The update to the minimum existence threshold in the IRS, included by the Government in the proposed State Budget for 2026 (OE2026), submitted today in parliament, stipulates that the exemption reference will be “the greater value between 12,880 euros and 1.5 × 14 × IAS [Social Support Index].”
This year, the amount was equivalent to “the greater value between 12,180 euros and 1.5 × 14 × IAS.”
The minimum existence threshold is an IRS rule ensuring total or partial tax exemption for those with lower incomes. Accordingly, the law sets a fixed income value up to which taxpayers do not pay any IRS, with reductions applied for those earning above this threshold.
As the Government announced in the State Budget report its intention to adjust the minimum wage from 870 euros in 2025 to 920 euros in 2026, the newly included fixed reference for the minimum existence — 12,880 euros — equals 920 euros monthly calculated over 14 months (12 regulatory months, plus holiday and Christmas bonuses).
This ensures that the minimum exemption value will be at least equivalent to the annual sum of the guaranteed minimum monthly compensation (RMMG).
However, as the current formula calculation “1.5 × 14 × IAS” already exceeds 920 euros (standing at 1,097.5 euros), the real value of the minimum existence will likely result from the “1.5 × 14 × IAS” formula, because the IAS for 2026 is expected to surpass the current one, thus exceeding 920 euros.
The OE2026 report indicates that the update will have a budgetary impact of 85 million euros.
[News updated at 13:58]
