Labor & Taxes
State Budget 2027: See the new IRS tables for next year here
The government's 2027 state budget proposal includes a 3.88% update to IRS tax brackets, specific deductions, and the minimum existence threshold to ensure those on the minimum wage remain tax-exempt. The new nine-bracket table features rates ranging from 12.2% to 48%. These changes follow a scheduled reduction of 0.3 to 0.5 percentage points for the first six brackets (up to 43,090 euros) that will take effect in November 2026.
Why it mattersIf you are a resident working or receiving a pension in Portugal, your IRS withholding rates will change in November 2026 and again with these new tables in 2027, which will reduce your effective income tax liability.
CNN Portugal
