The new IRS withholding tax system goes into effect today for mainland Portugal, allowing net gains of up to 5% on wages and pensions, i.e. category A and H income respectively, according to calculations by the Ministry of Finance . It means that employees, public and private, and retirees will start taking home more money at the end of July as the discounts decrease.
“This new model aims to ensure that an increase in gross income always corresponds to an increase in net income at the end of the month and to provide a larger and increasing approximation of the value of the movable property. withholding tax against the IRS amount paid by the delivery of the Model 3 return from IRS,” the guardianship, led by Fernando Medina, defended in a statement released yesterday.
To determine the income that employees and retirees can have at the end of the month, Dinheiro Vivo performed five simulations for a gross monthly income of 1300 euros, taking into account that the average compensation declared to the social security in April amounted to 1339. , 77 euros, according to the latest official data. The examples do not include the meal allowance, because it is taxed separately, and do not count for the determination of the deduction from wages or pension.
In the case of a single employee without children, with a salary of 1300 euros gross, the net salary, already after deduction of IRS and National Social Security, will increase by 17 euros per month to 978 euros, while it is currently from 961 euros. For the same income, a couple without children will have an extra 16 euros left over at the end of the month, as the net salary rises from 962 euros to 978 euros per month. Taking into account a couple with two children, the net monthly income will increase from 26 euros to 1021 euros compared to the 995 euros currently on the payroll. For a pensioner, sole holder, the increase is 22 euros, from 977 euros to 999 euros per month.
Fines
But not all taxpayers will win. A single person with a dependent child with a degree of disability equal to or greater than 60% and whose gross salary exceeds EUR 1,118 will receive less at the end of the month because the retention rate rises. So, and for the example given by the DN, an employee in those circumstances who earns $1,300 gross per month loses $26 net. That is, instead of receiving 1130 euros, already after the discounts, you earn 1104 euros. A situation that the Minister of Finance admitted this week could be corrected, but without giving any further explanation. For the second time, and after Medina’s statements, the DV asked the guardian to correct the tables so as not to harm single parents or dependent children with disabilities and received no response until the end of the edition.
The weight that Finance assigns to the disabled child is one of the main justifications for the deteriorating retention rate. Until June, a dependent with a disability rate equal to or greater than 60% was equivalent to five children for tax purposes, significantly easing the reductions. From the second semester, the same descendant will be worth only 3.5 children according to the DV accounts.
Remember that IRS rebates are advances that employees pay to the state in respect of tax due in the following year. Greater retention does not mean an increase in the tax burden. That is, those who give a higher discount now can get a larger amount back later. Employees who withhold less may receive or even have to pay less tax.
It is the third time this year that the government changes the withholding tax. After the January update, the tables were changed again in May and June to accommodate the additional 1% salary increase for the civil service. However, the exemption ceiling, which rose from 762 euros to 765 euros, did not prevent the increase in the minimum wage in the state, which rose to 769.2 euros. This means that civil servants at the lowest salary level will deduct for the first time for the Tax and Customs Administration. That threshold has now been lowered again, from 765 to 762 euros. That is, they are exempt from discounting those who are below that limit. We remind that the national minimum wage has increased to 760 euros this year compared to 705 euros last year, which means that it is subject to withholding tax.
Source: DN
