Income Tax 2025: New Table, Rates & Calculation Guide

The 2025 Income Tax brought important changes to taxation brackets and the exemption range. For salaried workers, these changes directly impact monthly payroll deductions.

The new progressive table expanded the exemption range and adjusted rates, primarily benefiting workers earning up to R$ 5,000. Understanding these changes is essential for planning your finances and verifying that deductions are correct.

2025 Income Tax Table

New brackets and rates

The 2025 IR table features five taxation brackets with progressive rates. The higher the income, the greater the percentage deducted on amounts exceeding each bracket.

Exemption limit

The exemption bracket rose to R$ 2,824.00, representing an increase from the previous year. This means those earning up to this amount don’t pay withholding income tax.

For higher salaries, IR applies only to amounts exceeding R$ 2,824.00. For example, someone earning R$ 3,000.00 pays tax only on R$ 176.00.

How to use the table

The calculation uses the amount to deduct system to simplify applying progressive rates. Simply multiply the salary by the corresponding rate and subtract the fixed amount.

Example: Salary of R$ 4,000.00 → 15% × R$ 4,000.00 = R$ 600.00 → R$ 600.00 - R$ 492.58 = R$ 107.42 IR

How to calculate withholding IR

Calculation base

Income Tax applies to the calculation base, which is gross salary minus legal deductions. The main deductions are:

• INSS (social security): Social security contribution (up to R$ 908.85 in 2025)
• Alimony: Full amount determined by court order
• Dependents: R$ 189.59 per legal dependent

Allowed deductions

Besides INSS, you can deduct other amounts from the calculation base:

• Private pension contributions (up to 12% of gross income)
• Court-ordered alimony (full amount)
• Legal dependents (R$ 189.59 each)

The dependent deduction is automatic on payroll, as long as it’s reported to the company’s HR. Each child under 21 or spouse without independent income generates a monthly deduction.

Step-by-step calculation

1. Calculate INSS deduction on gross salary
2. Subtract INSS from gross salary (= calculation base)
3. Subtract R$ 189.59 for each dependent
4. Apply the rate from the table to the final base
5. Subtract the corresponding amount to deduct

Use our Income Tax calculator to perform this calculation automatically and verify if your payroll deductions are correct.

Changes from 2024

Net salary impacts

The main changes benefited workers in lower income brackets. The increase in exemption to R$ 2,824.00 removed thousands of taxpayers from taxation.

Change comparison:

• Exemption bracket: increased from R$ 2,640.00 to R$ 2,824.00
• Dependent deduction: maintained at R$ 189.59
• Rate structure: remained the same (7.5%, 15%, 22.5%, 27.5%)

Monthly savings by bracket

Workers earning between R$ 2,640.01 and R$ 2,824.00 became exempt, generating savings of up to R$ 13.80 per month.

For higher incomes, savings are smaller but still provide monthly tax relief.

Main deductions

Dependents and pension

Dependent deduction remains one of the main ways to reduce IR. Each legal dependent reduces the monthly calculation base by R$ 189.59.

Valid dependents include:

• Children under 21
• University students up to 24
• Spouse without independent income
• Financially dependent elderly parents

Private pension

Contributions to PGBL (Free Benefit Generator Plan) can be deducted up to 12% of annual gross income. This deduction doesn’t apply to monthly withholding IR, only the annual tax return.

For those with private pensions, it’s important to plan contributions to maximize tax benefits in the annual return adjustment.

Calculation examples

Different salary brackets

Example 1 - Salary R$ 3,500.00 (no dependents):

• INSS: R$ 311.82
• Calculation base: R$ 3,188.18
• IR: 7.5% × R$ 3,188.18 - R$ 211.80 = R$ 27.42

Example 2 - Salary R$ 5,000.00 (1 dependent):

• INSS: R$ 550.00
• Base: R$ 4,450.00 - R$ 189.59 = R$ 4,260.41
• IR: 15% × R$ 4,260.41 - R$ 492.58 = R$ 146.48

Impact of dependents

With 2 dependents, the second example would be:

• Base: R$ 4,450.00 - (2 × R$ 189.59) = R$ 4,070.82
• IR: 15% × R$ 4,070.82 - R$ 492.58 = R$ 118.04
• Monthly savings: R$ 28.44

Each additional dependent can generate significant savings, especially for those in the 15% and 22.5% brackets.

Tax planning

Strategies to reduce IR

Tax planning begins with controlling legal deductions. Maximizing private pension contributions and keeping dependents updated in the system are basic strategies.

For those with variable income, like commissioned workers, it’s worth concentrating deductible expenses (health plans, education) at year-end to boost refunds.

Document organization

Keep organized receipts for:

• Health and education expenses
• Pension contributions
• Dependents and alimony
• Donations to controlled funds

Monthly simulations

Regularly use the Income Tax calculator to simulate different scenarios and plan your tax strategy throughout the year.

Frequently Asked Questions

What’s the IR exemption limit in 2025?

The exemption limit is R$ 2,824.00 monthly. Those earning up to this amount don’t pay withholding income tax.

How do I calculate IR deducted from payroll?

Subtract INSS and dependent deductions from gross salary. On this amount, apply the table rate and subtract the corresponding amount to deduct.

How many dependents can I claim to reduce IR?

There’s no numerical limit, but dependents must meet legal criteria: children under 21 (24 if university students), spouse without independent income, financially dependent elderly parents, among others.

Does private pension reduce monthly IR?

No. Private pension deduction (PGBL) applies only to the annual tax return, not monthly payroll deductions.

What changed in the 2025 IR table?

The main change was increasing the exemption bracket from R$ 2,640.00 to R$ 2,824.00. Rates and other brackets were adjusted for inflation.

How can I verify if my IR deduction is correct?

Compare the amount deducted on payroll with manual calculation using the table, or use an online calculator to confirm. Calculation errors are more common than you’d think.

Can I change the number of dependents during the year?

Yes. Report changes in dependent numbers to company HR to adjust monthly deductions. Births, marriages, and other changes should be reported immediately.