Published corrected IRS withholding tables

The publication of these new tables was requested last week by Fesap

The Ministry of Finance has published corrected IRS tables for the first semester, which avoid cuts in the net income of those who have had a salary increase and have a direct impact on workers who earn up to 964 euros gross per month.

The order, published in a supplement to the Diário da República, approves the withholding tax tables on income from dependent work and pensions earned by holders residing on the mainland, to be in force between 1 January and 30 June, with the aim of preventing, in the Civil Service, as a result of the new salary increases, the category of operational assistants earns more than that of technical assistants.

The publication of these new tables was requested last week by Fesap, to correct "errors" that led the IRS to absorb part of the salary appreciation of some civil servants, which is why, with this order, the tax has now been reduced.

«As part of the adjustment effort that has been made with a view to approximating the tax withheld to the tax due in final terms, there was a need to make additional adjustments to the withholding tables approved at the time, reducing the withholding rates in the source of each step and adjusting the thresholds of these steps, applicable income from dependent work up to 964 euros per month, without dependents», justifies the executive in the diploma.

The dispatch clarifies that the tables relating to income from dependent work earned by the disabled remain in force, as well as the tables relating to pension income (with the exception of alimony payments), as approved at the beginning of December, which maintain the update of the withholding tax exemption limit to 762 euros per month, through the application of the minimum stock, as well as other updates to limits and withholding rates.

«As of the 1st of July, a new model of withholding tables will come into effect, following a marginal rate logic, in harmony with the IRS levels that are relevant for the annual assessment of the tax, thus avoiding regressive situations, in which increases in gross monthly remuneration correspond to decreases in net monthly remuneration», reinforces the Ministry of Finance in the order.

Without these corrected tables, as explained by the secretary general of the Federation of Public Administration Unions (Fesap) José Abraão, after the salary increase and appreciation that some of the workers will have this year, they would be earning less, in net terms, than colleagues who have recently entered Public Administration.

Among the examples he presented, José Abraão pointed out that of operational assistants whose gross salary increases in 2022 from 709 to 757 euros, due to an appreciation registered in June, and which in January of this year will add to that value another 104 euros.

For the union leader, «it is not understandable» that «of these 150 euros in valuation, around 100 euros go to taxes and contributions». That is, this worker «will earn more in 2023 than in 2022, but does it make sense that with this valuation of 150 euros, he withdraws around 100 euros for taxes and contributions?», he questioned.