The Ministry of Finance has already published the correction to the IRS withholding tables that will come into force in the first half of this year, in order to prevent remunerations above the minimum existence that benefited from salary increases from receiving less at the end of the month because of the tax. .
The need for the adjustment had already been admitted by the Minister of Finance, Fernando Medina, after the Federation of Public Administration Unions (Fesap) denounced cases of state workers who received less in net terms after having increased at the beginning of the year . The problem is recurring and this year’s Budget includes a safeguard mechanism that will be applied from the second half of 2023.
Government admits reviewing retention tables after meeting this week with civil service unions
But to avoid, until then, the negative impact on the net remuneration of the workers who were promoted, a correction of the withholding tables is already underway. This change includes a reduction in the withholding on account for each level and an adjustment of the thresholds applicable to dependent earned income of up to 964 euros, without dependents. This adjustment takes effect from January 1 of this year. The update of the withholding exemption limit is maintained at 762 euros per month, as well as the updates of the limits and types of withholding approved in December with effect in 2023.
On July 1, the new model of tables that follows the logic of the marginal rate enters into force, which, combined with the IRS levels that compute for the liquidation of the tax, will avoid “regression situations, in which increases in gross compensation monthly correspond to decreases in monthly net remuneration,” the order states.