step
- Identify the pay concerned: wages and salaries, profit-sharing and incentive sums paid out immediately where they are not placed in an employee savings plan.
- Collect the rate sent each month by the tax administration for each employee: the employer never computes it itself.
- Apply the rate within the 60 days you have from it being made available.
- Failing a personalised rate — an employee who has never filed a return, a rate not sent or sent late, or an employee who chose not to disclose it — apply the neutral rate, set by the tables drawn up by the tax administration from the pay given alone.
- Withhold monthly at the same time as social security contributions.
- Report the pay and the amount withheld in the monthly payroll declaration, into which the scheme is fully built.
- Pay the amount withheld over to the business tax office.
- If you are in the Tese simplified scheme, let it take on all the operations involved in withholding at source.
The form, line by line
- Individualised rate
- The rate that applies by default. Computed by the tax administration from each person's income, it therefore differs between married or civil-partnered spouses taxed together, and covers only each spouse's or partner's OWN income.
- Household rate
- The employee may ask for it, through their own online account and the withholding management service. It is THEIR step, not the employer's.
- Neutral rate (or default rate)
- It applies in three cases: the employee chooses not to disclose their personalised rate; they have never filed an income tax return; or the standard rate is not sent to the employer, or is sent late. It depends ONLY on the pay given by the employer, according to tables drawn up by the administration.
- The 60-day period
- The time the employer has to apply a rate made available to it — which is why a change of circumstances does not show up in the following month's pay.
- Built into the payroll declaration
- The scheme is FULLY built into the monthly payroll declaration: there is no separate withholding return.
Good to know
- The employer has no discretion over the rate: it is determined by the tax administration for each employee and sent to the employer.
- For wages the scheme takes the form of WITHHOLDING at source, but some income is not collected at source at all and gives rise to INSTALMENTS computed by the administration — notably the income of self-employed people.
- The individualised rate exists to reflect income disparities within a couple: it is not an advantage to be applied for, it is the default position.
- The household rate is a step for the EMPLOYEE, from their online account: the employer neither invites it nor takes it on their behalf.
- The neutral rate depends only on the pay given by the employer: it therefore reveals nothing about the employee's tax position, which is precisely its purpose.
- The scheme reaches beyond wages: daily social security allowances, unemployment and early-retirement benefits and pensions are all covered, each withheld by the body that pays.
- An employer in the Tese simplified scheme has that service take on all the operations involved in withholding at source.
Common mistakes
- Computing a rate yourself: it is determined by the tax administration for each employee and sent to the employer.
- Applying every new rate the moment it arrives: the employer has 60 days, and payroll need not be redone in haste.
- Failing to apply a rate beyond that 60-day period.
- Applying a personalised rate where none was sent or where it was sent late: the neutral rate governs.
- Making the household-rate request on the employee's behalf: it is done from THEIR online account.
- Trying to withhold at source on self-employment income: that gives rise to instalments computed by the administration, not to collection at source.
- Producing a separate withholding return: the scheme is fully built into the monthly payroll declaration.
- Failing to pay over to the business tax office what has been withheld.
Frequently asked questions
Who sets the withholding rate?
The tax administration, for each employee, from their latest income tax return. It then sends it to the employer, every month, so that the rate applied reflects the most recent position.
What are the three possible rates?
The individualised rate, which applies by default and is computed on each person's own income; the household rate, which the employee may ask for from their online account; and the neutral rate, which depends only on the pay given by the employer.
When does the neutral rate apply?
Where the employee chooses not to disclose their personalised rate, where they have never filed an income tax return, or where the standard rate is not sent to the employer or is sent late.
How long is there to apply a new rate?
The employer has 60 days to apply the rate made available to it by the administration.
How is the amount reported and paid over?
The scheme is fully built into the monthly payroll declaration. The employer withholds at the same time as social security contributions, then pays the amount over to the business tax office.
Are self-employed people covered?
Not by collection at source: their income gives rise to instalments, computed by the tax administration from the previous year's declared income.
Go further
Compute the related amounts
Understand this form: the related course
Official sources
- entreprendre.service-public.gouv.fr — Income tax withheld at source: employer's obligations (checked 6 February 2026): principle of monthly withholding from pay, income covered (wages and salaries, profit-sharing and incentive sums paid out immediately, daily social security allowances, unemployment and early-retirement benefits, pensions), withholding by the person or body that pays, instalments for income not collected at source including that of the self-employed, handling by the Tese service for member employers, rate set by the tax administration for each employee from their latest return, individualised rate applying by default and covering only each person's own income, the employee's option for the household rate through the withholding management service, the neutral rate and its three cases of application under tables drawn up by the administration, monthly transmission of the rate and the 60-day period to apply it, full integration of the scheme into the payroll declaration, monthly withholding alongside social security contributions and payment over to the business tax office (French General Tax Code, articles 204 A, 204 B, 204 E, 204 F and 204 M) — September 11, 2026
- entreprendre.service-public.gouv.fr — Monthly payroll declaration (DSN), online service: the vehicle into which withholding at source is fully built, filed monthly on net-entreprises.fr no later than the 15th of the following month for businesses with fewer than 50 staff and the 5th for those with 50 or more — September 11, 2026
Guide and document provided for information purposes only; they do not constitute personalised legal or tax advice. Check the recipient organisation's requirements and consult a professional if needed.