The continued exemption from Personal Income Tax (IRPF) for those who earn up to two minimum wages will require compensation, such as spending cuts or increases in other taxes. The 2025 Budget bill, sent to the National Congress on Friday (30)does not provide for readjustment in the table.
“It is not foreseen in the Budget. Maintaining the exemption range of two minimum wages, a compensatory measure will be necessary for this,” said the Secretary of the Federal Revenue, Robison Barreirinhas, in a press conference to detail the budget proposal.
Currently, workers with formal employment contracts who earn up to two minimum wages (R$2,824 in current values) do not pay income tax. Officially, the maximum limit for the zero rate is set at R$2,259.20. However, to guarantee exemption for the two minimum wage bracket, there is a simplified discount of R$564.80 from the income on which the tax should be levied. This discount corresponds to the difference between the two values: the exemption limit and two minimum wages.
This simplified discount is optional. For those who are entitled to larger deductions under current legislation, such as dependents, alimony, education and health expenses, nothing changes.
The range from R$2,259.21 to R$2,826.65 is taxed at 7.5%. From R$2,826.66 to R$3,751.05, the tax rate is 15%. Between R$3,751.06 and R$4,664.68, the tax charged is 22.5%. Above R$4,664.68, the rate is 27.5%.
