The IRS withholding tax, which was in place in May and June to offset an additional 1% increase in government employees, will result in some workers at the bottom of the table being tax deducted.
Civil servants’ base pay will increase from the current €761.58 gross to €769.20 gross after an additional 1% increase starting in May, prompting the government to change the IRS withholding tables.
The goal was to update the IRS tables “so that there is no loss of liquidity due to wage increases,” Secretary of State for Public Administration Ines Ramirez pointed out in negotiations with unions.
When income tax was applied in April, salaries up to €762 were exempt from the monthly tax deduction, meaning that civil servants who were at the bottom of the payroll were not withheld by the IRS.
In the published tables, this tax exemption is set at 765 euros, so the minimum wage of civil servants (769.2) is no longer exempt, especially for those without dependents. However, the net monthly amount you will receive from May is higher.
A lone civil servant with no dependents on a salary of €761.58 gross earned €651.16 monthly in April net – after deductions from the Caixa Geral de Aposentação and ADSE, as he does not withhold the IRS.
As of May, this worker will earn €769.2 gross per month, earning €653.67 in net terms – after discounts on CGA, ADSE and the 0.6% rebate that he begins to make at the expense of the IRS.
The new IRS tables and the corresponding new minimum exemption also mean that all government employees who earn the aforementioned €769.2 gross per month and who, while single, subsequently have up to one dependent, are exempt from the tax.
In the case of a married couple with a single owner, withholding tax is charged if there are no dependents.
For a couple in which both spouses earn income, there is a withholding tax for two dependents and then an exemption from the aforementioned monthly remuneration.
Monthly withholding amounts must be returned for the year with the filing of an annual IRS return through collection royalties.
From July, a new income tax model will apply, which follows the logic of the tax structure applied during the annual assessment.