IRS Jovem (Young Taxpayer Scheme) is a special tax regime designed to reduce the Personal Income Tax (IRS) burden for young people entering the workforce.
Over the past few years, the scheme has undergone several legislative changes, with the 2026 State Budget introducing new rules and expanding access to the regime.
In this article, we explain how IRS Jovem works, who is eligible, and the main changes that apply in 2026.
IRS Jovem: How it works and what’s new in 2026
IRS Jovem is a special tax regime that provides a partial exemption on employment income, reducing the amount of Personal Income Tax (IRS) payable during the first years of a young person’s professional career.
The objective of the scheme is to facilitate young people’s entry into the labour market by increasing their net disposable income during the early stages of employment.
The regime applies to both Employment income (Category A) and Self-employment income (Category B).
Eligible individuals may benefit from the scheme for up to ten consecutive years.
In short, IRS Jovem is a tax incentive designed to ease the tax burden on young workers and support their financial independence as they begin their careers.
Who Is Elligible?
As mentioned above, eligible taxpayers can benefit from the IRS Jovem regime during their first ten years of professional activity.
The scheme applies to young taxpayers up to 35 years of age (inclusive, as at 31 December of the relevant tax year).
One of the most significant legislative changes introduced in recent years was the simplification of the eligibility criteria.
Previously, access to the scheme often depended on the completion of a specific level of education. This requirement has now been removed, making the regime accessible to a wider range of young workers.
To qualify, applicants must also not be considered dependants for tax purposes. In other words, they cannot be included in their parents’ household for IRS purposes.
What is the Tax Benefit?
Over the ten-year period, the percentage of employment income exempt from IRS decreases gradually as follows:
- 100% exemption during the first year;
- 75% exemption from the second to the fourth year;
- 50% exemption from the fifth to the seventh year;
- 25% exemption from the eighth to the tenth year.
The annual tax exemption is subject to a maximum limit of 55 times the IAS (Indexante dos Apoios Sociais – Social Support Index) per year.
What’s new under the 2026 State Budget?
As mentioned earlier, the 2026 State Budget introduced several important changes to the IRS Jovem regime.
One of the most significant changes was the increase in the maximum eligible age, extending access from 30 to 35 years old.
Another major amendment removed the requirement for beneficiaries to have completed a specific level of education, making the scheme more accessible to young taxpayers entering the labour market through different career paths.
The reform also strengthened the financial support provided by the scheme by increasing the proportion of employment income that can benefit from tax exemption during the eligible period.
In practical terms, this means that qualifying young workers may enjoy a substantial reduction in the amount of IRS they pay throughout the duration of the benefit.
How to Apply for IRS Jovem
To benefit from IRS Jovem, taxpayers must choose this regime when completing their annual IRS tax return.
The option is made by completing Boxes 4A and 4F of Annex A of the tax return.
It is important to note that this option is not available through the Automatic IRS system (IRS Automático). Taxpayers wishing to benefit from IRS Jovem must therefore submit their tax return using the standard filing process.
Need Further Information?
If you still have questions about IRS Jovem or would like to understand whether you qualify for the scheme, consult a Certified Accountant. Professional advice will help ensure that you take full advantage of the tax benefits available while complying with all applicable tax requirements.