Público reports that changes to the withholding tables for personal income tax (IRS) mean many workers will see an extra €12–€21 per month in take-home pay, though some will still be over-withheld and may owe money at annual settlement. The new tables published on 6 January aim to increase monthly net pay, but employees should check payslips to ensure the correct table is applied and consult employers or an accountant if withholding seems off. Key Portuguese terms to watch on payslips include withholding tax (retenção na fonte) and IRS.
Withholding tax cut adds €12–€21 to paychecks
Sunday, 11 January 2026AI summary
Context & Explainers
The IRS withholding tables are government-published schedules used by employers, pension payers and other payers to calculate how much personal income tax (personal income tax (Imposto sobre o Rendimento das Pessoas Singulares) — IRS) must be deducted from each pay period. They take into account gross pay, pay frequency, marital status and dependents; updates (usually published annually or when the budget changes) affect your monthly take-home pay and are reconciled with your annual tax return (Modelo 3).
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.
