"When, for any reason, the new withholding tax tables have not been applied in September, the amounts withheld in excess in September compared to what would result from the application of the new tables should be deducted from the amount of IRS to be withheld in October", says the Ministry of Finance in a response to Lusa.

The Ministry headed by Miranda Sarmento adds that, if the adjustment cannot be made “in whole or in part” 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 at the end of August and which were designed to accommodate the changes to the tax, approved by parliament.

These changes include a reduction in the rates that apply to the first six tax brackets, the 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 tax models: one, with lower rates, to be applied in the months of September and October, and another in the remaining months of the year, with the first being designed to compensate workers and pensioners for the tax that was withheld between January and August.

This compensation may result in many workers and pensioners not having to withhold any tax at source this month (and next month) or having a significantly lower amount withheld than they are used to. From November onwards, there will also be some difference compared to the amounts withheld in the first eight months of this year, but it will be less significant 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, with adjustments having to be made in the following months.

In statements to Lusa, the secretary-general of the Federation of Public Administration Trade Unions (Fesap), José Abraão, said he was not aware of any sectors of the public service that are not 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.

“From November onwards, the difference in income [compared to what they received between January and August] is small and, therefore, people should be prepared for this and also for having a smaller refund or even tax to pay next year”, highlighted the union leader. It should be noted that, in the case of pensioners, the IRS adjustment will only be made from October onwards, regardless of whether the pension is paid through Social Security or the General Pensions Fund (CGA).