Employers, both public and private, who are unable to reflect the new IRS tax withholding tables in their payroll this month will be required to adjust the tax they now overpay in subsequent months.
“When for any reason the new withholding tax tables have not been applied in SeptemberThe additional amounts withheld in September compared to what would result from the application of the new tables must be deducted from the IRS amount to be withheld in October,” the Ministry of Finance said in response to Lusa.
The Ministry headed by Miranda Sarmento adds that, if this regularization cannot be carried out “totally or partially” in October, the remaining adjustment must be made in the following months, until the end of the year.
Civil servants, particularly those linked to the Ministries of Finance, Defence, Social Security, Culture and Foreign Affairs, will be among the first to feel the impact. of the new IRS withholding tables published in late August and designed to adapt to tax changes approved by Parliament.
These changes include a reduction in the rates applied to the first six tax brackets, an update of the specific deduction (which had been frozen at 4,104 euros for several years) and the minimum existence.
The new tables include two tariff models: one, with lower rates, which will be applied in the months of September and October, and another in the remaining months of the year, the first being intended to compensate workers and pensioners for the extra tax they withheld between January and August.
This offset may result in many workers and retirees not having any tax withheld this month (and next) or having significantly less withheld than they are used to.
Starting in November, there will also be some difference compared to the values maintained in the first eight months of this year, but it will be smaller than this month and next.
Although the entities that process salaries have had almost a month to adapt their systems to the new tables, there may be cases in which this adaptation has not been made in time for the payment of September salaries, and adjustments must be made in the following months.
Speaking to Lusa, the secretary general of the Federation of Public Administration Unions (Fesap), José Abraão, said he was not aware of any public service sectors that were not already applying the new withholding rates this month, but warned that the increase in disposable income that workers may experience this month and next will not be maintained.
“Starting in November, the income gap [face ao que receberam entre janeiro e agosto] “It is small and people should therefore be prepared for this and also for having a smaller refund or even taxes to pay next year,” the union leader stressed.
It should be noted that, in the case of pensioners, the IRS adjustment will only be made from October, regardless of whether the pension is paid through Social Security or Caixa Geral de Aposentações (CGA).
Source: Observadora
