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Category A — Employment Income
Employment income — salaries, wages, and directors' remuneration. Subject to withholding tax by the employer.
Legal basis: Art. 2–9 CIRS
Category A (Categoria A) covers all income derived from employment relationships — salaries, wages, directors' remuneration, bonuses, commissions, and benefits in kind. It is the most common income category for most taxpayers. Employers are required to withhold IRS monthly (retenção na fonte) based on AT withholding tables, taking into account the employee's marital status and number of dependents. At year-end, the total IRS liability is reconciled in the Modelo 3 return, resulting in either a refund or additional payment. A specific deduction of €4,462 (2026) or 11.5% of gross, whichever is higher (subject to a cap), is applied before calculating the taxable base.
Example
A salaried employee earning €60,000 gross reports this as Category A. Their employer withholds approx. €1,500/month. After filing Modelo 3, the IRS liability is calculated and any over- or under-withholding is settled.
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