How to Calculate Taxable Net Pay on French Payslips in 2026: A Complete Employer’s Guide

In brief — how to calculate the taxable net. The taxable net (net imposable, also called net fiscal) is the amount used as the basis for the employee’s income tax. It is built up from gross salary:

Taxable net = gross salary − deductible employee contributions (including deductible CSG at 6.80%) + non-deductible CSG (2.40%) + CRDS (0.50%) + taxable employer share of complementary health/provident cover − exempt overtime

It is higher than the net pay (the non-deductible CSG and CRDS are added back) and different from the net social amount (montant net social). Figures reflect the 2026 parameters (PASS — annual social security ceiling; CSG/CRDS).

Introduction: understanding taxable net in payroll

The taxable net (net imposable) is one of the most strategic items on the payslip. It determines the basis on which the employee will be taxed for income tax purposes, and it is the figure transmitted to the tax authorities via the DSN (Déclaration Sociale Nominative — the standardised monthly social reporting return). Yet its construction is often poorly understood, even by experienced payroll professionals.

In 2026, several parameters affect the calculation of the taxable net: the non-deductible CSG, the CRDS, the employer share of complementary social protection (PSC), exempt overtime, and the 1.75% allowance applied to the CSG/CRDS base. This complete guide walks you step by step through mastering this essential calculation, drawing on the references of the BOSS (Bulletin Officiel de la Sécurité Sociale — the official social security guidance) available at boss.gouv.fr.

What is the taxable net?

Definition and role on the payslip

The taxable net, sometimes called the net fiscal, corresponds to the amount of salary income subject to income tax. It has been a mandatory line on the payslip since the reform simplifying payslips. It must not be confused with the net pay before tax (net à payer avant impôt) or with the net social amount (MNS — montant net social).

In practical terms, the taxable net is calculated using the following formula:

Taxable net = Gross salary – deductible employee contributions + non-deductible CSG (2.40%) + CRDS (0.50%) + taxable employer PSC share

It is essential to distinguish these three concepts:

Net pay before tax (net à payer avant impôt): the amount the employee actually receives in their bank account, before the withholding tax (prélèvement à la source, PAS).
Taxable net (net imposable): the basis for calculating income tax. It is higher than the net pay because it adds back the non-deductible CSG and the CRDS.
Net social amount (MNS): introduced in 2023, it serves as the reference for social benefits (RSA, activity bonus). It differs from the taxable net because it does not incorporate the same adjustments.

The components of the taxable net calculation

Gross salary: the starting point

The taxable net calculation starts from gross salary, which comprises all elements of remuneration: base salary, bonuses, benefits in kind, overtime, and various allowances subject to contributions. For an employee earning a gross monthly salary of €3,200, this is the amount that constitutes the starting point.

Deductible employee contributions

From the gross amount, all mandatory employee contributions that are deductible from income tax are subtracted. This includes:

Health, retirement and unemployment insurance contributions;
Supplementary pension contributions (Agirc-Arrco);
The deductible CSG at a rate of 6.80%;
Employee provident and health insurance contributions (employee share).

Note: the deductible CSG (6.80%) is indeed subtracted from the gross amount to obtain the taxable net, but the non-deductible CSG (2.40%) and the CRDS (0.50%) are not.

Non-deductible CSG (2.40%) and CRDS (0.50%)

These two contributions, although withheld on the payslip, are not deductible from income tax. They must therefore be added back into the taxable net. In practice, they increase the employee’s taxable base.

In 2026, the applicable rates are:

Total CSG: 9.20%, of which 6.80% is deductible and 2.40% is non-deductible;
CRDS: 0.50%, entirely non-deductible.

These contributions apply to 98.25% of gross salary (after applying the 1.75% allowance), up to a limit of four annual social security ceilings (4 PASS), i.e. €192,240 in 2026. Above this threshold, the CSG and CRDS apply to 100% of remuneration, with no allowance.

The 1.75% allowance on the CSG/CRDS base

In accordance with the BOSS, a flat-rate allowance of 1.75% is applied to employment income when calculating the CSG and CRDS base. This allowance represents professional expenses. It applies only to the portion of remuneration less than or equal to 4 PASS (i.e. €192,240 per year in 2026, or €16,020 per month).

Example: For a gross salary of €3,200, the CSG/CRDS base is: €3,200 × 98.25% = €3,144.

The employer’s contribution to funding the mandatory health insurance and provident cover constitutes a taxable benefit for the employee. Although it is not subject to social security contributions (within certain limits), it must be added back into the taxable net.

In practice, if the employer covers €60 per month of health insurance and €25 per month of provident cover, i.e. €85 in total, this amount is added to the employee’s taxable net.

BOSS reference: the employer share of PSC is subject to CSG/CRDS but excluded from the base for social security contributions within the limits set by Article L.242-1 of the French Social Security Code.

Complete example of a taxable net calculation in 2026

Example data

Take the case of a cadre (managerial-status) employee with the following elements:

Gross monthly salary: €3,200
Total employee contributions (excluding CSG/CRDS): €580
Deductible CSG (6.80% × 98.25% × 3,200): €213.79
Non-deductible CSG (2.40% × 98.25% × 3,200): €75.46
CRDS (0.50% × 98.25% × 3,200): €15.72
Employer health insurance share: €60
Employer provident cover share: €25

Step-by-step calculation

Step 1: Gross salary = €3,200

Step 2: Deduction of deductible employee contributions = 3,200 – 580 – 213.79 = €2,406.21

Step 3: Adding back the non-deductible CSG = 2,406.21 + 75.46 = €2,481.67

Step 4: Adding back the CRDS = 2,481.67 + 15.72 = €2,497.39

Step 5: Adding back the employer PSC = 2,497.39 + 85 = €2,582.39

The monthly taxable net is therefore €2,582.39.

