How should the employer apply the levy at source (PAS)?

Verified 07 June 2024 - Directorate for Legal and Administrative Information (Prime Minister)

Withholding tax (SAP) is the monthly deduction from wages of part of the income tax payable by the employee. In order to carry out this operation, the employer applies a rate established by the tax authorities.

The withholding tax (SAP) relates to the following income or remuneration:

  • Salaries, wages, payments made immediately to employees under the participation or profit-sharing to the company's profits
  • Retirement pensions
  • Unemployment benefits (UA) and early retirement allowances
  • Per diem social security contributions (IJSS) in the event of sickness, accident or maternity

FYI  

The SAP takes the form of a withholding tax on salaries and wages and on retirement pensions.

The rate of the SAP is determined for each employee by the tax authorities. It then sends it to the employer.

Calculation of the withholding tax rate (SAP)

The rate of withholding tax (PAS) is determined for each employee by the tax administration. It is calculated on the basis of the employee's last income tax return.

We are talking about personalized rates. But the employee can choose to apply a neutral rate.

Custom Rate

That's the rate applied for each tax shelter (for example, married couple or partners linked by a Civil partnerships: titleContent and dependent children). It applies to all income in the tax household.

To take account of any disparities in income within the couple, this rate may be individualized for personal income alone (wages, pensions, BIC: titleContent, etc.) of each Civil partnership or partner.

Neutral rate (or default rate)

An employee may choose not to disclose his or her personalized tax rate to his or her employer. In this case, the federal government applies a neutral rate that does not take into account the family situation.

This rate depends solely on the amount of remuneration paid by the employer.

This rate also applies when the employee has never filed an income tax return or when the ordinary tax rate is not transmitted to the employer or is transmitted late.

The neutral rate is determined based on grids drawn up by the tax authorities.

Transmission of the withholding tax rate (SAP)

The withholding tax rate is transmitted each month by the tax administration to the employer so that he can apply the rate reflecting the most recent situation of the employee. The employer has a 60-day period to apply the rate which has been made available to it by the administration.

An employer who pays wages must take out a registered social declaration (DSN). Source sampling is a fully integrated device in the DSN. The employer must deduct the withholding tax on income tax (IR) at the same time as the social security contributions on a monthly basis. He then repays the withholding tax to the company tax service (SIE).

Salary reporting via DSN

An employer who pays wages must file a registered social declaration (NSN) every month depending on the period of paid employment. It's a statement online.

The NSN includes the following statements:

  • Monthly declaration which is used to transmit information on employees to social organizations such as France Travail, the CPAM: titleContent, the Urssaf and to pay employees' social security contributions.
  • Event Declaration to report events (work stoppages and termination of employment contracts). It must be done within 5 working days later.

FYI  

Some employers are not subject to the NSD. This is particularly the case for foreigners employers whose employees reside in France. They have to file a so-called "withholding tax for other income" (PASRAU) return.

The DSN is transmitted within a time frame that varies with the size of the company:

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Company of less than 50 employees

DSN must be completed on the 15th day of the month following the period of work paid:

Nominative Social Declaration (DSN)

The DSN contains various data concerning the employee, employment contracts, remuneration, contributions paid, etc. These can be consulted on the document from Net-companies.

Company of more than 50 employees

The DSN shall be made:

  • Either the 5 of the month following the period of paid work for employers who pay in the same month as the work period
  • Either the 15 of the month in other cases.

Nominative Social Declaration (DSN)

The DSN contains various data concerning the employee, employment contracts, remuneration, contributions paid, etc. These can be consulted on the document from Net-companies.

Withholding tax at source

Withholding tax is applied to the taxable net amount salary. This amount is obtained after deduction of social contributions and the deductible share of the CSG: titleContent.

Payment of the withholding tax to the DGFIP

The withholding tax levied and declared via the DSN is then remitted to the company Tax Office (SIE). The competent EIS shall be that of the company's registered office (employer).

Who shall I contact
Payment of withholding tax (RAS)

The employer pays the withholding tax (RAS) to the company Tax Service (SIE) by remote payment.

To do this, he must declare and validate a bank account in the business area of the tax website:

Impots.gouv.fr professional space

Turnaround time

The withholding tax is remitted to the tax authorities the following month the one during which the detention took place.

When the employer makes the pay after the monthly period of employment (a practice known as payroll offset), withholding tax is remitted in the month in which the deduction is made.

FYI  

The company of less than 11 employees can opt for a quarterly remittance: not later than the 15th day of the first month of the quarter following the one during which the deductions took place.

The employer faces tax and criminal penalties if it does not comply with the withholding tax regulations.

Tax sanctions

The employer is liable to a fine in the following cases:

  • in case of omissions or inaccuracies: 5% withholding taxes that should have been made or reported
  • if no declaration is made within the time limits: 10% withholding taxes that should have been made or reported
  • in the case of intentional inaccuracies or omissions: 40% withholding taxes that should have been made or reported
  • in the case of no declaration and no return to the tax authorities: 80% withholding taxes made

There can be no overlap between these different fines.

FYI  

The fine may not be less than €250 by declaration.

The delay in the payment of the withholding tax shall give rise to a increase of 5% of the amount not paid.

Criminal sanctions

Voluntary failure to declare and remit the withholding tax to the tax authorities may result in a criminal fine of €1500 if the delay exceeds one month.