Less IRS (income tax) will be taken from salaries and pensions paid in November 2026. The Government has decided to cut the IRS withheld at source (retenção na fonte) that month by 50%, and this also covers the Christmas bonus (subsídio de Natal) if it is paid in November. The Ministry of Finance announced it on Tuesday, 13 October, in a statement sent to newsrooms and reported by RTP and ECO. In December, the normal withholding tables apply again.
Update — 14 October 2026
Update (14 October 2026): The order is now official. Despacho n.º 12523-A/2026 of the Minister of State and Finance, dated 13 October, was published in the Diário da República, 2nd series, n.º 199 (supplement), on 14 October 2026. It confirms the 50% cut and adds some details:
- What is covered: income from employment (trabalho dependente) and pensions paid or made available between 1 and 30 November 2026. Withholding is 50% of the amount worked out with the current tables (Despacho n.º 233-A/2026 of 6 January).
- Christmas bonus: when a November payment includes more than one month’s pay, such as the subsídio de Natal, the 50% rule also applies.
- Exception for higher incomes: there is no cut for people whose monthly income is above the upper limit of the second-to-last bracket of the withholding tables that apply to them. Their withholding stays unchanged.
- Where: it applies to residents in Portuguese territory, except the Azores and Madeira.
- December: from 1 December 2026 the normal tables of Despacho n.º 233-A/2026 apply again, without the cut.
- Payroll mistakes: if November withholding was not done with the 50% cut, the employer or pension payer can correct it in the following months, until the end of December 2026.
Status: published and in force. The despacho entered into force on the day after publication (15 October 2026) and takes effect from 1 November 2026.
Status: announced by the Government on 13 October 2026 and published in the Diário da República on 14 October 2026 as Despacho n.º 12523-A/2026 (see the update above).
Why this is happening
On Friday, 9 October, Parliament approved the Government’s bill authorising lower IRS rates for the whole of 2026, backdated to 1 January, RTP and Lusa reported (see our article on the vote). According to the Government, the rates of the first six brackets fall by 0.3 to 0.5 percentage points. ECO lists the new rates as 12.2%, 15.2%, 20.7%, 23.6%, 30.6% and 34.6%.
Normally you would only feel a cut like this when your 2026 IRS return is settled in 2027. The ministry says it is halving November withholding so that families benefit straight away, without waiting for that settlement. As RTP puts it, the relief is concentrated in a single month, on both the salary or pension and the Christmas bonus.
What it means for immigrant workers
- Employees: if IRS is withheld from your salary today, about half of the usual amount should be withheld from your November pay, so your net pay that month should be higher. This does not apply if your monthly income is above the upper limit of the second-to-last bracket of your withholding table, or if you live in the Azores or Madeira.
- Christmas bonus: the cut applies to the bonus if it is paid in November. If your employer pays it in December, the normal tables are back that month.
- No IRS withheld now? If your salary is low enough that no IRS is taken today, nothing changes for you.
- Pensions paid in November are covered too.
- Self-employed (recibos verdes): the despacho covers only income from employment and pensions. It does not mention income from self-employment.
This is not a separate bonus from the State. Withholding is tax paid in advance. Your final IRS for 2026 is still worked out in your IRS return in 2027, using the new lower rates and counting what was actually withheld during the year, including the smaller amount in November.
What to do
- Check your November payslip (recibo de vencimento): look at the IRS line (retenção IRS). If it looks unchanged, ask your employer’s payroll department.
- Ask your employer when your Christmas bonus will be paid: in November or in December. See our guide to holiday and Christmas pay.
- Do not count on the same net pay in December: normal withholding returns.
- Keep all your payslips for your 2026 IRS return. Our IRS guide and gross-to-net salary guide explain how it works.
Key dates
- 9 October 2026: Parliament approves the bill authorising the 2026 IRS rate cut (RTP, Lusa).
- 13 October 2026: Ministry of Finance announces the 50% withholding cut for November.
- 14 October 2026: Despacho n.º 12523-A/2026 published in the Diário da República.
- November 2026: withholding cut by 50% on salaries, pensions and a Christmas bonus paid that month (mainland Portugal; not for the highest incomes).
- December 2026: the current withholding tables apply again. Employers can still correct November mistakes until the end of December.
- 2027: your IRS return for 2026 income is settled at the lower rates.
For next year’s brackets, see IRS brackets rise 3.88% in 2027.
Sources
- Diário da República – Despacho n.º 12523-A/2026, 2nd series, n.º 199 (14 October 2026, official)
- RTP, with Lusa – IRS withholding cut by 50% in November (13 October 2026), quoting the Ministry of Finance statement
- ECO – Government cuts IRS withholding tables by 50% from November (13 October 2026)
- Jornal Económico – IRS withholding cut by 50% in November (13 October 2026)
- Portuguese Government – New IRS rates and simulations (17 September 2026, official)
- Link in Portugal – IRS cut 2026: Parliament vote
Featured image: Branded graphic: Link in Portugal (original work; no third-party photos)
This article is general information, not legal or tax advice. Rules change often; check with Portal das Finanças, your employer’s payroll department or a certified accountant (contabilista certificado) before you act. Link in Portugal is not affiliated with the Autoridade Tributária or the Portuguese Government. Last updated: 14 October 2026.
