Withholding tax is the income tax deducted at source from salaries by employers, known in Portuguese as retenção na fonte. A recent change reduced these monthly deductions by roughly €12–€21 for many workers, so take-home pay will rise by about that amount depending on your bracket and family situation. For expats, this affects your net salary immediately but doesn’t change your annual tax liability — you may still need to reconcile taxes when filing your return.