How much will the new IRS rates affect your pocketbook? The government published sample calculations

The impact of the new IRS reduction announced by the government in Portugal on households will vary significantly depending on income level. Sample calculations published by the Ministry of Finance show that while annual earnings remain quite limited for some employees, they may exceed 300 euros for families with two incomes.

What rates are changing?

According to the planned regulation, rates will be reduced in the first six income brackets of the IRS.

A 0.3 point discount is foreseen in the first tranche, a 0.5 point discount in the second and fifth tranches and a 0.3 point discount in the sixth tranche.

The standard rates for the seventh, eighth and ninth brackets do not change.

However, due to the progressive structure of the IRS, upper income groups can also indirectly benefit from the change through the portion of their income falling into the lower brackets.

Approximately 12 euros for a single employee earning a salary of 1,000 euros

According to the government's simulations, the annual IRS burden of a single employee who does not have children and earns 1,000 euros gross per month decreases by approximately 12.10 euros due to the new regulation.

For an employee of the same profile with a monthly gross income of 2,000 euros, the annual difference increases to approximately 100.44 euros.

The gap widens in families with two children

In a couple with two income earners and two children, where one spouse receives a monthly gross salary of 2,500 euros and the other receives a gross salary of 1,500 euros, the annual IRS benefit is calculated as approximately 116.64 euros.

Example if salaries are 5,000 and 3,000 euros in the same family structure The annual difference in the calculation comes to 343.66 euros.

Retirees can also benefit from IRS discounts

Tax deductions are not limited to employees.

According to the example given by the government, the annual IRS difference of a person receiving a monthly pension of 1,000 euros is approximately 12.10 euros; The difference for a person receiving a monthly pension of 3,500 euros can be approximately 171.50 euros.

These figures are separate from the extraordinary payment of 100–200 euros to low- and middle-income retirees in December.

It is planned to be reflected in the November salary

The new rates are planned to be applied to 2026 revenues.

The government aims to see the impact of the change, which it said will cover approximately 2.9 million households, in November salaries and Christmas bonuses.

However, the published figures are sample scenarios. Actual tax benefits may vary depending on a person's income, family situation, deductions and other tax circumstances.

Additionally, the legislative process of the IRS amendment needs to be completed.

Resources

Portuguese Government — 17 September 2026

New IRS rates and official simulations

ECO — September 17, 2026

IRS simulations