Portugal's IRS Cut Reaches November Pay, With a Pension Supplement in December

If IRS, Portugal’s personal income tax (Imposto sobre o Rendimento das Pessoas Singulares), is withheld from your salary or your Portuguese pension, two things announced on 8 September 2026 are meant to reach your bank account before the year is out. The first is an income-tax cut worth €400 million, covering income up to the sixth IRS bracket, delivered as lower withholding from November and backdated to January. The second is a one-off supplement worth €400 million for pensions up to three times the Indexante dos Apoios Sociais (IAS, the social-support index), paid with the December pension.

Neither is law yet. Prime Minister Luís Montenegro made the announcement in Parliament, during the debate on Chega’s censure motion; the decree goes to the Council of Ministers next week and then needs a vote in Parliament. What each bracket gets, and what each pension band gets, has not been published.

There is nothing to file. The withholding tables change on the employer’s side, and the supplement is paid automatically to pensioners in the bands.

What exactly was announced on 8 September?

Two measures, €800 million together on the finance minister’s figures:

• An IRS rate cut worth €400 million, reaching income “up to the sixth bracket”. Montenegro said the cut is aimed at the middle class but, because the tax is progressive, “in practice covers every IRS taxpayer, even those in the brackets above”.
• An extraordinary pension supplement worth €400 million, paid in a single instalment in December, on the model of 2024 and 2025.

Finance minister Joaquim Miranda Sarmento, interviewed by SIC Notícias the same evening, said the measures leave the 2026 public accounts at least balanced “barring some cataclysm”, and possibly in a small surplus. He also explained the choice behind them: the government preferred putting money into incomes over cutting fuel taxes further, which he called a subsidy that is harder to exit. The fuel discount already in force costs more than €1 billion on the Public Finance Council’s estimate, he said, and he warned Parliament not to add fuel relief on top of these two measures.

This is the third year running that the AD government has cut IRS rates part-way through the year rather than in the January budget. Observador’s account of the announcement puts the 2025 cut at €500 million and notes that 2024 saw two cuts; this year’s €400 million is the smallest of the three.

Who is “up to the sixth bracket”?

The 2026 mainland table, in the wording of Lei n.º 73-A/2025 of 30 December 2025 and published in article 68 of the IRS code, has nine brackets. The sixth covers taxable income from €29,397 to €43,090. The six the cut is aimed at are the first six rows:

Bracket	Taxable income, 2026	Marginal rate
1	up to €8,342	12.5%
2	€8,342–12,587	15.7%
3	€12,587–17,838	21.2%
4	€17,838–23,089	24.1%
5	€23,089–29,397	31.1%
6	€29,397–43,090	34.9%
7	€43,090–46,566	43.1%
8	€46,566–86,634	44.6%
9	above €86,634	48%

Three things to read into that table.

The table is written in taxable income, not gross salary. Rendimento coletável is the income left after the deductions the code allows, so a gross salary somewhat above €43,090 can still land inside the sixth bracket.

Everyone above the sixth bracket is touched too. Portuguese IRS taxes income slice by slice, each slice at its own rate, which is why Montenegro could say the cut reaches every taxpayer: a lower rate on the first six slices lowers the bill of someone whose income runs into the ninth as well.

Press reports quote other boundaries. Observador’s report describes the sixth bracket as €28,400 to €41,639 of gross annual income; those figures match the 2025 boundaries rather than the table in force for 2026. Until the decree is published, the table above is the reference, and the size of the rate cut in each row is unknown.

These are the rates our IFICI guide describes as what a “normal taxpayer” pays. If the cut passes, the 2026 numbers in that guide change, and we will update them once the law is published.

When will you see it in your pay?

November, if IRS is withheld from your income at source. The Ministry of Finance told Observador that “the reduction in withholding will be applied in November, so as to reflect the retroactive effect to January”. In practice that means new withholding tables for November that correct, in one go, the tax withheld since the start of the year, so the November net figure is larger than a single month’s cut would make it. November is also the month the Christmas subsidy is processed.

That is how the 2024 and 2025 mid-year cuts were delivered. Without the change to the tables, as Rádio Observador’s bulletin put it, the money would only reach taxpayers in May or June 2027, with the annual return.

Two groups will not see anything in November:

• If no Portuguese payer withholds IRS from your income (a salary or pension paid from abroad, for example), the lower rates reach you on the 2026 return you file in spring 2027, assuming the cut passes as described.
• If you are on IFICI’s 20% flat rate, the announcement said nothing about it. That rate is set separately from the general table, so do not assume it moves.

What is still open is the size of the cut in each bracket. The finance minister declined to say how the €400 million is spread across incomes, pointing to the proposal the government will put to Parliament. Parliament can reshape it, as it did in 2024, when the final version cost more than the government had planned.

What is the pension supplement, and who gets it?

A single payment made with the December pension, for pensioners in three income bands: up to 1 IAS, 1 to 2 IAS, and 2 to 3 IAS. The IAS for 2026 is €537.13, fixed by Portaria n.º 480-A/2025/1, so the ceiling works out at €1,611.39 a month. That multiplication is ours, not the ministry’s. The model is the one used in 2024 and 2025, and the minister expects payment “on 7 or 8 December” with the pension, as in those two years.

The government has not announced the amounts. The minister’s reference point was 2025, when pensioners on up to one IAS (then €522.50) received €200, and he said “this year will be similar” for that band. The amounts for the 1–2 and 2–3 IAS bands were not given.

Also not said: anything about pensions paid from abroad. The minister described the supplement as arriving together with the pension, and the announcement did not mention foreign pensions at all. If yours is paid from outside Portugal, do not count on it until the decree says otherwise.

What should you do next?

• Working out what you pay under the current table? IFICI explained carries the 2026 rates and the “normal taxpayer” case — the numbers this cut would change.
• Wondering why fuel relief did not get the money instead? Portugal’s inflation rose to 3.3% in August, and almost all of it is fuel — the trade-off the minister described.
• The fuel discount that is staying as it is: Portugal trims its weekly fuel-tax discount from 10 August explains how it works and what it takes off a litre.
• Budgeting a move? The cost of living in Portugal sets out 2026 monthly ranges. A November withholding change is not a reason to redo a budget built on those.

This is general information, not tax advice. The measures announced on 8 September 2026 are proposals until the decree and the November withholding tables are published — verify them at portaldasfinancas.gov.pt, and take a cross-border question to an accountant.