The exceptional contribution on high incomes (CEHR) is an additional contribution to income tax, in principle due by households whose reference tax income exceeds certain thresholds. Where the thresholds are exceeded because of exceptional income, for example the sale of a business or a large capital gain, a “quotient” mechanism makes it possible, under conditions, to smooth the amount.
This article presents the scale, the smoothing mechanism step by step, worked examples and specific situations (change in family situation, non-residents, interaction with the differential contribution on high incomes). Each situation deserves to be analysed, ideally with a lawyer.
In brief
- The CEHR is in principle calculated on the household’s reference tax income, without the family quotient.
- Its rate is 3% between €250,000 and €500,000 for a single person (€500,000 and €1,000,000 for a couple taxed jointly), then 4% above.
- Where the thresholds are exceeded because of exceptional income, a quotient mechanism may reduce the contribution, under three conditions relating to the two previous years.
- It also applies, in principle, to non-residents on the French-source income included in their reference tax income, subject to treaties.
- For French tax residents, it comes, where applicable, on top of the differential contribution on high incomes (CDHR), applicable since 2025 income.
Contents
The CEHR scale
The CEHR applies to the portion of reference tax income above the following thresholds:
| Household situation | 3% rate | 4% rate |
|---|---|---|
| Single person (unmarried, widowed, separated or divorced) | From €250,000 to €500,000 | Above €500,000 |
| Couple taxed jointly (married or in a PACS) | From €500,000 to €1,000,000 | Above €1,000,000 |
As a general rule, the reference tax income taken into account includes in particular certain exempt income and income subject to a final withholding tax, such as gains taxed under the flat tax. Depending on the case, it may thus include gains derived from shares received under RSUs or stock options (acquisition or exercise gain, capital gain on sale), or the share of remuneration exempt under the impatriate regime, which is taken into account in calculating the reference tax income. The quotient provided for income tax in the case of exceptional income does not, in principle, apply: the CEHR has its own smoothing mechanism.
The smoothing mechanism (quotient)
Smoothing in principle applies where the following three conditions are met:
- the reference tax income for the year is at least 1.5 times the average reference tax income of the two previous years;
- the reference tax income for each of the two previous years did not exceed the threshold (€250,000 for a single person, €500,000 for a couple);
- the taxpayer was liable to income tax in France, for each of those two years, on more than half of their worldwide reference tax income.
The calculation is then made in a few steps:
| Step | Calculation |
|---|---|
| 1. Average of the two previous years (M) | (income of year N−1 + income of year N−2) ÷ 2 |
| 2. Excess (E) | Income for the year − M |
| 3. Smoothed base (B) | M + E ÷ 2 |
| 4. Contribution calculated on the smoothed base | CEHR scale applied to B |
| 5. CEHR due | Contribution from step 4 × 2 |
Worked examples
The following examples compare, where possible, the smoothed contribution and the contribution calculated without smoothing.
Example A: a couple with exceptional income
A couple taxed jointly declares reference tax income of €4,000,000 in year N, after €450,000 in N−1 and €350,000 in N−2. The three conditions are assumed to be met (€4,000,000 exceeds 1.5 × €400,000, and each of the two previous years is below €500,000).
| Item | Calculation | Amount |
|---|---|---|
| Average M | (€450,000 + €350,000) ÷ 2 | €400,000 |
| Smoothed base B | €400,000 + (€4,000,000 − €400,000) ÷ 2 | €2,200,000 |
| Contribution on B | 3% × €500,000 + 4% × €1,200,000 | €63,000 |
| Smoothed CEHR | €63,000 × 2 | €126,000 |
| For comparison: CEHR without smoothing | 3% × €500,000 + 4% × €3,000,000 | €135,000 |
Example B: a single person, smoothing applicable
A single person declares €3,200,000 in year N, after €180,000 in N−1 and €220,000 in N−2. The three conditions are assumed to be met.
