Withholding tax and first job: what rate is applied?

Since the tax department does not know your real situation, your employer applies a non-personalized rate corresponding to the only remuneration it pays you.

This neutral rate is that applicable to a single person without children. It does not take into account your family quotient or other income or expenses.

How do you calculate your tax rate based on the progressive income tax schedule?

Tax scale The income tax benefit is progressive: your taxable income is divided into different brackets, each with a different tax rate.

The determination of the average tax rate is therefore the result of the relationship between:

• the amount of income tax due (scale, proportional rate, flat-rate non-final withholding tax on interest and dividends and final withholding taxes, after deduction of tax reductions and credits);
• and the amount of income taxable at the progressive rate, plus income taxed at a proportional rate, movable capital income subject to a final withholding tax, less the deficits chargeable for the year and previous years, deductible CSG, alimony paid and retirement savings contributions deducted.

Example of a single person with an annual taxable net income of €42,000 in part:

• Up to €10,084, the rate applied shall be 0%
• Then from €10,084 to €25,710, the rate applied shall be 11% on €15,626 = €1,719
• Then from €25,710 to €42,000, the rate applied shall be 30% on €16,290 = €4,887
• Under the 2020 income tax schedule, the tax is €1,719 + €4,887 = €6,606
• The average tax rate (i.e. the share of the tax in relation to the taxable income shown on the tax notice) is (€6,606 : €42,000) x 100 = 15.73%. This rate is the neutral rate that will be applied for such revenues.

You have expenses or other income: how to change your rate?

If you want your rate to change, you can ask your tax department to create a custom rate for your actual situation using the form no 2043 for application for tax number and personalized withholding tax rate.

You will indicate your family situation, the start date of your activity, the amount of your income for the current year or an estimate of these for the following year, the amount of certain expenses etc. These elements will allow the administration to assign you a tax number and calculate the personalized withholding tax rate that will be applied to your salary income. If you are married or have passed away, you can also opt for an individualized rate in case of a difference in income in your couple.

You will send this form to your tax center, accompanied by a copy of an identity document and, if applicable, a proof of social security.