The Brazilian government has issued a release announcing that the minimum monthly salary will be increased to BRL 1,320 with effect from 1 May 2023. In addition to the minimum monthly salary increase, an individual income tax (IRPF) exemption will be provided for workers with monthly income of up to twice the minimum monthly salary, or BRL 2,640. Currently, the monthly exempt amount is BRL 1,903.98. Further, it is noted that the exemption will be progressively increased to BRL 5,000 per month, although no timeline is provided.

Following the government release, a clarification note was issued on the implementation of the exemption measure. The note explains that the increased exemption will initially be provided through an increase in the exempt amount to BRL 2,112.00, along with a simplified monthly deduction of BRL 528.00. The simplified deduction is optional, with taxpayers entitled to higher deductions under current legislation allowed to claim such higher deductions.