IRS 2025: what changes and what remains

The IRS system has been adjusted to keep up with economic changes and respond to taxpayers' needs. In 2025, these changes become especially relevant with the updating of the levels, the increase in the minimum existence and the new withholding tax tables.

Next, learn about the main news of the IRS for 2025, and find out how these changes may impact your budget and the measures taken to mitigate the effects of inflation on disposable income for households.

What will change in the 2025 IRS?

In 2024, IRS retention tables were adjusted twice to compensate for excessive withholdings and reflect changes in legislation. In the months of September and October, the Government implemented temporary tables that exempted workers with gross wages of up to 1,175 euros and pensioners with incomes of up to 1,202 euros.

From November, new tables came into force without retroactive effect, applying the IRS rates approved for the rest of the year. These changes allowed punctual financial reliefs and adjusted the amounts withheld at source.

For 2025, the new withholding tax tables were released, applicable to income from dependent work and pensions of taxpayers residing on the mainland. These tables maintain alignment with current legislation and reinforce the commitment to ease the tax burden on lower incomes.

To assess the impact of the new rates, you should simulate the net salary to assess the impact of the new rates and understand the changes introduced. We'll see an example below.

IRS steps in 2025

Since 2022, the IRS has had nine levels, as a result of the unfolding of the previous seven, allowing a significant reduction in the tax payable. This change included a reformulation of the third and sixth level, which now have lower marginal and average rates, benefiting taxpayers with income in these intervals.

For 2025, the values of the levels were updated by 4.6%, following the inflation rate expected for this year. The measure hopes to ensure that the goal of paying less IRS is achieved, even in a context of rising prices. The new taxable income ranges came into force in early January, with the IRS settlement for 2024 income.

How much will I pay from IRS in 2025?

To know how much you will pay from IRS, you should consult the levels defined in the IRS Code, article 68.º. The tax is calculated based on the collectible income and divided into two parts:

First part: value that covers the entirety of a step, to which the average rate applies;

Second part: surplus that enters the next step, to which the normal rate applies.

Learn more here!

Source: Idealista