Since January 1, 2025, the IRS Jovem regime has been expanded, now allowing workers under 35 years of age to benefit from tax exemptions for a period of 10 years. To help young people understand in a practical way how this benefit can increase their monthly income, Coverflex developed a Net Salary Simulator, which integrates the changes to this tax regime.
In addition to considering the usual flexible benefits, such as child vouchers, social passes and health insurance, the simulator introduces the possibility of calculating the impact of Youth Income Tax. The tool seeks to promote financial literacy and facilitate the management of personal finances, especially at a time when new income tax withholding tables come into force.
A tool for more informed financial decisions
Inês Odila, Country Manager at Coverflex in Portugal, highlights the importance of this resource:
“With the arrival of the new year and new income tax withholding tables, it is crucial to provide tools that promote financial literacy and help us start 2025 with greater attention to our personal finances. The integration of IRS Jovem into our simulator is another contribution to allowing young workers to understand the impact of this Government measure on their net salary. Ultimately, we want to drive more informed financial decisions.”
Main changes to the IRS Jovem in 2025
The IRS Jovem regime, which allows exemptions or reductions in IRS payments on work income, has undergone significant revisions:
- Duration extended to 10 years (previously 5 years);
- Expansion for all young people up to 35 years of age, regardless of their level of education;
- Exemptions applied progressively:
- 1st year: Full exemption (100%);
- 2nd to 4th year: 75% exemption;
- 5th to 7th year: 50% exemption;
- 8th to 10th year: 25% exemption.
These exemptions are applied up to a limit of 55 IAS (28,737.50 euros annually). For income above this amount, general income tax rates apply.
How does the simulator work?
Coverflex’s Net Salary allows you to calculate in detail the impact of these exemptions on monthly income. Users can adjust variables such as income bracket and flexible benefits, obtaining a clear view of the positive impact of this tax regime.
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