Every holder of a retirement savings plan has an annual PER contribution ceiling, which sets the limit on payments that can be deducted from taxable income. This ceiling, shown on the tax assessment notice, varies by professional status and can be topped up with unused amounts from the previous three years.
What is the PER contribution ceiling
The PER contribution ceiling is the maximum amount a PER (plan épargne retraite, France’s retirement savings plan) holder can pay in during a calendar year while benefiting from a deduction on taxable income. Beyond that threshold, payments remain possible but lose the upfront tax benefit.
This ceiling is not specific to the PER created by the Pacte law alone: it also applies to older supplementary retirement products still held by some savers, such as the PERP or a Madelin contract for the self-employed, as well as a PERCO where one still exists within a company. All deductible voluntary payments made across these different vehicles during the year draw on the same overall ceiling.
The ceiling amount depends on the holder’s professional situation: it is not calculated the same way for an employee as for a self-employed worker (TNS), the latter benefiting from an increase that accounts for the lack of compulsory supplementary retirement contributions equivalent to an employee’s.
How the PER contribution ceiling is calculated
The calculation is based on the previous year’s professional income, with a guaranteed minimum amount even without high income, so that everyone retains some minimum deductible contribution capacity.
For employees
An employee’s ceiling corresponds to the higher of two amounts: a fraction of net professional income from the previous year, or a flat minimum amount that applies even without significant taxable income. This method guarantees that an employee with modest income still keeps a margin for deductible payments. Before setting a payment amount, the comparison of PER or life insurance to prepare for retirement helps place the PER among the other retirement-dedicated vehicles.
For the self-employed (TNS)
A TNS ceiling is based on the taxable profit of the self-employed activity, with a two-part formula: a share proportional to profit, plus an additional share specific to the self-employed. This increase is meant to offset the lack of certain compulsory supplementary retirement schemes that employees benefit from.
In both cases, contributions already paid into compulsory retirement schemes reduce the ceiling available for voluntary payments into a PER, since those contributions already receive favourable tax treatment elsewhere.
Where to find the ceiling on a tax assessment
The PER contribution ceiling appears directly on the tax assessment notice, in the section dedicated to retirement savings, usually near the household’s taxable income information. The document shows the current year’s ceiling as well as, where applicable, the cumulative unused ceiling from the previous three years.
For a couple taxed jointly, each member has their own ceiling, calculated on their own professional income. Spouses or civil partners can nonetheless choose to pool their respective ceilings, which allows one of them to pay beyond their individual ceiling by using the other’s unused capacity.
A taxpayer who changes status during the year, for example moving from employee to self-employed status, has their ceiling recalculated under the rules applicable to their new situation for the year concerned.
The unused ceiling: a three-year carry-forward
A PER contribution ceiling not used in a given year does not disappear immediately. It remains available and adds to the current year’s ceiling for the following three years, which gives some flexibility to anyone who has not paid into a PER in certain years.
After this three-year period, the unused portion is permanently lost and can no longer be used. A taxpayer who has not made payments for several years therefore has an interest in checking the total actually available on their tax assessment rather than relying on an estimate, since the cumulative amount can represent several years of unused ceiling.
This carry-forward rule explains why a large one-off payment, for example close to retirement or after an unexpected sum of money, remains possible within the cumulative ceiling, without needing to have spread that same amount across several years beforehand.
Strategies to make the most of the ceiling
The benefit of a payment into a PER depends directly on the household’s marginal tax rate at the time of payment. The higher that rate, the larger the tax saving generated by the deduction, for an identical amount paid. The mechanics of the PER tax deduction detail this calculation and its limits more precisely.
Checking the ceiling actually available before any payment avoids exceeding a limit whose excess brings no upfront tax benefit, while still remaining locked until retirement under the same conditions as the rest of the money paid into the plan.
For a household whose income varies from year to year, concentrating payments in the years with the highest marginal rate, by drawing on the cumulative ceiling from the previous three years, maximises the total tax saving without changing the overall amount paid in over time.
Pooling ceilings between spouses or civil partners is also a lever worth considering when one member of the household has a ceiling well above their own payments.
Special cases to know about
A self-employed worker holding an older Madelin contract predating the PER should check that contributions on that older contract do draw on the same overall ceiling as any payments into an individual PER, to avoid an undetected overshoot.
A retiree who still earns income from work, for example under a combined work-and-pension arrangement, continues to generate a PER contribution ceiling on that income, even after their main pension has started.
A dependent child attached to their parents’ tax household does not have their own PER contribution ceiling while still attached, since the whole household is taxed jointly. Their own ceiling starts once they become a separate taxpayer and file their own tax return.
Before choosing between a payment into a PER and another vehicle, it is worth placing that decision within the broader split of one’s savings across the different vehicles available, the PER being only one of the possible building blocks of a wealth strategy.
Frequently asked questions
What does the PER contribution ceiling on a tax assessment mean?
It is the maximum amount a tax household can pay into a retirement savings plan during the year while deducting it from taxable income. It appears on the tax assessment notice under a heading close to “retirement savings ceiling” or “deduction ceiling”, and it differs depending on whether the holder is an employee or self-employed.
How do you actually use your PER contribution ceiling?
Simply pay into a PER, either as a lump sum or through scheduled payments, an amount that does not exceed the ceiling available for the current year, increased where applicable by any unused ceiling from the previous three years. The PER provider applies the deduction on the following year’s income tax return, based on the amount paid.
What is an unused PER contribution ceiling?
It is the portion of the annual ceiling a taxpayer did not use because they did not pay into a PER. This portion is never lost immediately: it stays available for the following three years, which makes it possible to catch up on years without payments with a larger contribution later.
Can an unused ceiling be carried forward to future income?
The carry-forward works the other way round: it is the ceilings from the past three years that add to the current year’s ceiling, not the reverse. A ceiling left unused for more than three years is permanently lost, which is a reason to check the available total regularly rather than waiting until the last year.
How much should you pay into a PER to make the most of the ceiling?
There is no universal amount: the benefit of a payment mainly depends on the household’s marginal tax rate, which determines the real tax saving, and on the ceiling actually available once payments already made during the year are taken into account. A payment that exceeds the available ceiling loses its tax benefit on the excess portion.