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Overtime or additional hours worked by an employee are exempt from income tax up to 7,500 euros per year. Their amount, pre-filled in the tax return, must be corrected if it is inaccurate.
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“Work more to earn more.” Emmanuel Macron not only adopted Nicolas Sarkozy’s old campaign slogan, he also reintroduced in 2019 a measure taken by his predecessor at the Elysée: the tax exemption for overtime. A measure hastily decided to calm the anger of employees following the Yellow Vest movement in the fall of 2018. Thus, in 2023, remuneration for overtime and additional hours (generally carried out within the framework of employment part time) “are exempt from income tax up to 7,500 euros for each employee (8,037 euros of gross remuneration per employee, Editor’s note)”, indicates the General Directorate of Public Finances (DGFiP). Originally, this ceiling for tax-exempt overtime hours amounted to 5,000 euros per year, before being increased to 7,500 euros by the deputies in the finance law for 2022.
As a reminder, overtime is “hours of work carried out beyond the legal working hours set at 35 hours per week (or the duration considered equivalent in certain professions, by sector agreement or by decree), at the request of the employer or with his agreement”specifies Bercy. For part-time employees, hours worked beyond legal working time are called “additional hours”.
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Amount pre-filled in the tax return
The amount of overtime paid to employees is pre-filled in the tax return, in the section “Salaries, salaries” at the line “Exempt overtime and RTT days”. It is registered in cells 1GH to 1JH. If the figure is not correct, the tax authorities will ask you to correct it. Concretely, the amount pre-filled in your 2024 tax return corresponds to all overtime or additional hours worked between January 1 and December 31, 2023.
Some employees may have multiple employers and are accustomed to working overtime. In this case, Bercy recalls that “the ceiling of 7,500 euros can be exceeded in total without it being exceeded for each employer”. A multi-employee employee therefore does not benefit from a boosted tax advantage. In his situation, “the fraction of the annual remuneration received for overtime which exceeds 7,500 euros will be automatically added to the amount of taxable salary”details the tax administration.
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Last point, the amount of wages paid for overtime or additional hours is taken into account for the calculation of the reference tax income (RFR). An amount which takes into account all income declared to the tax authorities, whether taxable or not. This indicator, which appears in particular on the first page of the tax notice, is used by social organizations to determine whether a household is entitled to certain social benefits (request for HLM housing, APL, etc.).
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