The reduction in IRS, approved in parliament on Friday, will allow a single worker without children, earning a salary of 1,000 euros, to pay 34 euros less in annual tax compared to the current IRS table, according to simulations by PwC.
The consultancy’s calculations indicate that the proposed legislation, approved in general terms, introduces a broad cut in IRS taxes payable this year across all income levels.
Although the rates only decrease up to the eighth bracket, the reduction extends to the ninth due to the progressive nature of tax calculations.
PwC’s simulations detail the reduction under two scenarios: relating to the current IRS table and concerning the 2024 IRS table.
There is a decrease in IRS across various salary levels, including gross salaries of 950, 1,000, 1,100, 1,250, or 1,500 euros, as well as salaries of 2,000, 3,000, or 4,500 euros, and incomes of 6,000 or 7,000 euros gross per month.
The calculation for a taxpayer earning a salary of 1,000 euros pertains to a single worker without children, positioned in the second income bracket.
Despite the additional gain being 34 euros, the difference compared to last year’s IRS is 264 euros, due to adjustments in the income brackets and an update to the minimum existence rule in the State Budget for 2025, resulting in a tax reduction from 2024 to 2025. This already assured 230-euro annual reduction is now supplemented by this new 34-euro decrease.
The situation is similar for a childless couple, each earning 1,000 euros gross monthly. The additional IRS reduction for the couple will be 67 euros annually. This also applies to simulations for two married employees with two children. The overall tax reduction compared to 2024 is 527 euros for both couples.
Still within the second income bracket, a simulation for a single, childless taxpayer earning 1,100 euros gross monthly shows an additional 55-euro reduction. The final difference compared to last year’s IRS will be 86 euros.
In the third bracket, which includes taxpayers with salaries of 1,250 euros and 1,500 euros gross, the additional savings will be 65 euros and 83 euros, respectively. Compared to the 2024 IRS, the difference is 132 and 155 euros, respectively.
In the fourth bracket, a gross salary of 1,850 euros benefits from an additional 111-euro decrease, bringing the annual savings to 220 euros (with this 111-euro cut adding to the previously secured 109 euros).
In the fifth level, a salary of 2,000 euros, also for a single, childless taxpayer, receives an additional IRS reduction of 124 euros, raising total savings compared to 2024 to 293 euros.
In the sixth bracket, a salary of 3,000 euros will pay 207 euros less compared to the current IRS table. Consequently, annual savings increase to 385 euros.
At the seventh level, a salary of 3,500 euros gains an additional reduction of 240 euros, adding to the previously obtained savings for a total tax relief of 574 euros compared to 2024.
For those in the eighth bracket, the last with a nominal rate cut, the additional savings for a monthly salary of 4,500 euros is 290 euros annually in IRS, with a cumulative difference of 645 euros compared to 2024.
In the ninth bracket, the final one, earning 7,000 euros gross monthly results in an additional IRS decrease of 401 euros, providing a tax cut of 866 euros compared to last year.
These calculations pertain to simple standard scenarios. The actual IRS calculation is influenced by each taxpayer’s specific factors, starting with the deductible expenses.
PwC assumes that taxpayers have no other deductible expenses aside from general and family expenses.
