The value is the results of the combined effect of the national minimum wage update and from a new adjustment between the monthly amount withheld from workers and the amount of IRS that they actually have to pay.
According to the order that fixes the withholding tables to be applied in 2022, salaries and pensions of up to €710 per month will no longer have money withheld at source by the IRS.
In addition to the increase in the amount up to which there is exemption from IRS – and which aims to accommodate the updated minimum wage of €705 – the new tables also adjust the retention rates applicable to the different levels of income.
A single person without dependents (or a married couple who both work, equally without dependents), with a salary of €740 gross, will see the withholding tax rate drop from the current 8 percent to 4.5 percent. The monthly discount will thus drop from €59 to €33, translating into an increase in income of €26 per month or €740 in a year.
A single, also without dependents, with a salary of €900 will start to deduct one euro less per month, while if their salary is €2,000, the monthly savings via IRS will be €4 (€56 in a year).
In the case of pensioners, the adjustment of the withholding table at source occurs essentially at the base – guaranteeing tax exemption up to €710 – with no changes being generally made to the withholding rates in the following levels.
According to the Ministry of Finance, over the past three years, the update of the withholding tax tables resulted in an adjustment of around 500 million euros, to which the €175 million are added via the 2022 tables.
As the withholding tax works as an advance from the IRS that taxpayers have to pay, a decrease in this monthly discount should also translate into a lower reimbursement in the following year.
In 2021, according to budget execution data until October, the amount of IRS reimbursed amounted to €2,813 million.
Its hopeless, in the end I remain above 80% tax on money spent, 60% on money earned. Didn't really change at all.
By Pedro from Lisbon on 05 Dec 2021, 09:34