Income tax exemption up to R$5,000: what changes on payslips and the 13th

Since January 1, 2026, employees in Brazil with up to R$5,000.00 a month in taxable income no longer have income tax withheld from their pay. The change comes from Lei nº 15.270/2025, signed into law on November 26, 2025, which created a tax reduction — full up to R$5,000 and partial up to R$7,350.00 — that also applies to the 13th salary (a mandatory year-end bonus under Brazilian law). With the 13th salary coming up and the 2027 tax return ahead, here is how the rule shows up on payslips and what payroll teams need to check.

How the reduction works

The law did not touch the brackets of the monthly progressive table used for IRRF (income tax withheld at source), which have been the same since May 2025: exempt up to R$2,428.80 and a top rate of 27.5% above R$4,664.68. What changed is a new reducer, applied after the regular calculation (art. 3-A of Lei nº 9.250/1995, added by Lei nº 15.270):

Taxable income in the month	Tax reduction
Up to R$5,000.00	Up to R$312.89, so that the tax due is zero
R$5,000.01 to R$7,350.00	R$978.62 − (0.133145 × taxable income)
Above R$7,350.00	No reduction

Two details matter for payroll:

• The bracket is checked against gross income. In the examples published by the Receita Federal (Brazil's federal tax authority), the reduction table uses the salary, not the tax base after INSS (the employee's social security contribution), dependents or the simplified deduction. Overtime, night-shift premiums and other taxable pay in the month all count.
• The reduction never exceeds the tax calculated. It zeroes or lowers the withholding without creating a credit for the worker.

Who is affected

The rule covers all income subject to the monthly table: CLT employees (formal workers under Brazil's Consolidated Labor Laws), public servants, retirees and pensioners. According to Agência Brasil, the Ministry of Finance estimates about 16 million beneficiaries. In security, cleaning and facilities outsourcing, premiums and overtime put many salaries close to the limit: a month with more overtime can go above R$5,000 and trigger a small withholding.

Watch out for people with two jobs: each employer applies the reduction separately, and the combined income may result in tax due on the annual return.

Timeline

Date	What happens
Nov 26, 2025	Lei nº 15.270 is signed into law
Jan 1, 2026	Monthly reduction applies to income paid from this date; withholding on dividends begins
Sep 17, 2026	Senate bill PL 5.397/2026 proposes indexing the reduction tables to the IPCA (official inflation index)
Nov 23, 2026	eSocial (the government's digital labor reporting system) starts checking dependents' CPF (taxpayer ID) numbers in event S-1210 against the tax authority's database
By Dec 18, 2026	Second installment of the 13th salary, the first year-end 13th with the reduction
February 2027	2026 income statement (informe de rendimentos), by the last business day

Payslip examples

Assumptions: 2026 INSS table, no dependents or other deductions; payroll uses whichever is more favorable between legal deductions and the monthly simplified deduction of R$607.20.

	Salary of R$4,800.00	Salary of R$6,000.00	Salary of R$8,000.00
INSS	R$473.51	R$641.51	R$921.51
Deduction used	Simplified: R$607.20	INSS: R$641.51	INSS: R$921.51
Tax base	R$4,192.80	R$5,358.49	R$7,078.49
Tax per table	R$267.89	R$564.85	R$1,037.85
Reduction	R$267.89	R$179.75	R$0.00
Income tax withheld	R$0.00	R$385.10	R$1,037.85

• R$4,800.00: the reducer of up to R$312.89 absorbs all the tax. In December 2025, the same salary had R$267.89 withheld.
• R$6,000.00: the reduction is R$978.62 − (0.133145 × R$6,000.00) = R$179.75. The formula uses the gross R$6,000.00, not the R$5,358.49 base.
• R$8,000.00: above R$7,350.00, nothing changes.

13th salary, vacation pay and PLR

13th salary. Tax on the 13th is withheld exclusively at source and calculated separately, and the law expressly extends the reduction to it (art. 3-A, § 3). A 13th of up to R$5,000.00 is tax-free; one of R$6,000.00 follows the example above, with R$385.10 withheld. Deadlines and the calculation with averages are covered in our guide to the 2026 13th salary.

Vacation pay. Tax on vacation pay and the constitutional one-third vacation bonus is calculated separately from other income in the month, using the monthly table (Income Tax Regulation, art. 682), so it is also covered. The law does not address salary and vacation pay paid in the same month: confirm the setup with your payroll software provider.

