ManpowerGroup Inc. Income Taxes Disclosure
(5) Income Taxes
The earnings (loss) before income taxes was as follows:
Year Ended December 31 |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
United States |
|
$ |
(4.3 |
) |
|
$ |
10.8 |
|
|
$ |
40.7 |
|
Non-United States |
|
|
97.7 |
|
|
|
246.0 |
|
|
|
165.2 |
|
Total earnings before income taxes |
|
$ |
93.4 |
|
|
$ |
256.8 |
|
|
$ |
205.9 |
|
The provision for income taxes was as follows:
Year Ended December 31 |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Current |
|
|
|
|
|
|
|
|
|
|||
United States |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
31.6 |
|
|
$ |
2.4 |
|
|
$ |
(2.9 |
) |
State |
|
|
3.9 |
|
|
|
0.8 |
|
|
|
7.3 |
|
Non-United States |
|
|
107.0 |
|
|
|
140.9 |
|
|
|
133.3 |
|
Total current |
|
|
142.5 |
|
|
|
144.1 |
|
|
|
137.7 |
|
Deferred |
|
|
|
|
|
|
|
|
|
|||
United States |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
(34.2 |
) |
|
|
(22.6 |
) |
|
|
(8.6 |
) |
State |
|
|
(2.0 |
) |
|
|
2.9 |
|
|
|
(4.0 |
) |
Non-United States |
|
|
0.4 |
|
|
|
(12.7 |
) |
|
|
(8.0 |
) |
Total deferred |
|
|
(35.8 |
) |
|
|
(32.4 |
) |
|
|
(20.6 |
) |
Total provision |
|
$ |
106.7 |
|
|
$ |
111.7 |
|
|
$ |
117.1 |
|
The cash paid, net of refunds, for income taxes was as follows:
Year Ended December 31 |
|
2025 |
|
|
United States |
|
|
|
|
Federal |
|
$ |
32.2 |
|
States |
|
|
1.1 |
|
Non-United States |
|
|
|
|
France |
|
|
50.4 |
|
Italy |
|
|
9.6 |
|
Japan |
|
|
14.7 |
|
Other, net |
|
|
39.7 |
|
Total income taxes paid, net |
|
|
147.7 |
|
A tax reconciliation, between taxes computed at the United States federal statutory rate of 21% and the consolidated effective tax rate for 2025 is as follows:
Year Ended December 31 |
|
2025 |
|
|||||
|
|
Amount |
|
|
Percent |
|
||
Tax provision at the U.S. federal statutory rate |
|
$ |
19.6 |
|
|
|
21.0 |
% |
Foreign tax effects |
|
|
|
|
|
|
||
France |
|
|
|
|
|
|
||
Statutory income tax rate differential |
|
|
4.6 |
|
|
|
4.9 |
% |
Effects of changes in tax legislation(a) |
|
|
10.8 |
|
|
|
11.6 |
% |
French business tax(b) |
|
|
9.3 |
|
|
|
10.0 |
% |
Other, net |
|
|
0.9 |
|
|
|
1.0 |
% |
Germany |
|
|
|
|
|
|
||
Statutory income tax rate differential |
|
|
2.9 |
|
|
|
3.1 |
% |
Change in valuation allowance |
|
|
7.4 |
|
|
|
7.9 |
% |
Other, net |
|
|
1.1 |
|
|
|
1.2 |
% |
Italy |
|
|
|
|
|
|
||
Statutory income tax rate differential |
|
|
2.1 |
|
|
|
2.2 |
% |
Withholding Taxes |
|
|
3.6 |
|
|
|
3.9 |
% |
Italy Regional Production Tax |
|
|
3.2 |
|
|
|
3.4 |
% |
Other, net |
|
|
0.8 |
|
|
|
0.9 |
% |
United Kingdom |
|
|
|
|
|
|
||
Goodwill Impairment(c) |
|
|
6.4 |
|
|
|
6.9 |
% |
Other, net |
|
|
0.8 |
|
|
|
0.9 |
% |
Switzerland |
|
|
|
|
|
|
||
Goodwill Impairment(c) |
|
|
5.2 |
|
|
|
5.6 |
% |
Other, net |
|
|
(1.5 |
) |
|
|
(1.6 |
)% |
Denmark |
|
|
|
|
|
|
||
Nondeductible interest |
|
|
3.6 |
|
|
|
3.9 |
% |
Other, net |
|
|
1.1 |
|
|
|
1.2 |
% |
Netherlands |
|
|
|
|
|
|
||
Change in valuation allowance |
|
|
5.2 |
|
|
|
5.6 |
% |
Other, net |
|
|
(1.1 |
) |
|
|
(1.2 |
)% |
Japan |
|
|
|
|
|
|
||
Statutory income tax rate differential |
|
|
4.5 |
|
|
|
4.8 |
% |
Other, net |
|
|
(0.5 |
) |
|
|
(0.5 |
)% |
Other foreign jurisdictions, net |
|
|
23.0 |
|
|
|
24.6 |
% |
Effect of cross-border tax laws |
|
|
4.4 |
|
|
|
4.7 |
% |
State and local income taxes, net of federal benefit(d) |
