What changes will result from indexing the income tax brackets to inflation?

Bruno Le Maire, Minister of the Economy, announced that the income tax brackets would be indexed to inflation and that the tax brackets would be raised by 4.8 percent. 

These changes are expected to have a significant impact on the amount you’ll pay to the government. If, like 35 million households, you filed your tax return in the spring of 2023, here are the tax brackets in effect at that time:
 

• Up to 10,777 euros: 0%;
• From 10,778 euros to 27,478 euros: 11%;
• From 27,479 euros to 78,570 euros: 30%;
• From 78,571 euros to 168,994 euros: 41%;
• Over 168,994 euros: 45%.
 

However, starting next year, these tax brackets will increase. This change means that taxpayers whose incomes have risen more slowly than inflation will see their tax bills decrease. Although the Directorate General of Public Finance (DGFiP) has not yet announced the new brackets, a 4.8% increase yields the following rates:
 

• Up to 11,294 euros: 0%;
• From 11,295 euros to 28,797 euros: 11%;
• From 28,798 euros to 82,341 euros: 30%;
• From 82,342 euros to 177,106 euros: 41%;
• Over 177,106 euros: 45%.
 

To illustrate these changes, let’s look at a few examples. Taxpayers reporting less than 11,294 euros per member of the tax household in 2024 will be exempt from income tax. Take, for example, a single person whose income will rise from 30,000 euros in 2023 to 31,000 euros in 2024: their gross tax, which was 2,593.71 euros, will decrease to 2,585.82 euros under the new tax schedule. This represents a reduction of about 8 euros, even with a 1,000-euro salary increase over the course of a year.
 

For a married or civil union couple with two children reporting an annual income of 50,000 euros in 2023 and 53,000 euros in 2024, the gross tax—which was 1,943.37 euros this year—will increase to 2,102.65 euros. This represents an increase of 159.28 euros despite a 3,000-euro raise.
 

It should be noted that this adjustment to the tax brackets—which the government is highlighting—is virtually automatic and depends on inflation. It is intended to offset the effects of inflation on household tax burdens, a measure that was already implemented in 2022 (+5.4%) and 2021 (+1.4%). It is highly likely that it will also be applied next year for the 2025 tax year if inflation continues to rise.