Labor & Taxes
2027 State Budget: Government extends IRS and Social Security exemption on productivity and performance bonuses
The government's 2027 State Budget proposal keeps the current tax and social security exemptions for performance and productivity bonuses paid by employers. Bonuses remain exempt from IRS (up to 6% of the annual base salary) and social security contributions, provided the company increases the average annual base salary of its workers by at least 4.5%.
Why it mattersIf your employer offers performance-based bonuses, you may continue to receive them tax-free in 2027, provided your company meets the mandatory 4.5% salary increase threshold.
CNN Portugal
