The minimum wage adjustment should be lower than expected in 2026. The government reduced the expected value for next year from R$1,631 to R$1,627. The new estimate is linked to the behavior of inflation – a component of the minimum salary adjustment formula – which should end the year below initial expectations.
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The new projections appear in documents sent by the Planning Department to Congress to support analysis of next year’s budget proposal.
Inflation preview, as measured by the IPCA-15, recorded a 0.20% increase in November, following a 0.18% increase in October. In the past 12 months, the index reached 4.5% for the first time since January, remaining within the target ceiling set by the National Monetary Council (CMN), which is 3.0%, with a margin of 1.5 percentage points up or down.
However, the inflation that is taken into account to calculate the minimum wage is measured by the National Consumer Price Index (INPC), which is scheduled to be released on the 10th. Only then will the value of the minimum wage be determined.
If confirmed, the update of the minimum wage in 2026 should be around 7.2% compared to the current minimum wage, which is R$1,518.
One of the assumptions of the rule is that the minimum is adjusted according to the INPC index for the 12 months to November of the previous year (in this case 2025). In addition, there is a real increase based on GDP two years ahead (2024), but it is limited to the expected update rate of the spending ceiling of the new fiscal framework. In other words, it cannot exceed 2.5%.
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The minimum wage is the basis for a series of payments, such as retirement, pensions and continuous pay benefits. Therefore, the value must be included in budget proposals.
But when sending the new economic projections to Congress, the Planning Department did not request a reduction in these expenditures. According to the ministry, the potential reduction will depend on parliamentarians.
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“In any case, all other things being equal, lowering the projections has the effect of reducing spending on retirement, pensions, and other benefits. However, updating the projections depends on other factors, such as variation in the beneficiary base, and it is up to Congress to evaluate the appropriateness and opportunity of changing estimates of Social Security and social expenditures during PLOA (draft budget) processing,” G1 reported.