Tax-exempt overtime removed from reference taxable income, below a threshold set by decree
Additional article adopted by the National Assembly at first reading. In article 1417 IV 1° c of the General Tax Code, the reference to article 81 quater would be deleted: overtime pay exempt from income tax would no longer be added to reference taxable income (RFR), up to an RFR threshold set by decree. Applies from the taxation of 2025 income. Lost revenue for local authorities is offset by an increase in the general operating grant (DGF).
Measure originators
No official estimate found for this measure.
Measure impact
Affects employees working tax-exempt overtime, below an RFR ceiling to be set by decree: their RFR would be lower, which can preserve access to means-tested schemes listed in the explanatory statement (school grants, LEP savings account, energy renovation aid, clean mobility aid, school canteen or nursery fees).
Official references
Sources
Stated positions
Public statements by members of Parliament on this measure · 3 statements
« On voit bien que le dispositif proposé présente le risque d’une réduction des recettes de l’État. C’est pourquoi j’y suis opposé. »
Translation: It is clear that the proposed scheme risks reducing State revenue. That is why I am opposed to it.
16 October 2026Parliamentary debate · assemblee-nationale.fr« Au bout du compte, cette augmentation les fait basculer dans une autre tranche, ce qui les prive de certaines bourses ou d’aides […]. En sortant les heures supplémentaires du revenu fiscal de référence, on rendra le travail utile, on incitera davantage au travail. »
Translation: In the end, this increase pushes them into another bracket, depriving them of certain grants or aid […]. By taking overtime out of the reference taxable income, we will make work pay and further encourage work.
16 October 2026Parliamentary debate · assemblee-nationale.fr« Depuis le début de la discussion budgétaire, je remarque comme une ambiance d’autocongratulation à la droite de cet hémicycle, dont témoigne le présent amendement, qui vise à renforcer à nouveau le dispositif de défiscalisation des heures supplémentaires, sans prendre acte de son échec total. »
Translation: Since the start of the budget debate, I have noticed a mood of self-congratulation on the right of this chamber, as shown by this amendment, which seeks once again to strengthen the overtime tax-exemption scheme without acknowledging its total failure.
16 October 2026Parliamentary debate · assemblee-nationale.fr
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Procedure timeline
Follow the progress of this fiscal measure through the different stages of the parliamentary procedure.
Debate and vote
Débat et vote en séance publique à l'Assemblée nationale, ou engagement de la responsabilité du Gouvernement (article 49.3)
Debate and vote
Débat et vote en séance publique à l'Assemblée nationale, ou engagement de la responsabilité du Gouvernement (article 49.3)
Council of Ministers
Validation interne