Are French pension contributions deductible from income tax?

Compulsory social security pension contributions paid by employees and self-employed workers are generally deducted before calculating taxable income, so they reduce your tax base automatically. You do not need to claim them separately; they are reflected in the net taxable salary shown on your payslip and pre-filled on your tax return.

Voluntary contributions to a Plan d'Epargne Retraite (PER), introduced in 2019, are deductible from taxable income. For employees, the annual deduction ceiling is 10% of net professional income, capped at 8 times the annual social security ceiling (Plafond Annuel de la Sécurité Sociale, or PASS), which gives a maximum deduction of approximately €35,194 for 2024. Unused deduction capacity from the previous three years can also be carried forward.

For self-employed workers (TNS), the ceiling is more generous: 10% of taxable profit plus an additional 15% on profit between 1 and 8 PASS.

At retirement, PER withdrawals are taxed. If contributions were deducted, the capital portion is taxed as ordinary income and the gains portion as capital gains at the flat 30% PFU. Choosing not to deduct contributions allows for more favourable tax treatment on withdrawal.