| Item | Calculation | Amount |
|---|---|---|
| Average M | (€180,000 + €220,000) ÷ 2 | €200,000 |
| Smoothed base B | €200,000 + (€3,200,000 − €200,000) ÷ 2 | €1,700,000 |
| Contribution on B | 3% × €250,000 + 4% × €1,200,000 | €55,500 |
| Smoothed CEHR | €55,500 × 2 | €111,000 |
| For comparison: CEHR without smoothing | 3% × €250,000 + 4% × €2,700,000 | €115,500 |
Example C: a single person, smoothing not possible
A single person declares €3,000,000 in year N, after €260,000 in N−1 and €245,000 in N−2. Income for N−1 exceeds the €250,000 threshold: the second condition is not met and smoothing does not, in principle, apply.
| Item | Calculation | Amount |
|---|---|---|
| Band from €250,000 to €500,000 | 3% × €250,000 | €7,500 |
| Band above €500,000 | 4% × €2,500,000 | €100,000 |
| CEHR due | €7,500 + €100,000 | €107,500 |
Changes in family situation
The thresholds and the base depend on the composition of the household, which calls for care when the situation changes:
- in the year of marriage or PACS without opting for separate taxation, the base is in principle determined from the income of both spouses or partners, with the €500,000 threshold;
- in the year of a separation or divorce, or where separate taxation is opted for, the base is, as a general rule, determined for each person, with the €250,000 threshold;
- in the year of a spouse’s death, the base is in principle calculated for each period, before and after the death, with the corresponding thresholds;
- to access smoothing, income for the reference years may have to be reconstructed in the event of a change in situation; an error may, depending on the case, be corrected through a claim.
Non-residents
The CEHR also applies, in principle, to persons who are not tax-domiciled in France, where their French-source income included in reference tax income exceeds the thresholds, subject to tax treaties. Their reference tax income does not, as a general rule, include foreign-source income excluded from French income tax. Smoothing may, in principle, benefit them if the conditions are met for the reference years. The effects of a departure or arrival during the year are presented in the article on changing tax residence.
CEHR and the differential contribution on high incomes
Since 2025 income, French tax residents whose tax remains below 20% of their income may also owe the differential contribution on high incomes (CDHR), in the calculation of which the CEHR is deducted. For 2025 income, the CEHR taken into account in that calculation is in principle determined without the smoothing mechanism; the 2026 Finance Act (Law no. 2026-103 of 19 February 2026) adjusted this interaction from 2026 income, taking into account only a quarter of the CEHR relating to exceptional income.
The return and supporting documents
The CEHR is calculated by the tax authorities on the basis of the income tax return. Where the condition relating to taxation in France for the two previous years is not met, a specific box (box 8TD of return no. 2042 C) is in principle ticked, and the contribution is then calculated without smoothing. It may be useful to keep the evidence showing that the smoothing conditions are met, in particular for previous years.
The CEHR and its smoothing rely on precise calculations, which depend on several years of income and on the family situation. An analysis with a lawyer, preferably before the year in which exceptional income is received, generally makes it possible to estimate its impact.
FAQ
Who must pay the CEHR?
Households whose reference tax income exceeds €250,000 for a single person or €500,000 for a couple taxed jointly, whether residents or, for their French-source income, non-residents, subject to treaties.
Is smoothing automatic?
It in principle applies where the three conditions are met. The return includes a specific box (box 8TD of return no. 2042 C) to be ticked where the condition relating to taxation in France is not met. Checking the calculation shown on the tax assessment may be useful.
Does the CEHR take the family quotient into account?
In principle, no: it is calculated on the household’s reference tax income, without the family quotient, with thresholds that depend only on whether the taxpayer is a single person or a couple.
Can a non-resident owe the CEHR?
Yes, in principle, where their French-source income included in reference tax income exceeds the thresholds, subject to tax treaties.
What is the difference from the CDHR?
The CEHR is an additional contribution of 3% or 4% on the portion of income above the thresholds. The CDHR, applicable since 2025 income to residents only, aims at a minimum tax of 20%; the CEHR is deducted in its calculation.
