Tax policy directorate – Bureau a

5 – Wages, salaries, pensions and annuities 
This category includes: 
• 
Wages, salaries, compensation and emoluments received in consideration of an employment, 
including the remuneration of senior managers of public limited companies (chairman of the 
board, managing directors, deputy managing directors and members of the management 
board) and managers of private limited companies, allowances paid to members of the French 
and European Parliaments, and allowances paid to the holders of local elected offices;
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• 
Pensions and annuities 
The net amount of taxable income in this category is determined by deducting, inter alia, mandatory 
social security contributions and, when the person is in active employment, expenses inherent in the 
function or job from the gross amount paid. 
Unless otherwise provided, gross earned income includes all amounts and benefits in kind available to 
the taxpayer. Professional expenses are normally taken into consideration on a notional basis (a 10% 
deduction, capped and reviewed each year).
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However, taxpayers may opt to deduct the actual amount 
of their professional expenses, subject to the production of vouchers. 
Pensions and annuities without consideration are eligible for a 10% special allowance, though the 
amount for all members of the household may not exceed an amount increased each year in the same 
proportion as the upper limit of the first band of income tax, i.e. €3,715 for the taxation of income earned 
in 2016.
Purchased life annuities (RVTO) are eligible for a notional allowance at a rate which varies from 30% to 
70% according to the recipient’s age (from under 50 to 70 or over) when the annuity becomes payable. 
Under certain conditions and at the beneficiary’s express and irrevocable request, pension benefits paid 
in the form of capital may be subject to a 7.5% flat-rate withholding tax which discharges the income to 
which it applies from income tax. 
All income from the exercise of stock options or the acquisition of bonus shares allocated on or after 28 
September 2012 is taxed on the basis of the ordinary law rules for wages and salaries.
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23
Article 68 of the 2016 Supplementary Budget Act no. 2016-1918 extended this incentive scheme to 31 
December 2017.
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Previously, allowances for local elected officials could be subject to withholding tax. This regime has been 
cancelled, and all allowances paid after 1 January 2017 are automatically taxed under the ordinary rules for wages 
and salaries (Article 10 of the 2017 Budget Act no. 2016-1917 of 29 December 2016). 
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€12,183 for the taxation of income earned in 2016. 
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Article 11 of the 2013 Budget Act no. 2012-1509 of 29 December 1509. 

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22 
Vesting gains on bonus shares allocated by an extraordinary meeting of shareholders between 8 
August 2015 and 30 December 2016 are taxed under the same rules, after applying allowances for the 
length of ownership applicable to transferable securities.
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For bonus shares allocated by an extraordinary meeting of shareholders on or after 31 December 2016, 
only the portion of the vesting gain up to an annual cap of €300,000 is taxed under the progressive 
income tax schedule after applying these allowances.
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The portion of the vesting gain that exceeds this 
annual limit is taxed under the ordinary law rules for wages and salaries.