Without approval of law, IR table will be frozen in 2025

Without the approval of the Income Tax (IR) reform, which should only be sent to Congress after the vote of the 2025 Budgetthe progressive table is frozen this year. Anyone who earns more than R$2,824, just under two minimum wages, will pay the tax.

At the end of November, the government had announced its intention to increase the exemption range to R$5,000, in the second phase of the tax reform, which deals with IR. In exchange, the government intended to introduce a rate of around 10% on monthly income above R$50,000, which would offset the fiscal impact of increasing the exemption limit.

Originally announced to be processed alongside the spending cut package approved at the end of December, the proposal was postponed for this year. According to the Minister of Finance, Fernando Haddad, “inconsistencies” in the Revenue’s statistical models led the Tax Authorities to review the calculations. If Congress approves the Budget in February, the proposal may be sent in the same month or at the beginning of March.

Corresponding to the floor of the progressive table, the exemption range was raised for the last time in February 2024, from R$2,640 to R$2,824. The other tax brackets have remained unchanged since 2015. The 2025 Budget bill, sent to Congress in August, does not provide for changes to the Income Tax table.

Officially, the maximum zero rate limit is set at R$2,259.20. However, to guarantee exemption for those who receive up to R$2,824, equivalent to two minimum wages, there will be 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: exemption limit and two minimum wages.

The Federal Revenue clarifies that this simplified discount is optional. For those entitled to larger deductions under current legislation, such as dependents, alimony, education and health expenses, nothing will change.

Check the monthly IRPF progressive table, with the discount applied to the salary