IRS Young: You can now ask the employer to apply the withholding tax with the discount.
If you are covered by the Young IRS, know that, from now on, you can request the application of the withholding tax discount to the employer at any time.
How to ask the employer to already apply the Young IRS regime to my salary?
Young workers up to 35 years old and who meet all the requirements to access the Young IRS can now ask the employer to withhold tax at source with the discount.
Thus, the monthly salary is already issued with the exemption to which you are entitled according to the Young IRS, and you can make the request to the company at any time.
So, the young worker has to inform the employer that he is eligible for the Young IRS scheme and that he wants it to be considered for the calculation of the withholding tax, as well as the year of work he is in (if he has been working for 5 years, he is in the 5th year for example).
The application of the regime, and consequently the change in withholding tax, will start from the moment the request is formalized and the company processes it. It does not have retroactive effects.
What changes in retention:
- With IRS Young, a portion of the worker's income is exempt from taxation (100% in the 1st year of income generation, 75% from the 2nd to the 4th year, 50% from the 5th to the 7th year, or 25% from the 8th to the 10th year).
- This exemption reduces the taxable base used to calculate withholding tax, decreasing the amount deducted monthly from the salary.
These are the practical consequences:
- Before the company receives the order, the withholding calculations follow the normal IRS tables, without considering the Young IRS exemption.
- After the request, the company adjusts the withholding to reflect the applicable exemption.
For example, a young person started working in January 2025 and only informed the company about joining the Youth IRS in March 2025. In January and February, the withholding was calculated normally, without exemption.
Starting in March, with the formalized request, the withholding will be adjusted and the young person will benefit from the monthly reduction provided by Young IRS.
If you do not request the discount on withholding tax before, at the time of delivery of the annual declaration (between April and June of the following year) you have to opt for the Youth IRS regime and the tax adjustment is refunded at that time.
If you have any questions, please contact Human Resources or the accounting department of the employer.
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