Earners of €1,250 to pay €1, while those earning €3,000 will fork out €95 in pension contributions.
In a move to compensate for overwithholding earlier in the year, the Portuguese government has introduced lower withholding tax deductions for August and September 2025. This temporary relief aims to increase net pensions and salaries during these two months.
The Social Security and the General Pensions Fund (CGA) will process August pensions according to the new IRS tables, which have been officially published earlier in the year. As a result, a pensioner receiving 3,000 euros will have a withholding of 95 euros in August and September, compared to the current 715 euros. Similarly, a pensioner receiving 1,750 euros will have a withholding of 14 euros in August and September, compared to the previous 231 euros.
However, the good news is temporary. From October 2025, new withholding tax tables will apply again, raising the amounts deducted monthly. Nevertheless, the increase will be smoother compared to the previous correction in July. The withholding tax rates themselves are based on the updated IRS brackets and Social Support Index (IAS) for 2025, as set by Order no. 236-A/2025 of 6 January.
For a pension of 2,000 euros, the withholding amount will be 288 euros per month, while for a pension of 1,750 euros, the withholding amount will be 216 euros per month. From October to December, the withholding rates for pensioners will be higher than in August and September, but still lower than the rates from January to July of the current year.
Pensioners receiving up to 1,116 euros monthly will not have any withholding in August and September. Single or married pensioners with a spouse earning income will have withholding only on pensions above 1,116 euros. The withholding rate for pensioners receiving between 1,117 euros and 1,581 euros is less than 10 euros in August and September.
It is important to note that if entities paying salaries and pensions cannot apply the special tables in August and September, they can correct the values of withholdings until the end of the year. Both Social Security and Caixa Geral de Aposentações will apply the new tables already in August.
The government's decision to lower withholdings in August and September is part of its plan to compensate for the mid-year reduction of IRS. The aim is to provide some financial relief to pensioners during these months while maintaining a balanced approach to taxation.
Sources: [1] Diário da República, Ordem n.º 236-A/2025, de 6 de Janeiro [2] Governo de Portugal, Comunicado de Imprensa, 1 de Abril 2025 [4] Secretaria de Estado da Receita, Notícia, 15 de Maio 2025
What is the withholding tax rate for a pensioner receiving 3,000 euros in August and September, according to the new IRS tables for personal finance?
For those seeking to manage their personal finances wisely, it's worth remembering that the financial relief provided by the Portuguese government in August and September 2025 is only temporary, and higher withholding tax rates will apply again from October.
