In force since January 1st, the new Income Tax (IR) 2026 table brings relevant changes for millions of taxpayers.
The main new feature is the total exemption for those earning up to R$5,000 per month and the gradual reduction in tax for incomes of up to R$7,350.
The traditional Income Tax table was not changed, with the values in force in 2025 continuing. The difference lies in the additional reducers introduced by the IR reform.
To guarantee the benefit to those earning up to R$7,350, the Federal Revenue Service created new deduction tables to be applied simultaneously with the traditional table.
The changes apply to salaries paid from January onwards, with an impact noticed from February payments onwards. The changes will be reflected in the 2027 Personal Income Tax Declaration, which considers income from 2026.
Next, see who is entitled to the exemption, what the monthly ranges, rates and the annual IR table look like.
Who is exempt from Income Tax in 2026?
With the new rule, the following are now completely exempt from IR:
- workers with a formal contract;
- public servants;
- retirees and pensioners from the INSS or their own schemes;
- as long as the total monthly income does not exceed R$5,000.
Anyone who has more than one source of income will need to supplement the tax in their annual declaration, even if each isolated income is less than R$5,000.
Those who earn up to R$7,350 also pay less tax
For income between R$5,000.01 and R$7,350, there is a partial and decreasing tax reduction:
- the closer the income is to R$5,000, the greater the discount;
- the closer to R$7,350, the lower the benefit;
- Above this value, there is no reduction.
The rule also applies to the 13th salary.
Exemption table and monthly income tax reduction: 2026
| Monthly taxable income | Tax reduction |
| Up to R$5 thousand | Up to R$ 312.89, excluding tax |
| From R$5,000.01 to R$7,350 | R$ 978.62 – (0.133145 × monthly income), until zero for those earning R$ 7,350 |
| From R$7,350.01 | No reduction |
Source: Federal Revenue
Monthly Income Tax Table in 2026
For income above R$7,350
| Monthly calculation basis | Aliquot | Deduction |
| Up to R$2,428.80 | Free | – |
| From R$2,428.81 to R$2,826.65 | 7.5% | R$ 182.16 |
| From R$2,826.66 to R$3,751.05 | 15% | R$ 394.16 |
| From R$3,751.06 to R$4,664.68 | 22.5% | BRL 675.49 |
| Above R$4,664.68 | 27.5% | BRL 908.73 |
Source: Federal Revenue
What changes in the annual Income Tax calculation?
In addition to the monthly table, the Federal Revenue Service will also apply exemption and reduction in the annual tax calculation:
- annual exemption for anyone earning up to R$60,000 in 2026;
- gradual reduction in tax for income between R$60,000.01 and R$88.2 thousand;
- Above this amount, there is no additional discount.
The annual reduction is limited to the calculated tax, that is, it does not generate negative tax or automatic extra refund.
Annual IR exemption and reduction table
(2027 Declaration: calendar year 2026)
| Annual taxable income | Tax reduction |
| Up to R$60 thousand | Up to R$ 2,694.15, eliminating tax |
| From R$60,000.01 to R$88,200 | R$8,429.73 – (0.095575 × annual income), until zero for those earning R$88,200 |
| From R$88,200.01 | No reduction |
Source: Federal Revenue
Annual Income Tax Table in 2026
| Annual calculation basis | Aliquot | Deduction |
| Up to R$28,467.20 | Free | – |
| From R$28,467.21 to R$33,919.80 | 7.5% | R$ 2,135.04 |
| From R$33,919.81 to R$45,012.60 | 15% | BRL 4,679.03 |
| From R$45,012.61 to R$55,976.16 | 22.5% | BRL 8,054.97 |
| Above R$55,976.16 | 27.5% | R$ 10,853.78 |
Source: Federal Revenue
Minimum tax for high income
To compensate for the loss of revenue, the reform creates the Minimum Personal Income Tax (IRPFM), aimed at high incomes:
Annual income above R$600 thousand (R$50 thousand/month): falls within the rule
Progressive rate of up to 10%
Income above R$1.2 million per year: minimum effective rate of 10%
Government estimate: around 141 thousand taxpayers will be affected.
What goes into the IRPFM calculation?
- salaries;
- profits and dividends;
- income from taxable financial investments.
In relation to salaries above R$50 thousand per month, this source of income generates a discount on the IRPFM payable, even included in the calculation base. This is because Income Tax has already been deducted at source, at a rate of 27.5%.
Stay out:
- savings, Real Estate Credit Letters (LCI), Agribusiness Credit Letters (LCA), real estate funds, Fiagro and other encouraged investments;
- inheritances and donations;
- compensation for serious illness;
- capital gains on the sale of real estate, except off the stock exchange;
- late rent
- amounts received cumulatively, through legal actions;
The minimum tax will only be calculated from the 2027 declaration.
Dividend taxation
Another relevant new feature is the taxation of dividends at source:
- 10% tax withheld on dividends;
- only when they exceed R$50 thousand per month;
- amount paid by a single company to an individual.
Most investors will not be affected. The measure targets partners and businesspeople who received high amounts in dividends, which were previously exempt.
The withheld tax may be offset in the annual declaration.
Points of attention and possible disputes
Dividends relating to profits calculated until 2025 only remain exempt if the distribution has been approved by December 31, 2025.
Experts warn of possible legal challenges, due to the possible retroactive effect of the rule.
Which deductions are still valid?
Nothing changes in the main deductions:
- dependents: R$189.59 per month;
- simplified monthly discount: up to R$607.20;
- education: up to R$3,561.50 per person per year;
- annual declaration: simplified discount of up to R$17,640
How many people will benefit?
According to the federal government:
- 16 million taxpayers should benefit;
- The estimated cost of the measure is R$31.2 billion, offset by new forms of taxation on high income: IRFPM and tax on dividends above R$50 thousand per month.