PLR. Profit-sharing (PLR, participação nos lucros ou resultados) keeps its own exclusive annual table, exempt up to R$8,214.40 in the version in force since May 2025, according to the Receita Federal. The law extended the reduction to the 13th, but not to PLR.

The 2027 tax return and the offsets

On the 2027 IRPF (personal income tax) return, covering calendar year 2026, there is an annual reduction: taxable income of up to R$60,000.00 is tax-free, and between R$60,000.01 and R$88,200.00 the reducer is R$8,429.73 − (0.095575 × income). The cap on the annual simplified deduction rises to R$17,640.00. The 13th, taxed exclusively at source, stays out of this calculation.

To offset the revenue loss, the law created a minimum tax on incomes above R$600,000 a year, with a rate that rises to 10% at R$1.2 million or more, first assessed on the 2027 return. It also created a 10% withholding on the total profits and dividends paid in a month by the same company to the same individual, when they exceed R$50,000.

The reduction amounts are not indexed to inflation. PL 5.397/2026, by Senator Esperidião Amin, proposes updating them every year by the IPCA from 2027 and was awaiting referral in the Senate at the end of September; Lei 15.270 itself requires the Executive branch to send Congress, within one year, a bill setting a policy for updating income tax amounts. For now, nothing changes in payroll.

What employees should check on their payslip

• Income tax line (IRRF): with up to R$5,000.00 of taxable income in the month, it should be zero. Some systems show the reduction separately; others show only the final tax.
• Total taxable pay for the month: add up salary, overtime and premiums; that total determines the reduction.
• Dependents: each one deducts R$189.59 from the base. Keep their CPF numbers up to date with HR, since eSocial will validate them.
• Two jobs: set aside part of your income for possible tax on the annual return.
• Income statement: in February 2027, compare it with your payslips. In the 2026 tax season, the Receita Federal attributed many inconsistencies in pre-filled returns to payroll items misclassified in eSocial, such as salary, 13th salary and vacation pay.

In TIRVU+, which integrates with the payroll system, payslips reach the employee's app through the employee portal, with an electronic signature valid under ICP-Brasil (Brazil's public key infrastructure), and HR can post announcements explaining the change.

What to do now

• Confirm with your payroll provider that the reduction uses gross taxable income for the month and is capped at the tax calculated
• Simulate the second installment of the 13th with the reduction before closing December payroll
• Define and document how vacation pay is handled when it falls in the same month as salary
• Review payroll item codes and check income and withholding in event S-1210, the basis of the income statement
• Update dependents' CPF numbers before November 23, 2026, as set out in eSocial Technical Note S-1.3 No. 07/2026
• If the company distributes profits, withhold 10% of the total paid in the month to any partner who receives more than R$50,000 and report it in EFD-Reinf (the federal withholding reporting system)
• Communicate with employees, especially those with a partial reduction or two jobs

Frequently asked questions

Does someone earning R$5,200.00 lose the whole exemption?

No, the reduction phases out gradually. Under the same assumptions as the examples, the tax per table would be R$357.89 and the reduction R$286.27, leaving R$71.62 withheld.

Do employees need to apply for the exemption?

No. The employer applies the reduction automatically to the withholding; the annual return remains mandatory for anyone who meets the filing rules.

Is income tax on the 13th also zeroed?

Yes, up to R$5,000.00, with a partial reduction up to R$7,350.00: the law applies the same reduction table to the exclusive taxation of the 13th.

Conclusion

Lei 15.270 changed the payslips of millions of workers without changing the income tax table: the reduction comes after the regular calculation and looks at gross monthly income. For payroll teams, the end of the year concentrates the risks — the 13th, vacation pay, dependents and the eSocial data that feed the income statement and the 2027 return. In specific cases, such as two jobs or profit distributions, also validate the calculation with your accountant.

Want your employees to receive and sign their payslips on their phones, with clear announcements about the new rules? Talk to the Tirvu team and see our pricing.

Sources

• Lei nº 15.270, de 26 de novembro de 2025 — Chamber of Deputies
• Tributação de 2026 (2026 tax tables) — Receita Federal
• Exemplos de aplicação da Lei nº 15.270/2025 (worked examples) — Receita Federal
• Tabela de contribuição mensal (monthly contribution table) — INSS
• Projeto de Lei nº 5.397/2026 — Federal Senate

This content is for informational purposes only and does not replace specialized legal advice.