Don't forget: Salary this month comes with “present” (but attention!)

O salary and pensions paid in November will be more filled, since the government decided to reduce the retentions at the source this month, to reflect already on the family portfolio the reduction of the IRS. However, you should know that several experts have already warned for a further impact on the IRS reimbursement next year. 

Salary of November: What's gonna happen? 

“ After approval by Parliament of the new IRS reduction, with effect from 1 January 2026, the government decided to reduce by 50% the withholding tax on labour income and pensions paid during the month of November, including the Christmas allowance due that month“, announced the Executive in notified. 

This decision, referring to, “occurs so that the families immediately benefit from this descent, not having to wait for the IRS to hit next year“.

The government is further encouraging that, “in december, retention tables at the current source will be applied again“. 

The order of the Government fixing the final amount to be retained in November to reflect the interim decline of the IRS in 2026 was published in Diário da República, establishing that, in that month, the paying entities of wages and pensions, instead of collecting the usual percentage of IRS, retain only half of that amount.

As the cut applies both to the monthly salary and to the Christmas allowance, which is subject to separate retention, the amount of IRS to be delivered to the State in November for all the two salaries – salary and allowance – will be similar to that which under normal conditions would apply only to the monthly salary. The differences arise from rounding to which the retention rules comply.

Attention to IRS reimbursement in 2027

Despite this “bonus” now in November’s salary, pay attention because the refund of the IRS may be cut by up to 70% because of the reduction of the retention at source that will be applied this 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, you will receive only EUR 79: minus EUR 168, a 68% drop, according to pwC simulations for Jornal de Notícias (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.