Healthcare in France: PUMa Tax

Healthcare in France: What is the PUMa tax, and does it apply to you?

It’s no secret that France has an excellent health care system-- most expats consider it to be one of the benefits of living in the country. The system is paid for through social charges on the earnings of everyone who lives here. And for some residents, this comes in the form of the so-called PUMa tax. The PUMa acronym refers to France’s public health system, Protection Universelle Maladie. But the tax is more formally known as the cotisation subsidaire maladie (CSM). It is also sometimes referred to informally as the taxe des rentiers. This article explains what it is, how it’s calculated and who pays it.

Working, studying or retired in France

Most French citizens and many expats automatically join the French health system because they are working or enrolled in school or university. Whether you are self-employed or working for a multi-national in France, part of your paycheck will go to CSG-CRDS social charges. The same is true if you are receiving a French pension.

You are also participating, albeit unconsciously, if you are a non-French EU citizen or a British citizen who is still covered by your home nation’s social protection system. Those countries have a reimbursement arrangement that means you likely be exempt from CSG or CRDS payments and still be able to access the French public health care system.

If you aren’t paying into the public health care system in any country and you are not a student, a retiree, or receiving other benefits, you are still expected to use the French health care system. And not using it won’t exempt you from the social charges! But the French state needs a way to ensure that everyone who does have means is contributing to keep the system strong and accessible to all. And that is where the PUMa tax comes in.

Who pays?

The PUMa tax is paid by French citizens and foreigners alike who are not contributing a minimum amount to the public health care system through wages but do have investment income above a given threshold. In practice, this most often means people who are employed (often self-employed) but not earning enough to meet the minimum. It can also include small business owners who have chosen to take most of their profits as dividends, rather than salary or wages.

The minimum threshold to avoid falling into this category is 20% of the PASS (PASS = plafond de sécurité social or “social security ceiling”), a number that goes up every year with inflation. For 2025, the PASS is 47,100 €, which means that you could be subject to PUMa taxes if you declare net earnings under 9,420 € per year.

Even if your earnings are under the 20% PASS threshold, you still might not have to pay the PUMa tax. It depends on how whether you are declaring investment income, from anywhere in the world, of more than 50% of the PASS. For 2025, that comes to about 23,550 EUR.

It’s worth noting here that retirement income will exempt you from the PUMa tax, as will your spouse’s earnings that are over the 20% PASS threshold. In other words, if one spouse has sufficient earnings, that exempts the other.

How much?

The PUMa tax applies to your income from investments (including dividends, capital gains, interest and some rents) that is over the 50% threshold. The tax only applies to investment income of up to 376,800 € (8 X PASS). The tax rate is 6.5%, but it is not simply applied. Instead, the tax authorities will take your income over the 50% threshold and multiply that by a proportion based on the income you did earn (after all, you contributed something through those earnings).

The official formula is:

Tax = 6.5% x (A-0,5 x PASS) x (1-R / (0,2 x PASS))

Where A is the amount of your investment income (up to the ceiling) and R is your earned income.

If you are not keen on math, here are some examples:

Your household reports no wage or retirement income in France, but you report 400,000€ of investment and non-professional rental income. The second part of the formula, which would give you a break for having some earned income, will be “1”. Your tax bill will be 6.5% of the amount of your income between the 50% threshold and the ceiling: 376,800€ – 9,420€, or 367,380€. This gives you a total tax bill of about 23,880€.

On the other hand, someone who has earnings of 8,000€ and 400,000€ of investment income will be able to multiply that 8,000€ by the 20% threshold to get a proportion of their investment income discounted, about 85%, in fact. As a result, this earner’s bill would be about 3,600€.

The American exception

Theoretically, American retirees in France should be paying PUMa tax. No reimbursement arrangement is possible between the two countries because the US does not have full public health system. But to date the French tax authorities have included American retirees who are reporting income from US retirement accounts, pension or social security among the other retirees. As a result, those taxpayers have not been asked to pay PUMa.