Madeira's 2026 IRS rates are again 30% below the mainland's. In November, only half the usual IRS will be withheld
On 5 November, a Madeira regional legislative decree (Decreto Legislativo Regional n.º 17/2026/M) was published in the Diário da República, setting new IRS rates for people living in Madeira and Porto Santo (Diário da República). In October, the national parliament cut the rates for the first six IRS bands for 2026. As it did at the start of the year, Madeira has set its rates 30% below the national ones, in all nine bands.
The 2026 rates for Madeira residents, by band of taxable income: up to €8,342 — 8.54% (12.2% on the mainland); €8,342 to €12,587 — 10.64%; up to €17,838 — 14.49%; up to €23,089 — 16.52%; up to €29,397 — 21.42%; up to €43,090 — 24.22%; up to €46,566 — 30.17%; up to €86,634 — 31.22%; above that — 33.6% (48% on the mainland). The band limits are unchanged. The rates apply from 1 January 2026: they will be used to calculate the tax on the 2026 return, which is filed in spring 2027.
Less will also be withheld from November pay and pensions in Madeira. An order from the regional finance department (Despacho n.º 434/2026), published on 29 October in the region's official gazette, says that only half the usual amount of IRS is to be withheld in November, including from the Christmas bonus (subsídio de Natal) if it is paid in November. This is to give back the extra tax withheld at the old rates since January (Funchal Notícias). The only exception is the highest salaries and pensions, which do not get the halved withholding. From 1 December, withholding goes back to the previous tables.
If an employer has already withheld IRS the old way in November, the order allows them to correct this in withholdings up to the end of December 2026.
The national withholding tables for November came out in mid-October, but they did not apply to Madeira: the islands have their own tables. We wrote about how withholding was cut on the mainland in the article “IRS in November: €84 instead of €168 withheld from a €1,500 salary”.
