The August salary was higher than usual due to the implementation of new IRS tax tables. September will see a similar increase, but this won’t last as October brings changes.
The changes stem from the new IRS tables, effectively increasing workers’ monthly income. This relief is more pronounced in August and September due to retroactive payments.
Starting in “October, the regular IRS rates will be applied, which, although lower than the previous ones, will still provide additional disposable income,” the Government promised.
What changes?
With the new tables, the rate for the first bracket drops from 13% to 12.5%, the second from 16.5% to 16%, the third from 22% to 21.5%, the fourth from 25% to 24.4%, the fifth from 32% to 31.4%, the sixth from 35.5% to 34.9%, the seventh from 43.5% to 43.1%, and, finally, the eighth from 45% to 44.6%.
The rate for the highest income bracket remains at 48%.
While there is no change in this last tier, the proposed IRS reduction by the Government applies to all taxpayers due to the progressive nature of the tax table. The reduction in previous brackets ensures that even those in the new bracket benefit from the easing.
Your August salary was higher than usual? This is due to the new IRS tables, which increase workers’ monthly income. This relief is more pronounced in August and September due to retroactive payments.
Beatriz Vasconcelos | 08:40 – 27/08/2025
How much will you save?
Practically, the impact of the changes in 2025 depends on each family’s fiscal situation, but simulations released by the Ministry of Finance provide some insights.
A couple with two children, both earning 1,500 euros monthly, will see an annual IRS reduction of 165 euros compared to forecasts in the OE2025, according to Ministry simulations.
A simulation for a couple without dependents predicts an annual tax saving, compared to the current system, ranging from 67 euros (when each earns 1,000 euros gross monthly) to 414 euros (when each salary is 3,000 euros).
For a single earner without dependents, the annual tax saving compared to the OE2025 ranges from 34 euros for salaries of 1,000 euros to 207 euros for salaries of 3,000 euros.
Regarding a pensioner with a pension up to 1,000 euros (gross), the annual tax saving compared to OE2025 will be 34 euros, increasing to 83 euros for pensions of 1,500 euros, 124 euros for pensions of 2,000 euros, 166 euros for pensions of 2,500 euros, and 208 euros for pensions of 3,000 euros.
On the other hand, PwC simulations show that the IRS reduction allows a single worker without children, earning 1,000 euros, to pay 34 euros less in annual tax compared to the current IRS table.
August and September deliver higher salaries for workers, but attention needs to be paid to refunds (or lack thereof) in 2026. DECO PROTeste provided Notícias ao Minuto with tips to ensure the salary increase isn’t a ‘poisoned present’.
Beatriz Vasconcelos | 07:59 – 22/08/2025
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