|
|
1.4 |
|
|
|
1.5 |
% |
Tax Credits |
|
|
|
|
|
|
||
Foreign Tax Credits |
|
|
(8.5 |
) |
|
|
(9.1 |
)% |
General business tax credits(e) |
|
|
(5.9 |
) |
|
|
(6.3 |
)% |
Change in valuation allowance |
|
|
(0.7 |
) |
|
|
(0.7 |
)% |
Nontaxable or nondeductible items |
|
|
5.6 |
|
|
|
6.0 |
% |
Change in unrecognized tax benefits |
|
|
2.6 |
|
|
|
2.8 |
% |
Other, net |
|
|
(5.2 |
) |
|
|
(6.0 |
)% |
Tax provision |
|
$ |
106.7 |
|
|
|
114.2 |
% |
A tax reconciliation between taxes computed at the United States federal statutory rate of 21% and the consolidated effective tax rate for 2024 and 2023 is as follows:
Year Ended December 31 |
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
|
|
||
Income tax based on statutory rate |
|
$ |
53.9 |
|
|
$ |
43.2 |
|
Increase (decrease) resulting from: |
|
|
|
|
|
|
||
Non-United States tax rate difference: |
|
|
|
|
|
|
||
French business tax(a) |
|
|
9.2 |
|
|
|
13.0 |
|
Other(b) |
|
|
18.0 |
|
|
|
10.4 |
|
Repatriation of non-United States earnings |
|
|
(5.8 |
) |
|
|
4.6 |
|
State income taxes, net of federal benefit |
|
|
3.6 |
|
|
|
2.0 |
|
Change in valuation allowance(c) |
|
|
34.1 |
|
|
|
53.5 |
|
Work Opportunity Tax Credit |
|
|
(4.6 |
) |
|
|
(5.6 |
) |
Foreign-Derived Intangible Income deduction |
|
|
(3.6 |
) |
|
|
(7.2 |
) |
Goodwill impairment(d) |
|
|
— |
|
|
|
10.9 |
|
Change in unrecognized tax benefits(e) |
|
|
(0.3 |
) |
|
|
(14.4 |
) |
Other, net |
|
|
7.2 |
|
|
|
6.7 |
|
Tax provision |
|
$ |
111.7 |
|
|
$ |
117.1 |
|
Deferred income taxes are recorded based on temporary differences at the tax rate expected to be in effect when the temporary differences reverse. Temporary differences, which give rise to the deferred taxes, are as follows:
December 31 |
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
Future Income Tax Benefits (Expense) |
|
|
|
|
|
|
||
Accrued payroll taxes and insurance |
|
$ |
11.8 |
|
|
$ |
11.5 |
|
Employee compensation payable |
|
|
41.2 |
|
|
|
40.9 |
|
Pension and postretirement benefits |
|
|
71.4 |
|
|
|
66.9 |
|
Intangible assets |
|
|
(132.6 |
) |
|
|
(130.9 |
) |
Repatriation of non-United States earnings |
|
|
(31.3 |
) |
|
|
(24.2 |
) |
Loans denominated in foreign currencies |
|
|
15.8 |
|
|
|
(4.8 |
) |
Operating lease ROU assets |
|
|
(99.6 |
) |
|
|
(95.1 |
) |
Operating lease liabilities |
|
|
104.6 |
|
|
|
90.8 |
|
Tax credit and other carryforwards |
|
|
87.1 |
|
|
|
59.2 |
|
Tax loss carryforwards |
|
|
264.5 |
|
|
|
212.1 |
|
Other |
|
|
108.3 |
|
|
|
115.9 |
|
Valuation allowance |
|
|
(262.5 |
) |
|
|
(222.9 |
) |
Total future tax benefits |
|
$ |
178.7 |
|
|
$ |
119.4 |
|
Deferred tax asset |
|
$ |
185.0 |
|
|
$ |
135.0 |
|
Deferred tax liability |
|
|
(6.3 |
) |
|
|
(15.6 |
) |
Total future tax benefits |
|
$ |
178.7 |
|
|
$ |
119.4 |
|
The tax loss carryforward category includes capital loss carryforwards of $25.6 and $27.4 for 2025 and 2024, respectively, which are fully offset by valuation allowance due to the expiration of carryforwards and uncertain source of future capital gains. The tax credit and other carryforwards consist primarily of U.S. foreign and general business tax credits. A related valuation allowance of $13.4 was recorded as of December 31, 2025, as management believes that realization of certain tax credit carryforwards is unlikely.
