Income Tax 2025: New Tax Brackets and How to Calculate
Complete guide to Income Tax 2025 in Brazil: new progressive table, exemption limits, deductions, and practical calculation examples with tips.
The 2025 Income Tax brought important changes that affect millions of Brazilians. The new progressive table, with updated tax brackets, significantly alters the IR calculation for CLT (labor law) workers, freelancers, and retirees.
Understanding these modifications is essential to correctly calculate the tax owed and avoid problems with the Federal Revenue Service. In this complete guide, you’ll learn all the details about the new rules and how to apply them in practice.
What changed in the 2025 Income Tax
New rates and brackets
The 2025 IRPF (income tax) rates underwent adjustments to keep pace with inflation and government fiscal policies. The progressive structure was maintained, but with updated values in the tax brackets.
The main changes include:
- Adjustment of income bracket limits
- Maintenance of the five progressive rates
- Update of deductible amounts
Updated exemption limit
The 2025 exemption limit was set at R$ 2,824.00 monthly. This means that those who earn up to this amount don’t pay withholding Income Tax.
For annual income, the exemption limit corresponds to R$ 33,888.00. Amounts above this bracket are subject to taxation according to the progressive table.
How to calculate IR step by step
Calculation of tax owed
Income Tax calculation follows a simple progressive methodology. First, you identify which bracket your income falls into on the official table.
Next, apply the corresponding rate on the amount that exceeds the previous bracket’s limit. Finally, subtract the specific deductible amount for your bracket.
Example: Income of R$ 4,500 → apply 15% on R$ 1,676 (excess) → subtract R$ 423.48 (deductible amount)
Allowed deductions
The 2025 IR deductions allow you to legally reduce the tax owed. The main categories include:
- Dependents: R$ 2,275.08 per dependent
- Supplementary pension: Up to 12% of annual income
- Medical expenses: Full amount without limit
- Education: Up to R$ 3,561.50 per person
- Official social security: INSS (social security) contributions
2025 progressive table
| Monthly Income Bracket | Rate | Deductible Amount |
|---|---|---|
| Up to R$ 2,824.00 | Exempt | - |
| From R$ 2,824.01 to R$ 4,664.68 | 15% | R$ 423.48 |
| From R$ 4,664.69 to R$ 9,922.28 | 22.5% | R$ 772.78 |
| From R$ 9,922.29 to R$ 12,318.70 | 27.5% | R$ 1,269.28 |
| Above R$ 12,318.70 | 30% | R$ 1,577.18 |
To make your calculations easier, use our Income Tax calculator which already considers all 2025 updates.
How to use the table in practice
First identify your monthly taxable income. This amount is obtained after deducting mandatory contributions like INSS and supplementary pension.
Next, locate the corresponding bracket in the table and apply the calculation: (Income - Lower bracket limit) × Rate - Deductible amount.
Practical calculation examples
Example 1: Salary of R$ 3,500
For a salary of R$ 3,500 monthly, the calculation follows these steps:
Calculation: R$ 3,500 - R$ 2,824 = R$ 676 → R$ 676 × 15% = R$ 101.40 → R$ 101.40 - R$ 423.48 = Exempt
Since the result is negative, there’s no tax to pay in this bracket.
Example 2: Salary of R$ 6,000
For a salary of R$ 6,000 monthly:
Calculation: R$ 6,000 in the 22.5% bracket → (R$ 6,000 - R$ 4,664.68) × 22.5% = R$ 300.45 → Final tax: R$ 300.45
Example 3: Salary of R$ 10,000
For a salary of R$ 10,000 monthly:
Calculation: R$ 10,000 in the 27.5% bracket → (R$ 10,000 - R$ 9,922.28) × 27.5% + taxes from previous brackets → Final tax: R$ 1,639.22
Tips to pay less tax
Maximize legal deductions
Organize all deductible expense receipts throughout the year. Keep medical receipts, education receipts, and dependent documents in separate files.
Consider hiring a supplementary pension plan to reduce the calculation base. The deduction limit of 12% of annual income can generate significant savings.
Annual tax planning
Distribute medical and educational expenses throughout the year. Concentrating all expenses in just a few months may not optimize deductions.
For freelancers and liberal professionals, consider:
- Opening a MEI (micro-entrepreneur) when possible
- Maximum contribution to pension
- Organization of professional expenses
Use digital tools
Sethian’s Income Tax calculator allows you to simulate different scenarios and find the best strategy for your specific situation.
Test variations with different values for dependents, medical expenses, and pension contributions to identify the combination that results in lower tax.
Frequently Asked Questions
When should I file my Income Tax return in 2025?
The deadline for submitting the 2025 IRPF return runs from March 1 to May 31, 2025. Those entitled to refunds should file early to receive them sooner.
What’s the exemption limit for filing IR in 2025?
Must file those who received above R$ 33,888.00 in taxable income during 2024, or those who fall under other obligations such as owning assets above R$ 800,000.
Can I deduct gym and psychologist expenses?
Gym expenses are not deductible, but psychologist expenses are, as long as it’s a registered professional. Always keep receipts with the professional’s CPF and complete information.
How does dependent deduction work?
Each dependent allows a deduction of R$ 2,275.08 annually (R$ 189.59 monthly). Includes children up to 21 years old, spouse without income, and elderly parents you financially support.
What happens if I don’t file on time?
The late penalty is R$ 165.74 minimum or 1% per month on the tax owed, limited to 20% of the IR owed. File even if late to avoid bigger problems.
How long do I need to keep receipts?
Keep all receipts for 5 years after filing the return. The Federal Revenue Service may request documentation during this period in case of audit.
How do I know if I’m under audit?
Regularly check your return statement on the Federal Revenue Service website. Inconsistencies between declared expenses and presented receipts are the main reason for audit retention.