2026 payroll income tax: the R$5,000 exemption in practice

Up to R$5,000 of monthly income, withholding goes to zero. Between R$5,000 and R$7,350, relief is 978.62 − 0.133145 × income. Above R$7,350 only the classic table remains, with the better of the R$607.20 simplified discount or legal deductions.

First, compute the month’s INSS. Second, find the base: gross income minus the higher of legal deductions (INSS, R$189.59 per dependent and alimony) and the R$607.20 simplified discount. Third, apply the monthly progressive table: exempt up to R$2,428.80; 7.5% up to R$2,826.65 (deduction R$182.16); 15% up to R$3,751.05 (R$394.16); 22.5% up to R$4,664.68 (R$675.49); and 27.5% above that (R$908.73). Fourth, subtract the Law 15.270/2025 relief, capped at the tax computed.

• Federal Revenue: 2026 taxation tables (Portuguese)
• Law 15.270/2025 (Planalto, Portuguese)

Gross pay of R$4,000: INSS is R$368.60, below the simplified discount, so the base is R$3,392.80. The table gives R$114.76 and the relief zeroes the tax. With R$5,000 the base is R$4,392.80, the table gives R$312.89 and the relief zeroes it too. Both match the examples published by the Federal Revenue.

With R$5,500, INSS is R$571.51 and the base is R$4,892.80: the table gives R$436.79. The relief is 978.62 − 0.133145 × 5,500 = R$246.32, so withholding is R$190.47. With R$8,000, above R$7,350, there is no relief: INSS R$921.51, base R$7,078.49 and withholding R$1,037.85.

• Federal Revenue: worked examples of Law 15.270/2025 (Portuguese)

Thinking the exemption changed the table: it is unchanged, and the relief comes after it. Thinking that anyone above R$5,000 loses everything at once: at R$5,001 the computed withholding is only R$0.36, because the relief declines linearly to R$7,350.

Confusing the calculation base with the income used in the exemption test: the R$5,000 limit and the relief formula use monthly taxable income, not the already reduced base. And forgetting that the simplified discount and legal deductions do not add up: the more favourable one applies.