IRS: 2024 brings decrease in rates for the first five brackets

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Updated IRS brackets and lower rates in 2024.

The Government shared a post on its social media, clarifying the decrease in IRS rates in 2024, depending on one's annual income.

So, according to the entry into force of the new State Budget for 2024 (OE2024) if you receive between the following values, you will pay less IRS: 

Taxpayers who receive gross salaries up to 2,232 euros now pay less IRS, as well as "the first five income brackets of IRS" which now see "their rate reduced in 2024", considering that "the rate applied to each bracket must also be deducted to determine the income subject to tax", according to DECO Proteste cited in a Notícias ao Minuto news article.

The consumer defense organization further explains: "With the approved State Budget, the year 2024 should bring a decrease in IRS rates in the brackets with annual taxable incomes up to €27,146. That is, monthly gross salaries up to €2,232 are covered by this reduction in IRS rates. It should be noted that taxable incomes result from subtracting the specific deduction of €4,104 from the gross annual income."

The Government clarified in a statement, also through the news, that the fact that these workers now pay less IRS in 2024 is due to the updating of the brackets at 3% and the lowering of marginal rates, from the first to the fifth bracket.

Less IRS, more budget slack  

With savings on this tax, note that: you gain a general saving by not paying as much in IRS, but if you receive a tax refund, now you will receive a smaller amount. In the case of having to return the tax, in this case the amount to be reimbursed is also lower.

Afterwards, when achieving a greater budgetary flexibility, you should redirect it to savings. Create an emergency fund, or invest the extra money in a retirement savings plan, or in savings certificates, for example.

If the amount you will save with the tax reduction is not enough and you still need a greater leeway in your budget, consider other options.

Do you have credits? Insurance? Talk to Poupança no Minuto and, through our credit intermediaries and insurance mediators who provide a free service, discover the most advantageous solutions to lower the installments of your contracts.  

The issue may involve a renegotiation of the terms of the contracts with the respective entities, or even a transfer of the contracts to a new entity (which can generate significant savings).

Learn more about the solutions and find out which one is most suitable for you, contact us!