Independent workers: Budget proposal for 2025 suggests lowering IRS withholding tax rate.

According to OE2025, withholding tax and advance payments for green receipts will decrease.

According to the State Budget proposal for 2025 (OE2025), as shared by Notícias ao Minuto, the withholding tax rate for independent workers will decrease from 25% to 23% next year, as well as the payments on account.

The retention rate is a percentage that depends on the wage amount and family profile for employees while for independent workers, it is a fixed percentage. Until 2024, the rate was set at 25%, and the goal is to decrease by two percentage points from next year.

However, self-employed workers are only required to withhold tax if their income has reached a certain threshold in the previous year or when, in the current year, it exceeds that value. The threshold was set at 13,500 euros in 2023, rising to 14,500 euros in 2024, and now expected to be 15,000 euros in 2025.  

Regarding payments on account, the OE2025 also proposes to reduce from the current 76.5% to 65% of an amount calculated based on a formula that considers the income of the year before last.

"Independent workers (such as doctors, architects, economists, lawyers, among many other professions) make three tax payments per year, in the months of July, September, and December," explains the news.

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