IRS: November withholding cut in half, and tax rates to fall from January
What changes in November
Despacho no. 12523-A/2026 (a government order) says that, for employment income and pensions paid in November 2026, the employer or Segurança Social (social security) withholds only 50% of the IRS (personal income tax) that would result from the withholding tables (tabelas de retenção) in force.
In practice, your net salary in November will be higher. This is not a tax you are forgiven: it is a way to bring forward the effect of the rate cut, which applies to the whole of 2026 and will be settled in the IRS return filed in 2027.
And the rate cut?
The law that allows the Government to reduce the rates of the first six IRS brackets with effect from 1 January 2026 has been approved and promulgated. Until the decree-law (decreto-lei) is published in the Diário da República (official gazette), the current rates stay in force.
| Bracket | Current rate | Planned rate |
|---|---|---|
| 1st | 12.5% | 12.2% |
| 2nd | 15.7% | 15.2% |
| 3rd | 21.2% | 20.7% |
| 4th | 24.1% | 23.6% |
| 5th | 31.1% | 30.6% |
| 6th | 34.9% | 34.6% |
The rates of the 7th to 9th brackets do not change. As soon as the decree-law is published, we will update the IRS table (in Portuguese) and the net salary calculator (in Portuguese).
What to do now
Official sources
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