The Brazilian Income Tax (Imposto de Renda or IR) for 2025 presents a complex landscape for taxpayers. While the exemption threshold remains at R$ 2,259.20, a simplified discount allows for exemption on income up to R$ 2,824.00. Despite expectations of a higher exemption for salaries up to R$ 5,000, this change wasn't implemented in the Annual Budget Law Project (PLOA). This article aims to clarify these changes, outlining who qualifies for exemption and how these adjustments affect tax calculations and personal finances. Understanding these rules is paramount for effective budget planning.
Unpacking the 2025 Income Tax Table: What Has (and Hasn't) Changed
The 2025 Income Tax table retains the R$ 2,259.20 exemption threshold. However, taking into account the two minimum wage quota for simplified declaration, the exemption extends to R$ 2,824.00. This means that individuals choosing the simplified deduction method can effectively avoid income tax on earnings up to this amount. While the government had expressed intentions to raise the exemption threshold to R$ 5,000 per month, this proposed change has not yet materialized in the current tax regulations. A provisional measure published in May altered the exemption threshold for 2025 to R$ 2,428.80. However, calculations based on this updated figure will only be applicable for income tax returns filed in 2026. Staying informed about updates to tax legislation is crucial for taxpayers to plan their finances appropriately and fulfill their fiscal obligations.
Navigating the 2025 Progressive Income Tax Table: Monthly and Annual Calculations
The Income Tax is a federal tax levied on individuals earning above a certain annual income. The tax rate is progressive, meaning it increases with income. The IR table is therefore essential for understanding the amount of tax payable on salaries and investments.
Monthly Calculation Basis
The table below illustrates the progressive IR rates for monthly income calculation for the 2025 tax year (calendar year 2024).
| Income Bracket (R$) | Rate (%) | Deduction (R$) |
|---|---|---|
| Up to R$ 2,259.20 | 0 | 0 |
| R$ 2,259.21 to R$ 2,826.65 | 7.5 | R$ 169.44 |
| R$ 2,826.66 to R$ 3,751.05 | 15 | R$ 381.44 |
| R$ 3,751.06 to R$ 4,664.68 | 22.5 | R$ 662.77 |
| Above R$ 4,664.68 | 27.5 | R$ 896.00 |
- Exempted Pension Income (for those over 65 years old): R$ 1,903.98
- Monthly Deduction per Dependent: R$ 189.59
- Monthly Simplified Discount Limit: R$ 564.80
Annual Calculation Basis
The table below provides the progressive IR rates for calculating annual income tax for the 2025 tax year (calendar year 2024).
| Income Bracket (R$) | Rate (%) | Deduction (R$) |
|---|---|---|
| Up to R$ 26,963.20 | Exempt | R$ 0.00 |
| R$ 26,963.21 to R$ 33,919.80 | 7.5 | R$ 2,022.24 |
| R$ 33,919.81 to R$ 45,012.60 | 15 | R$ 4,566.23 |
| R$ 45,012.61 to R$ 55,976.16 | 22.5 | R$ 7,942.17 |
| Above R$ 55,976.16 | 27.5 | R$ 10,740.98 |
In addition, a simplified optional discount of R$ 564.80 is available, ensuring exemption for incomes up to two minimum wages, totaling R$ 2,824.00 per month. This effectively exempts contributors earning up to R$ 2,824.00 monthly from income tax.
- Annual Deduction per Dependent: R$ 2,275.08
- Annual Limit for Education Expenses: R$ 3,561.50
- Annual Simplified Discount Limit: R$ 16,754.34
Understanding Regressive Income Tax Tables for Investments
The regressive income tax table is mainly used for long-term investments, such as private pension plans (PGBL and VGBL) and certain investment funds. It does not apply to salaries, rents or other taxable income.
Long-Term Funds and Fixed Income Investments
The table below applies to long-term funds and fixed income investments.
| Rate | Term |
|---|---|
| 22.5% | Up to 180 days |
| 20.0% | 180 to 360 days |
| 17.5% | 361 to 720 days |
| 15.0% | Over 720 days |
Short-Term Funds
The table below applies to short-term funds.
| Rate | Term |
|---|---|
| 22.5% | Up to 180 days |
| 20.0% | Over 180 days |
Profit and Results Sharing (PLR)
The table below shows the Profit and Results Sharing from February 2024.
| Annual PLR | Rate | Deduction |
|---|---|---|
| R$ 0.00 to R$ 7,640.80 | - | - |
| R$ 7,640.81 to R$ 9,922.28 | 7.5% | R$ 573.06 |
| R$ 9,922.29 to R$ 13,167.00 | 15.0% | R$ 1,317.23 |
| R$ 13,167.01 to R$ 16,380.38 | 22.5% | R$ 2,304.76 |
| Above R$ 16,380.38 | 27.5% | R$ 3,123.78 |
Remittances Abroad
The table below shows the rates for Remittances Abroad.
