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Withholding Tax - Retenção na Fonte in 2025
New calculation mechanism for the withholding tax
In 2025, payments of salaries and pensions shall be adapted to the new withholding tax calculations mechanism, aiming at applying adequate withholding tax rates in view of the taxpayer's situation.
The new withholding tax tables for the 2025 personal income tax (IRS) are published on the Tax Authority Website. The reduction in this tax, which has been in force since the beginning of January, will boost the incomes of workers and pensioners.Here are a few examples:
The new withholding tax tables for the 2025 personal income tax (IRS) are published on the Tax Authority Website. The reduction in this tax, which has been in force since the beginning of January, will boost the incomes of workers and pensioners.Here are a few examples:
- An unmarried taxpayer, with no dependents and a salary of around €1,300, will withhold 14.4% of IRS tax every month––around €187.2 per month (i.e., €2,246.4 per year)
- A taxpayer under the same conditions, but with a salary of around €2,000 per month, will withhold 16.9% of IRS tax–– around €338 per month (€4056 per year)
- A married taxpayer, with one dependent and a gross salary of €2,000 per month, will withhold 4% of IRS tax––around €80 per month (€960 per year).
Workers who receive the minimum wage, which has risen to €870, are exempt from paying IRS and do not have to pay withholding tax.
Please refer to the Financial Authority website to access the withholding tax tables.