The Council of Ministers (Conselho de Ministros) approved personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) reductions covering the first six income brackets. The decree-law applies retroactively from 1 January 2026, lowering deductions on employment income and pensions. The measure is designed to raise disposable income for approximately three million Portuguese families.
Government Approves Income Tax Cuts for Three Million Households
Friday, 30 October 2026AI summary
Context & Explainers
The IRS withholding tables (tabelas de retenção na fonte) are government-published schedules that determine how much personal income tax (Imposto sobre o Rendimento das Pessoas Singulares — IRS) employers must deduct from each paycheck. They take into account gross pay, marital status, number of dependents, and disability status.
The tables are updated annually (and sometimes mid-year when budgets change), directly affecting monthly take-home pay. When tables are revised downward, workers see more in their pay packet; when raised, less. Any difference between amounts withheld and the actual tax owed is settled when the annual IRS return (Modelo 3) is filed, typically between April and June.
Employees and pensioners should check the current tables — published by the Autoridade Tributária e Aduaneira (AT) — whenever they change, as the impact on net income can be significant.
