More salary in November, but great cut on reimbursement: It could drop 70%

Jeveryone is counting on a higher salary in november, but, attention, because the refund of the IRS can be cut by up to 70% because of the reduction of the retention at source which will be applied next month. 

A single person with a monthly gross salary of 1,500 euros would receive 247 euros of refund without the extraordinary cut of retention. However, with the application of the measure, will receive only 79 euros: minus 168 euros, a 68% drop, according to PwC simulations for the News Journal (JN).

Now, this average of 70%, refers to the situations simulated by the consultant and not to a forecast for all taxpayers, but a couple with a dependent, for example, may feel the same effect, reports the same newspaper.

This means that even though families have more money available in November, they should have a lower refund in 2027 when they deliver the 2026 IRS.

The size of the cut shall depend on income, retention and deductions from collection of the aggregate, explains the JN.

Fuller salary in November: Why?

The Government has announced a reduction to half of the withholdings at source on wages and pensions paid in November, including the Christmas allowance. This is to be reflected in the portfolio of families reduction of the IRS to the 6th step of EUR 400 million to support the middle class.

This relief should be felt by all taxpayers who pay this tax due to the progress of the IRS. 

“ This decline covers, in practice, all IRS taxpayers, even those who are above incomes, given the progress of the tax,” explained Prime Minister Luís Montenegro in Parliament when he announced the measure. 

At the time, Montenegro also clarified that “this tax relief will already be felt with a reduction in the retentions of the source in november, the salary and the Christmas allowance“.