Do you earn 1.5 minimum wage? Income tax exemption may expire

In the coming years, workers earning one-and-a-half minimum wages may not get exemption from individual income tax (Income tax). What happens is that the National Congress, through the Budget Guidelines Act 2023, has approved an increase in the minimum wage by R$82, from R$1,212 to R$1,294.

Currently , Minimum wage and a half (1212 Brazilian Real + 606 Brazilian Real) equals 1,818 Brazilian Real. Everyone who receives this amount is exempt from tax. However, if the value increases next year, the same calculation for the minimum wage and half would be R$1,941, which is a taxable amount. The monthly deductions for the worker’s salary will be 2.77 BRL.

Infrared table without correction

The IRPF schedule, uncorrected since 2015, provides an exemption for resources up to R$1,903. In the same year, the last review, the state’s minimum wage was R$788, with tax expected to be paid for those who showed income above 2.4 minimum wage per month.

Despite congressional approval of LDO, data from the Ministry of Economy shows that the national floor in 2023 could be even higher, with values as high as R$1,310. Thus, if the IRPF schedule remains unchanged, those earning one and a half minimum wages will pay R$4.57 in tax, which will be deducted directly from the payroll.

Brazilians should not pay IRPF

According to a study by Unafisco Nacional, about 15.3 million Brazilians should not have paid IRPF 2022. This could have been avoided if the tax schedule had been accumulating due to inflation since 1996.

As the entity explains, the scope of the exemption should include citizens receiving up to R$4,400 per month. The value is not conflicting compared to the current value of R$903.98. Without the use of corrections, the amount paid by millions of Brazilians has already reached R$164.5 billion this year alone.

According to Unafisco, the same amount can be obtained by increasing taxes on large fortunes, dividends and dividends.