The compromise is made. After weeks of negotiations, the government adopted the 2026 budget by 49-3 on February 2. On the menu: a indexation of the income tax scale to inflation. Concretely, all tax brackets are slightly revalued by 0.9%. A mini-victory for taxpayers, who escape the freeze initially planned by the government, especially for retirees: the removal of the 10% reduction had been mentioned… but was ultimately not voted on.
In the end, how much will you really save? Let’s break down the figures with this indexing:
- Tranche 1 (0%): up to €11,600 (previously €11,497)
- Tranche 2 (11%): between €11,601 and €29,579 (previously €29,315)
- Tranche 3 (30%): between €29,580 and €84,577 (previously €83,823)
- Tranche 4 (41%): between €84,578 and €181,917 (previously €180,294)
- Tranche 5 (45%): more than €181,917 (previously €180,294)
How much will you pay in taxes?
Concretely, with this revaluation, the income threshold not to be exceeded to escape tax has mechanically evolved. For a single person, it will now not be necessary to earn more than €1,662.50 net per montheither €19,950 per year. If you are just below, you remain tax-free; thus, the new minimum wage, increased by 1.18%, or €1,443.11 net, remains far from this amount. If you are just above this €1,662, the bill will be lighter than in 2025.
Let’s take the example of a winning single €35,000 net taxable per year: it will save approximately €61 tax over the year with this indexing. Not enough to revolutionize your purchasing power, certainly. But it’s still a catch, especially when we know that the government initially wanted to freeze the scale. This freeze would have brought 200,000 additional households into tax and brought 2 billion euros to the State.
The other side of the coin: blocked aid and increase in the CSG
But here’s the rub. If your tax will drop (a little), your social benefitsThey don’t move one iota. The government decided to freeze all social assistance in 2026. RSA, family allowances, APL, activity bonus, AAH… All remain frozen at their 2025 level, without revaluation on April 1st as is usually the case.
Direct consequence: with a inflation which is around 1.5 to 2%the purchasing power of beneficiaries declines mechanically.
And that’s not all: if you contribute to a Retirement Savings Plan (PER) to reduce taxes, you risk losing out. Because since January 1, 2026, all PERs have been hit by a increase in social security contributions. The CSG on capital income rises by 9.2% to 10.6%bringing total social security contributions from 17.2% to 18.6% on your PER earnings upon exit – at the time of retirement.
