What “exempt” buys you, mechanically
The exemption is a slice of your gross category A or B income (salary or self-employment, before the specific deduction): 100% of it in your first year of earning income, 75% in years two to four, 50% in years five to seven, 25% in years eight to ten. After 10 earning years it is over.
Two mechanisms then eat into that headline, and the calculator above models both.
The cap. The exempt amount (not your income: the exempt amount) tops out at €29,542 a year. That is 55 × IAS, so it is re-fixed each year with the IAS.
In a 75%-exemption year the cap starts binding around €39,390 of gross; past that, every additional euro is fully taxable and the exemption is flat.
The rate. The exempt income does not leave the computation. Art. 12.º-B routes it back through the englobamento rules: it is counted, without deductions, to fix the rate that applies to everything else. You pay the average rate of your full income, charged on the non-exempt slice only. The solidarity surcharge and the fixed family credits run as normal, because IRS Jovem is a variant of the general scale, not a parallel tax.
Year two, €45,000 gross
Say this is your second year of earning income, on €45,000. The naive reading (75% exempt, so you are taxed on €11,250) is wrong twice.
First the cap: 75% of €45,000 is €33,750, which is more than the ceiling allows, so the exemption stops at €29,542.15 and the taxable slice is €15,457.85, a third bigger than the naive figure.
Then the rate: that slice is not taxed as if it were your whole income. The full €45,000 is counted back in to set the rate, and the slice pays the average rate of the whole. Still a large saving, but visibly less than “75% off” suggests: put the same salary through the general scale in the form above and look at the gap.
The counter counts earning years, nothing else
“First year” means the first year you earned category A or B income: not the year you first ticked the box, and not the year you arrived. A year with no such income at all is skipped: it does not burn one of the ten. The form asks for the year number directly because no payslip reveals it, and nothing checks it for you: you declare it.
Who the door is closed to
The entrance: aged 35 or under on 31 December of the tax year, and not counted as a dependant in someone else’s household. The exits are permanent: anyone who benefits or has ever benefited from NHR or from IFICI is out for good, as is anyone who opted for the former-residents regime of art. 12.º-A, and anyone whose tax situation is not in order. The past tense is the trap: one NHR year long ago closes IRS Jovem today. The option itself is exercised in the annual return, year by year.
What changed in 2026
Nothing structural. The age limit, the ten-year horizon and the four-step exemption ladder are the shape Lei n.º 45-A/2024 gave the regime, and 2026 carries them unchanged. What moved is the base of the cap: the ceiling is 55 × IAS, and for 2026 it stands at €29,542.
In 2025 the same ceiling was €28,737.50; the IAS underneath the 2026 figure is €537.13.
Everything here assumes a single filer on the mainland. Madeira and the Azores run their own scales. The rest of the salary machinery (the specific deduction, the minimum-existence abatement, the surcharge) lives on the Portugal salary page.