State Budget 2027: IRS specific deduction increase dependent on IAS update

The 2027 State Budget confirms that the 'specific deduction'—the portion of income excluded from IRS tax for workers and pensioners—will increase in 2027. However, the exact amount is currently unknown because it is calculated as 8.54 times the Indexante de Apoios Sociais (IAS), and the new IAS value for next year has not yet been set by the government.

Why it mattersWhile the government has confirmed this tax deduction will rise, the exact savings on your 2027 income tax depend on the future IAS adjustment, which is typically announced only in late December.

Correio da Manhã· 1h agoRead original ↗

Minister assures tax neutrality for salary increases up to 4.5%

The Minister of Finance stated that the 2027 State Budget proposal ensures 'tax neutrality' for salary increases of up to 4.5%. This is achieved by updating IRS brackets by 3.88%, raising the 'mínimo de existência' (subsistence threshold), and maintaining the previously proposed reductions in IRS rates, ensuring that individuals receiving such raises will pay less IRS in 2027 than in 2026.

RTP· just nowRead original ↗

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Labor & Taxes

Government keeps IRS-exempt productivity bonuses for companies that increase salaries by 4.5% next year

The government's 2027 State Budget proposal maintains the IRS exemption for performance and productivity bonuses up to 6% of a worker's annual base salary. To qualify, companies must increase their average annual base salary by 4.5% and ensure this increase applies to workers earning at or below the company's average base salary from the previous year. This tax benefit is currently set to expire on December 31, 2027.

Observador· 33m agoRead original ↗

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State Budget 2027: IRS specific deduction increase dependent on IAS update

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Minister assures tax neutrality for salary increases up to 4.5%

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