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Summary
Monaco is famous for having no personal income tax for its residents. The principality has not levied income tax since 1869, making it one of the most tax-friendly jurisdictions in the world. However, employees working in Monaco are still subject to compulsory social security contributions covering pensions, unemployment insurance, and supplementary retirement benefits. These contributions are the only deductions from gross salary.
How it works
Your take-home pay is your gross salary minus social security contributions only:
- Income tax - none. Monaco does not levy personal income tax on residents or employees
- Social security contributions - three employee components totalling approximately 12.85% of gross salary
French nationals residing in France but working in Monaco are subject to French income tax under a bilateral agreement. The zero-tax benefit applies to Monegasque nationals and non-French residents.
Income Tax Rate (2025)
| Taxable income | Rate |
|---|---|
| All income | 0% |
Monaco levies no personal income tax on individuals. There are no bands, thresholds, or allowances because the tax simply does not exist.
Social Security Contributions
Employee social security contributions have three components:
| Component | Employee rate |
|---|---|
| CAR (Caisse Autonome des Retraites - pension) | 6.55% |
| ASSEDIC (unemployment insurance) | 2.40% |
| AMSF (supplementary pension) | 3.90% |
| Total employee rate | 12.85% |
These rates apply to the employee’s gross salary. The employer also contributes separately (approximately 25-28% of gross) which is not deducted from the employee’s pay. Contributions are subject to ceiling amounts that are adjusted periodically.
The formula
Where
Worked example
EUR 60,000 gross annual salary
CAR pension (6.55% of gross)
= EUR 3,930
ASSEDIC unemployment (2.40% of gross)
= EUR 1,440
AMSF supplementary pension (3.90% of gross)
= EUR 2,340
Total social security
= EUR 7,710
Income tax
= EUR 0
Total deductions
= EUR 7,710
Result
Take-home pay = EUR 60,000 - EUR 7,710 = EUR 52,290/year (EUR 4,357.50/month)
Assumptions & limitations
- Assumes the employee is a Monaco resident or non-French foreign resident - French nationals living in France but working in Monaco are subject to French income tax
- Does not model employer social security contributions (approximately 25-28% of gross, but not deducted from the employee’s salary)
- Social security contribution ceilings are not modelled - very high earners may have contributions capped at certain thresholds
- Does not account for any voluntary supplementary pension contributions
- Assumes salaried employment - self-employed workers and liberal professions have different contribution structures
- Monaco levies no capital gains tax, wealth tax, or local income taxes on individuals