Newsletter June 2026

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Minimum Wage Increase Effective June 1, 2026: Employers Must Adjust Payroll

As of June 1st, 2026, the gross hourly minimum wage has been increased to €12.31, up from €12.02 previously.

This change has a significant impact on full-time employees, as their monthly salaries will now amount to €1,867.02.

This increase will apply to all pay stubs for June 2026, regardless of the contract start date. In practice, this increase particularly affects part-time employees, apprentices, and employees whose pay is calculated as a percentage of the minimum wage.

Flat tax at 31.4%: dividends and financial income under scrutiny

As of January 1, 2026, the single flat-rate withholding tax, more commonly known as the flat tax, has increased from 30% to 31.4%. This increase is due to the rise in social security contributions, which have gone from 17.2% to 18.6%. However, the portion corresponding to income tax remains fixed at 12.8%.

The flat rate (PFU) applies in particular to capital income, such as dividends, interest, investment income, and certain capital gains on securities. Executives, partners, and investors receiving this type of income are therefore directly affected by this change.

For example, a €10,000 dividend subject to the PFU now results in a total tax liability of €3,140, compared to €3,000 previously. The increase therefore represents an additional tax cost of €140 for every €10,000 in financial income received.

This increase should be taken into account when business leaders weigh the pros and cons of choosing between compensation and dividends. Indeed, paying dividends may still be advantageous, even though their tax cost must be compared with that of traditional compensation, which remains subject to social security contributions and income tax.

However, taxpayers retain the option to choose taxation under the progressive income tax scale. This option is particularly advantageous when the household’s tax burden is low or when applying the 40% dividend allowance reduces the taxable base.

Consequently, the increase in the flat tax rate does not necessarily undermine the appeal of dividends or investment income. It does, however, require executives, partners, and investors to update their tax simulations in order to choose the tax regime best suited to their situation.

Crypto-assets: Increased Tax Scrutiny

The tax authorities are paying particular attention to crypto-assets. Indeed, individuals who buy or sell crypto-assets such as Bitcoins are increasingly subject to scrutiny by the relevant agencies.

As a result, individuals must be particularly careful when filing their tax returns.  Specifically, when they make occasional sales of crypto-assets, they must report any capital gains or losses realized in Schedule No. 2086, attached to the main tax return.

In practice, when the total value of sales made by the tax household exceeds €305 over the course of the year, the gains become taxable.

It is also important to be vigilant regarding crypto-asset accounts opened abroad. When a taxpayer holds, uses, or closes an account on a foreign platform, this must be reported using Form No. 3916-3916 bis. Failure to report may result in specific penalties.

For affected taxpayers, it is therefore essential to keep a record of transactions, proof of purchase and sale, and statements from the platforms used. Incorrect identification of taxable transactions or failure to report them can create a significant tax risk. Crypto-assets must therefore be closely monitored, just like other components of financial assets.

Fuel: New Assistance in Response to Rising Prices 

Rising fuel prices remain a major concern for both individuals and businesses. To mitigate the effects of this increase, the government has implemented various support measures. The goal is twofold: to assist both employees who use their vehicles for work and the businesses most affected by rising costs.

The key measure concerns the fuel allowance paid by the employer. The cap, previously set at €300, has been raised to €600 per year per employee. It should be noted that this allowance is tax-free and exempt from social security contributions.

Furthermore, the process for paying this allowance has been simplified: no specific documentation is required, and there are no conditions tied to the employee’s place of residence or the availability of public transportation. All employees who use their cars to commute to work may therefore be eligible.

However, it is essential to note that this allowance remains optional. In fact, the employer is not required to pay it.

For so-called “high-mileage” workers, a €100 subsidy is available. This applies to individuals who use their vehicle extensively to commute to work, subject to income and distance traveled requirements. The application must be submitted directly online at impots.gouv.fr.

CFE: Not Having a Business Does Not Exempt You from Tax

The business property tax, known as the CFE, is a local tax owed by businesses engaged in self-employed professional activities in France. This tax applies to traditional companies, sole proprietors, as well as certain entities without legal personality.

A business or entity described as “without legal personality” implies that it has no legal existence, unlike a traditional registered company. However, it may be subject to the CFE if it regularly carries out a professional activity.

Among entities without legal personality are de facto partnerships, joint ventures, certain groups, and entities conducting business without having their own legal personality. For example, two individuals jointly operating a commercial business without having formed a company may be subject to this tax. Similarly, a joint venture used to conduct a joint business activity may be liable for the CFE.

If a business is subject to the CFE, it will be assessed in the name of the manager(s). When the entity is not a corporation, the CFE may be owed by the legal entity to which it is subordinate.

This rule is important because the absence of legal personality does not automatically exempt a business from the CFE. What matters above all is the existence of a professional activity, carried out on a regular basis, on a self-employed basis, and located in France.