We have not provided deferred taxes on $372.0 of accumulated unremitted earnings of non-United States subsidiaries that are considered indefinitely reinvested. We have not estimated the deferred tax liability on these earnings as such estimation is not practicable to determine or immaterial to the financial statements. As of December 31, 2025, deferred taxes for non-United States withholding and other taxes were provided on $1,662.1 of accumulated unremitted earnings of non-United States subsidiaries that may be remitted to the United States. As of December 31, 2025 and 2024, we have recorded a deferred tax liability of $28.2 and $25.9, respectively, related to these non-United States earnings that may be remitted.
We had United States federal and non-United States net operating loss carryforwards and United States state net operating loss carryforwards totaling $1,303.1 and $178.4, respectively, as of December 31, 2025. The net operating loss carryforwards expire as follows:
|
|
United States |
|
|
United States |
|
||
|
|
|
|
|
|
|
||
2026 |
|
|
— |
|
|
|
6.6 |
|
2027 |
|
|
0.2 |
|
|
|
5.6 |
|
2028 |
|
|
3.8 |
|
|
|
0.1 |
|
2029 |
|
|
7.1 |
|
|
3.1 |
|
|
2030 |
|
|
6.2 |
|
|
4.1 |
|
|
Thereafter |
|
|
27.3 |
|
|
|
129.4 |
|
No expirations |
|
|
1,258.5 |
|
|
|
29.5 |
|
Total net operating loss carryforwards |
|
$ |
1,303.1 |
|
|
$ |
178.4 |
|
We have recorded a deferred tax asset of $238.9 as of December 31, 2025 for the benefit of these net operating losses. Realization of this asset is dependent on generating sufficient taxable income prior to the expiration of the loss carryforwards. A related valuation allowance of $206.8 was recorded as of December 31, 2025, due to the expiration of net operating loss carryforwards and uncertain source of future taxable income.
We had gross unrecognized tax benefits related to various tax jurisdictions, including interest and penalties, of $41.4, $36.1 and $32.8 in 2025, 2024 and 2023, respectively. If recognized, the entire amount would favorably affect the effective tax rate except for $10.0. Our unrecognized tax benefits decreased by $48.8 during 2023 primarily due to the effective settlement of an audit during the third quarter, which resulted in the recognition of a tax benefit of $10.8.
We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. We accrued net interest and penalties of $0.4, $0.5 and $0.6 in 2025, 2024 and 2023, respectively. We reduced our accrued interest and penalties related to unrecognized tax benefits by $4.2 primarily due to the effectively settled income tax audit in the third quarter of 2023.
The following table summarizes the activity related to our unrecognized tax benefits during 2025, 2024, and 2023:
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Gross unrecognized tax benefits, beginning of year |
|
$ |
34.7 |
|
|
$ |
31.1 |
|
|
$ |
76.3 |
|
Increases in prior year tax positions |
|
|
5.6 |
|
|
|
6.5 |
|
|
|
4.6 |
|
Decreases in prior year tax positions |
|
|
(0.4 |
) |
|
|
(0.6 |
) |
|
|
(1.2 |
) |
Increases for current year tax positions |
|
|
2.4 |
|
|
|
2.2 |
|
|
|
2.6 |
|
Expiration of statute of limitations and audit settlements |
|
|
(2.5 |
) |
|
|
(4.5 |
) |
|
|
(51.2 |
) |
Gross unrecognized tax benefits, end of year |
|
$ |
39.8 |
|
|
$ |
34.7 |
|
|
$ |
31.1 |
|
Potential interest and penalties |
|
|
1.6 |
|
|
|
1.4 |
|
|
|
1.7 |
|
Balance, end of year |
|
$ |
41.4 |
|
|
$ |
36.1 |
|
|
$ |
32.8 |
|
We conduct business globally in various countries and territories. We are routinely audited by the tax authorities of the various tax jurisdictions in which we operate. Generally, the tax years that could be subject to examination are 2018 through 2025 for our major operations in France, Italy, the United Kingdom and the United States. As of December 31, 2025, we were subject to tax audits in Germany, India, Israel, Spain and the United States.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 22, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.