| Rate | Type |
|---|---|
| 25% | Income from work, retirement, death or disability pension, and the provision of services to non-residents. |
| 15% | Other income from sources located in Brazil. |
Other Incomes
The table below shows the rates for other incomes.
| Rate | Type |
|---|---|
| 30% | Prizes and sweepstakes in cash. |
| 20% | Prizes and sweepstakes in goods and services. |
| 1.5% | Advertising services and remuneration for professional services. |
Determining Income Tax Obligations: Exemption and Calculation Examples
The exemption range for Income Tax changed in February 2024, offering full exemption for those earning up to R$ 2,824 per month. This is due to the updated progressive table, with an exemption range of R$ 2,259.20. A simplified discount of 25% (R$ 564.80) is automatically applied to incomes up to R$ 2,824, bringing the final calculation base to R$ 2,259.20 and ensuring these contributors remain within the exemption limit. If your taxable income exceeds R$ 2,259.20, you are required to file an Income Tax return. To illustrate the calculation, consider a gross salary of R$ 4,500.00. After applying the simplified deduction of R$ 564.80, the taxable base becomes R$ 3,935.20. Applying the corresponding tax rates, the Income Tax deduction is R$ 223.15.
The Proposed R$ 5,000 Exemption: A Look at the Future (2026)
Project Law (PL) 1.087/2025A, suggesting an Income Tax exemption up to R$ 5,000, was approved on July 16, 2025. This symbolic vote took place in the Special Committee of the Chamber of Deputies which analyzes the text, which will probably be voted on in the House plenary in August. However, this proposal was not included in the 2025 IR table. If approved, it will take effect in 2026. Unafisco simulated the new IR table with this exemption, showing rates from 7.5% to 27.5% for income above this limit.
Answering Key Questions: Aliquots, Deductions, and Effective Rates
Several key terms are crucial for understanding the Brazilian Income Tax system.
- Aliquot: The percentage of tax charged on income. The higher the salary, the higher the rate applied in IR. For investments, the longer the money stays invested, the lower the tax.
- Deduction: A fixed discount that reduces the final tax amount, ensuring fairer and more proportional taxation. This mechanism adjusts the tax amount due, making the tax system more progressive.
- Effective Rate: The actual percentage applied to the total income. It varies according to deductible expenses, donations, dependents, and other information provided in the annual declaration. The effective IR rate can be calculated using the Income Tax effective rate calculator available on the Federal Revenue Service website.
- Progressive Table Functionality: The progressive Income Tax table defines income brackets, applying higher tax rates as income increases. The tax is calculated in stages, meaning tax is only charged on the portion of the salary that exceeds each bracket.
- Regressive Table Functionality: The regressive Income Tax table incentivizes long-term investments. The longer the money remains invested, the lower the rate charged upon withdrawal.
Income Tax on Investments: A Matter of Time
As your investments generate capital gains, some of them are subject to IR. The advantage of investments is that the tax rate decreases for those who have invested for a longer period. The percentage of the rate charged is defined by the application time as shown in the table below.
| Investment time | IR rate applied on the investment income |
|---|---|
| Between 0 and 180 days | 22.5% |
| Between 181 and 360 days | 20% |
| Between 361 and 720 days | 17.5% |
| More than 720 days | 15% |
CDB Income Tax Regressive Table
The CDB (Bank Deposit Certificate) is a fixed income security issued by banks to attract capital to finance the issuer's activities. All CDBs are subject to Income Tax, so it is important that you pay attention to this when investing. You can check the CDB's regressive IR table below:
| Investment time | IR rate applied on the investment income |
|---|---|
| Between 0 and 180 days | 22.5% |
| Between 181 and 360 days | 20% |
| Between 361 and 720 days | 17.5% |
| More than 720 days | 15% |
Key Income Tax Timeline: Recent Updates and Current Validity
In 2025, the Income Tax table underwent changes with the update of the exemption range that came into effect in May, through Provisional Measure No. 1.294/2025. However, these changes will only be valid in the IR declarations made in 2026. Before that, the last adjustment of the Income Tax table happened in 2024; and previously, it occurred in 2015 (Law 13.149/15). The current valid IR table is the one whose new exemption range rose in May 2025, from R$ 2,259.20 to R$ 2,428.80 per month, or effectively R$ 3,036.00 with the simplified discount, equivalent to two minimum wages. These values should be considered for the IR declarations to be carried out in 2026, considering the year 2025.
2026 Income Tax Progressive Table
The table below shows the progressive IR table for the monthly IR calculation basis in the 2026 fiscal year (calendar year 2025).
| Income Bracket (R$) | Rate (%) | Deduction (R$) |
|---|---|---|
| Up to R$ 2,428.80 | 0 | 0 |
| R$ 2,428.81 to R$ 2,826.65 | 7.5 | R$ 182.16 |
| R$ 2,826.66 to R$ 3,751.05 | 15 | R$ 394.16 |
| R$ 3,751.06 to R$ 4,664.68 | 22.5 | R$ 675.49 |
| Above R$ 4,664.68 | 27.5 | R$ 908.75 |
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