Labor & Taxes
50% cut in November IRS withholding tax excludes salaries above 18,000 to 20,000 euros per month
The government has approved a 50% reduction in IRS (income tax) withholding for the month of November, covering both monthly salaries and the Christmas bonus. This reduction applies to all taxpayers except those with monthly earnings above the second-to-last tax bracket, which is approximately 20,000 euros for employees and 18,000 euros for pensioners. The measure aims to implement tax relief retroactively for 2026 by adjusting the amount withheld from earnings paid between November 1st and November 30th, 2026.
Why it mattersIf you are an employee or pensioner in Portugal, you will see a temporary increase in your net take-home pay for November because your tax withholding will be halved, provided you earn below the high-income threshold set by the government.
