THE Income tax table 2026 brings the most important change to the pockets of Brazilians. From this Thursday (January 1, 2026)the new exemption range comes into force, benefiting those who receive up to R$5,000.00 per month. Find out below about the new rules, prices and how the calculation will be applied in practice.
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What does the IRPF table look like?
The approved project reduces the IR to zero for those who earn up to R$5,000 per month and reduces the amount of tax charged to those who earn between R$5,000.01 and R$7,350 per month. No changes are planned for those earning more than R$7,350.
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There will be no adjustment to the general personal income tax scale. It’s like there are two tables. One for people who earn up to R$7,350 and another for those who earn more.
Who is exempt from IRPF today?
Today, the IR exemption ceiling is R$2,428.80. The new exemption bracket came into force in May. In practice, however, the exemption amounts to R$3,036 per month, the equivalent of two minimum salaries. This happens because the IRS automatically applies a simplified reduction of R$607.20 that reduces income tax to zero for those earning up to two minimums, in order to fulfill a promise by President Lula.
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With the project sanctioned by Lula, all workers earning up to R$5,000 will be exempt. And those earning up to R$7,350 will benefit from partial relief.
What does this look like for those earning up to R$7,350?
In practice, it is now as if there were two income tax scales: a systematic one for those who earn up to R$7,350 and another for those with higher income.
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See the table below for those earning up to R$7,350 per month:
2026 income tax table for those earning up to R$7,350
| Taxable monthly income | Tax reduction |
| up to R$5,000 | up to R$312.89, so that the tax due is zero |
| from R$5,000.01 to R$7,350 | R$978.62 – (0.133145 x taxable income subject to monthly incidence) so that the tax reduction decreases linearly to zero for income from R$7,350 |
In the case of people earning more than R$7,350, the income tax rate that applies to each part of the income does not change. See below:
2026 income tax table for those earning more than R$7,350
| Taxable income | Aliquot |
| Up to R$2,428.80 | – |
| From R$2,428.81 to R$2,826.65 | 7.5% |
| From R$2,826.66 to R$3,751.05 | 15.0% |
| From R$3,751.06 to R$4,664.68 | 22.5% |
| Above R$4,664.68 | 27.5% |
When does the wider IR exemption come into force?
The project provides for the entry into force of the new table on January 1, 2026.
How many people will benefit?
The change is expected to benefit 16 million citizens, including those earning up to R$5,000 and those with income up to R$7,350, who will pay less tax than today.
What will be the loss of income?
According to government technicians, the cost is estimated at 31.2 billion reais next year.
How will the loss be compensated?
A minimum tax will be created for high-income taxpayers. Foreign transfers of dividends will also be taxed. With both measures, an estimated income of 34.1 billion reais.
What will high income taxation look like?
The minimum tax will be charged on income above R$50,000 per month or R$600,000 per year. These taxpayers will be taxed progressively at rates ranging from zero to 10%. The highest rate, 10%, will only apply to those who earn more than R$1.2 million per year.
The government estimates that 141,000 taxpayers will be affected. But not everything a person earns is included in the calculation.
How will the highest income be calculated?
The calculation will take into account all of the individual’s income, which includes company profits and dividends. But the text provides for exceptions: capital gains from real estate sales are taken out of the account, except those obtained on the stock market; accrued amounts received, such as lawsuits and unpaid rent; savings income; compensation for work accidents, moral or material damage; retirement income and exemptions for illnesses such as AIDS and cancer.
Investments with securities related to infrastructure, real estate and agriculture, such as LCI and LCA, are excluded from the calculation.
Are inheritances and donations received included in the calculation?
No. The advance donation of the legitimate share (the share which goes to the heirs when made during one’s lifetime) or inheritance are exceptions. In other words, if you received an inheritance in a given year, which resulted in an income above R$600,000 for the year, you will not be taxed extra for it.
What is income tax for self-employed professionals?
Self-employed professionals whose income exceeds R$50,000 per month may be subject to a minimum tax, especially if they are self-employed, as workers with a formal contract have the tax withheld at source.
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Typically, these professionals are the only employees of their company. However, in order to avoid excessive charges for the company and the partner, the project provides for a tax reduction.
If the sum of the effective corporate income tax rate and the minimum personal tax rate exceeds 34% (for companies in general), there will be a reduction in personal dividend tax.
For banks, the combined rate cannot exceed 45% and, for other financial institutions, 40%.
What changes for dividends and investments?
The proposal establishes an IR withholding tax of 10% on the distribution of profits and dividends exceeding R$50,000 per month and on any amount abroad. Today, dividends are exempt from income tax.
Will states and municipalities suffer losses?
States and municipalities feared losses in tax transfers. The project requires the Union to automatically transfer resources, through the State Participation Fund (FPE) and the Municipal Participation Fund (FPM), to cover possible losses.
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