The treatment of exempt overtime

The principle of tax exemption

Since the reactivated TEPA Act, overtime hours (and additional hours for part-time employees) benefit from an income tax exemption up to a limit of €7,500 net per year. This ceiling is assessed over the calendar year.

In practice, the pay for exempt overtime is removed from the taxable net, which reduces the employee’s taxable base.

Impact on the taxable net calculation

If an employee works overtime whose taxable net pay amounts to €250 in the month, and they have not yet reached the annual ceiling of €7,500, then this sum will be deducted from the taxable net.

Example: Take our employee again, with a taxable net of €2,582.39. If they worked exempt overtime for €250, their taxable net becomes: 2,582.39 – 250 = €2,332.39.

The employer must track a running annual total of exempt overtime to check compliance with the €7,500 ceiling. Beyond that, overtime pay becomes taxable again.

Meal vouchers (titres-restaurant) and the taxable net

The employer’s contribution to meal vouchers (titres-restaurant) is exempt from income tax within certain limits. The employer share is exempt if it meets the following conditions:

It represents between 50% and 60% of the voucher’s value;
It does not exceed the exemption ceiling, revalued each year in the same proportions as the first bracket of the income tax scale (€7.32 per voucher as of 1 January 2026; BOSS, Article 81-19° of the French General Tax Code).

If the employer’s contribution respects these limits, it does not need to be added back into the taxable net. Conversely, any excess must be added to the employee’s taxable net.

The link between the taxable net and the DSN

Transmission to the tax authorities

The taxable net is transmitted monthly to the tax authorities via the DSN. It is this figure that enables the calculation of the withholding tax (PAS — prélèvement à la source). The PAS rate, whether personalised or neutral, is applied directly to the taxable net to determine the amount of tax withheld each month.

Errors in calculating the taxable net therefore have direct consequences:

On the amount of PAS withheld each month;
On the employee’s pre-filled income tax return;
On any URSSAF or tax audits.

Verification and correction

If an error is detected in the taxable net, the employer must carry out a correction in the DSN. It is advisable to systematically check the consistency between the taxable net shown on the payslip and the one transmitted in the DSN, in particular in the event of:

Salary back-payments;
Contribution adjustments;
Changes in circumstances (part-time work, sick leave, etc.).

Special cases affecting the taxable net

IJSS (daily allowances) paid by the CPAM in the event of illness are taxable (except in certain cases linked to a long-term illness, ALD). When the employer applies subrogation (paying the employee and receiving the allowances directly), the IJSS are incorporated into the payslip and must appear in the taxable net.

Benefits in kind

Benefits in kind (company car, housing, meals, IT/telecom equipment) are incorporated into gross salary and therefore into the taxable net. They may be valued on a flat-rate or actual basis, according to the BOSS rules.

Employee savings

Sums paid under profit-sharing (intéressement) or statutory profit-sharing (participation) are not taxable if they are allocated to a savings plan (PEE, collective PER). However, if the employee opts for immediate payment, these sums are added to the taxable net.

Termination indemnities

Severance indemnities are exempt from income tax within certain limits (the highest of: the statutory or collectively agreed indemnity, 50% of the total indemnity, or 2 PASS). Above that, the excess portion is taxable and incorporated into the taxable net.

Best practices for payroll managers

Monthly control points

To ensure the accuracy of the taxable net, it is advisable to set up the following controls:

Check the calculation formula in the payroll software, particularly after configuration updates;
Verify the add-back of the employer PSC, especially when changing the health insurance or provident cover scheme;
Track the running total of exempt overtime to detect crossing the €7,500 threshold;
Reconcile the taxable net on the payslip with the corresponding line in the DSN;
Archive payslips and supporting documents to facilitate any audits.

Common errors to avoid

The main errors found in practice are:

Failing to add back the employer PSC share;
Confusing deductible and non-deductible CSG;
Not respecting the €7,500 ceiling for exempt overtime;
Applying the 1.75% allowance beyond 4 PASS;
Confusing the taxable net with the net social amount.

FAQ: the taxable net in payroll

The net social amount (MNS) serves as the reference for social benefits (RSA, activity bonus), while the taxable net serves as the basis for calculating income tax. The two amounts differ mainly in the treatment of non-deductible CSG, CRDS and certain remuneration elements. The MNS does not add back the same items as the taxable net.

Does the deductible CSG reduce the taxable net?

Yes. The deductible CSG (6.80%) is subtracted from gross salary in calculating the taxable net. By contrast, the non-deductible CSG (2.40%) and the CRDS (0.50%) are not deducted and therefore increase the taxable net relative to the net pay.

How should exempt overtime be treated in the taxable net?

The net pay for overtime is deducted from the taxable net up to a limit of €7,500 net per year. The employer must keep a running annual total to ensure compliance with this ceiling. Beyond that, overtime becomes taxable again.

Yes. The employer’s contribution to funding mandatory health insurance (and provident cover, where applicable) constitutes a taxable benefit. It must be added back into the employee’s taxable net, even if it is exempt from social security contributions within certain limits.

How can the taxable net on the payslip be verified?

You can reconstruct the taxable net by starting from gross salary, subtracting the deductible employee contributions (including deductible CSG), then adding the non-deductible CSG, the CRDS and the employer PSC share. Compare the result with the “taxable net” or “cumulative taxable net” line on the payslip. If there is a discrepancy, check the treatment of exempt overtime and benefits in kind.