When you become a legal resident of France, you become eligible for state healthcare. If you work in France either salaried or employed, then you’ll pay a contribution towards healthcare via social security contributions. But if you don’t have an income in France, then you may be required to pay a PUMA healthcare tax in France. We asked Amy Witherbee, a financial expert who works with expats in France as well as French nationals looking to relocate to France – what is the PUMa tax, and who does it apply to?
The French healthcare system
France has an excellent health care system, and most expats consider it to be one of the benefits of living here. The system is funded through social charges on the earnings of everyone who works here via social security contributions deducted from income but for some residents, the contribution is made via the so-called PUMa tax. PUMa stands for 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.
Working, studying or retired in France
Most French citizens and many expats automatically join the French health system through working whether salaried or self-employed, receiving a French pension, or by being enrolled in school or university. Some expats are enrolled in the state care system if they fall outside of these criteria because their home nation’s social protection system covers them e.g., the UK. 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 contribute to the French health care system. Not using it doesn’t exempt you from the social charges! The French state expects that all those with means should contribute to keep the system strong and accessible to all. And that is where the PUMa tax comes in.
Who is required to pay the PUMa healthcare tax in France?
The main group who are eligible to pay PUMA tax are early retirees with ‘capital’ income (e.g., from investments for example from renting out a property, income from shares) over a given threshold. Retirement pensions, which you declare in your French income tax declaration are not included.
PUMa tax eligibility also applies to those who are employed (often self-employed) but not earning enough to meet the minimum but have large investment incomes. It can also include small business owners who have chosen to take most of their profits as dividends, rather than salary or wages.
The threshold is calculated each year and called the PASS (plafond de sécurité social or “social security ceiling”), a number which increases each year with inflation. For 2025, the PASS was set at 47,100 €.
How is the PUMa tax calculated?
The PUMa tax applies to your income from investments (including dividends, capital gains, interest and some rents) – but there is an allowance against the first 50% of PASS (e.g., for 2025 it is 23550 €). And the tax rate is capped at eight times the PASS (e.g., for 2025 it is 376800 €).
The tax rate, after allowances, is 6.5% (2025), however it isn’t simply applied. The tax authorities will consider other factors – and yes, it is complicated. If you’re into math, the official formula is: Tax = 6.5% x (A-0,5 x PASS) x (1-R / (0,2 x PASS)), A being the amount of your investment income (up to the ceiling) and R is your earned income.
If you are not keen on math, here’s an example of how it might work: 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 a 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.
If you’d like advice on how to manage your finances to maximise your income and minimise your taxes, solve finance and tax problems before they arise, get in touch with Amy Witherbee at sanderlingexpat.com
