IRS: November withholding halved, smaller refund in 2027
Parliament approved a cut of 0.3 to 0.5 points in the rates of the first six IRS brackets, backdated to 1 January 2026, and the President signed it into law on 20 October. To pass the saving on straight away, a Finance Ministry order published in the Diário da República halves the IRS withheld from salaries and pensions paid in November 2026, Christmas bonus included. In December the normal withholding tables apply again. The cut does not apply above the top of the second-to-last withholding bracket: about €20,000 a month for employees and €18,000 for pensioners.
Why it matters for your move
Your November pay will be higher, but less tax is paid in advance, so the IRS refund in spring 2027 will be smaller and some people will owe tax instead. In an EY simulation for ECO, a single person on €1,500 gross a month goes from a refund of about €147 to paying about €21. Do not count on your usual refund.
This is Re-locant.com’s own brief, written to explain what the update means for people moving to or living in Portugal. For the full original report, see the source below.