Per And Tax Exemption: How To Reduce Your Taxes In 2026?

Reducing taxes while preparing for retirement is a promise that is quite appealing. The Retirement Savings Plan (better known by its acronym, PER) is one of the few investments that combines both. And the good news is that the finance law for 2026 has just revised its rules, generally in a positive way for the vast majority of savers. But how does this tax exemption actually work? How much can one expect to save? And what exactly is changing this year? We offer you an overview, backed by figures.

The PER, how does it really reduce your tax?

Let's start with the principle, as it is often misunderstood. The PER does not provide you with a direct tax reduction, as a donation to a charity or hiring a home help would. It works upstream, on your taxable income.

In practice, the amounts you voluntarily contribute to your plan can be deducted from your declared income if you choose to do so. Your taxable base decreases, and your tax follows suit. This is known as the entry deduction. The more you contribute (within certain limits that we will discuss), the more you lower your taxable income.

It is also very easy today to reduce taxes with the PER directly online, which partly explains the enthusiasm for this product in recent years.

A quick reminder for those who are new to the topic. The PER was established by the PACTE law of May 22, 2019, and has been marketed since October 1, 2019. It aims to gradually replace older schemes, such as the PERP or Madelin contract. To understand its main principles, we refer you to our article that explains the PER in 6 questions.

How much can you deduct from your income in 2026?

The deduction is not without limits, as you might suspect. Each year, you can deduct your contributions up to 10% of your professional income from the previous year. This limit is itself framed by two thresholds.

For contributions made in 2026, the floor is set at 4,710 euros and the ceiling at 37,680 euros. In other words, even with modest income, you are entitled to a minimum deduction of 4,710 euros. And the wealthiest taxpayers cannot exceed a deduction of 37,680 euros for the year.

An example to clarify: an employee declaring 50,000 euros in income can deduct up to 5,000 euros. If he contributes this amount to his retirement savings plan (PER), his taxable income drops to 45,000 euros. The tax savings will depend on his tax bracket (we'll get to that shortly).
Haven't maximized your savings in recent years? Nothing is lost. Unused ceilings can be carried forward, and this is precisely where 2026 brings new changes.

Note: your personalized ceiling is clearly indicated on your tax notice under the section "Retirement savings ceiling." No need to pull out the calculator to find it.

The higher your tax bracket, the more you save.

Here we are, this is the heart of the strategy. The amount saved directly depends on your marginal tax rate, the MTR, in other words, the rate that applies to the last portion of your income.

The rule can be summed up in one sentence: your tax gain corresponds to the amount paid multiplied by your MTR. Let's take a payment of 5,000 euros and observe the result according to the tax brackets:

• 11% bracket: 550 euros less in tax
• 30% bracket: 1,500 euros saved
• 41% bracket: 2,050 euros saved
• 45% bracket: 2,250 euros saved

It's easy to understand why the PER primarily attracts heavily taxed taxpayers. For others, the interest is much more debatable. And they are numerous, as nearly 8 out of 10 tax households fall within the 0 or 11% brackets. Below the 30% bracket, the game is not always worth the candle.

Even better, in certain situations, a well-calibrated payment allows you to drop below the threshold of a bracket. A taxpayer at the very top of the 41% bracket can, by lowering their taxable income, shift part of their income into the 30% bracket. The windfall effect is then at its maximum.

Another advantage, and not the least, is that the PER is exempt from the overall cap on tax niches, set at 10,000 euros per year. You can therefore add it to other tax reduction schemes without ever hitting this ceiling. This makes it a somewhat unique tool in the French tax landscape.

What changes with the finance law for 2026

The year 2026 marks a real turning point for the retirement savings plan. Three measures, in particular, deserve attention:

• The deferral of limits extends from 3 to 5 years. If you haven't used your deduction limits, you can now catch up over five years instead of three. This is a real breath of fresh air for irregular incomes, freelancers, and those with variable bonuses at the forefront.
• The deduction disappears after 70 years old. Since January 1, 2026, contributions made beyond this age are no longer deductible from income. The legislator's idea is to prevent the PER from becoming a last-minute transmission tool and to refocus it on its primary purpose, which is to prepare for retirement.
• Social contributions increase. Their overall rate rises from 17.2% to 18.6% on gains. A direct consequence is that the "flat tax" applied to capital gains at the time of withdrawal increases from 30% to 31.4%.

For most workers under 70, the balance remains favorable, as the extension of the deferral more than compensates for the slight increase in social contributions. The detailed new rules can be consulted on the website service-public.gouv.fr.

Should we always opt for deduction?

Here’s a question that too few savers ask themselves, and that’s a shame. Because the deduction at entry has a counterpart: the amounts deducted will be taxed upon exit, on the day you withdraw your capital or your annuity.

The winning logic? Deduct when you are heavily taxed today, then unlock your savings at retirement, at a time when income (and the corresponding marginal tax rate) has often decreased. It is precisely the difference between these two rates that constitutes your true gain.

Conversely, if you are lightly taxed or even non-taxable, forgoing the deduction may prove to be smarter. You will then benefit from a more favorable tax situation at the time of withdrawal. The PER allows each individual to make this choice, and that is undoubtedly what makes it such a flexible investment. At retirement, you can also withdraw your savings in capital (in a lump sum or in installments) or in the form of an annuity, depending on what best suits your plans. Before you start, the official simulator available at impots.gouv.fr will give you a first numerical estimate of your situation.

Nota Bene: a few benchmarks to avoid getting lost. The marginal tax rate (TMI) is the rate applied to the highest bracket of your income, and it measures the real benefit of a deduction. The annual ceiling of Social Security (PASS), set at 48,060 euros in 2026, serves as the basis for calculating the deduction limits of the PER. Finally, keep in mind that the deduction is not a definitive gift but rather a deferral of taxation, with the tax simply postponed in time, towards the exit of the plan.