The Income Tax starts 2026 with key changes for workers and retirees reached by the ARCA tax. Since January, a semiannual update of 14.29% has been in effect, in line with inflation measured by the CPI.
The adjustment has a full impact on personal deductions, the progressive scale, and the salary floor from which taxpayers start paying the tax. The values arise from the analysis published by Marcos Felice in the Accountant's Blog.
ARCA podrá intervenir activamente en la causa
Why Income Tax is updated in January
The tax law establishes an automatic update in January and July of each year. The mechanism takes the inflation of the previous semester, in this case the price variation between July and December 2025.
This 14.29% is transferred to all the parameters that are used to calculate withholdings from January, even if the salary was accrued in December.
Personal deductions in force in the first half of 2026
With the update applied, the non-taxable income stands at $5,151,802.50. From that amount, deductions for family dependents are added.
Spouse: $4,851,964.66
Child: $2,446,863.48
Child with a disability: $4,893,726.96
Agencia de Recaudación y Control Aduanero.
The special deduction amounts to $18,031,308.76, while for new professionals and entrepreneurs it reaches $20,607,210.01. In certain specific cases, the cap reaches $24,728,652.02.
How the Income Tax scale looks in 2026
The tax's progressive scale is also updated. The first bracket, up to $2,000,030.09 of accumulated net income, is taxed at 5%.
Agencia de Recaudación y Control Aduanero (ARCA).
The rates rise gradually until they reach 35% for income above $60,750,913.96. These values are estimates and still need to be officially confirmed by ARCA.
From what salary taxpayers start paying Income Tax
With the new parameters, the tax is triggered when the net salary exceeds the sum of the non-taxable income and the special deduction. The calculations assume an average deduction of 17% from the gross amount.
In practical terms, a single person without children starts paying from a gross salary close to $3,000,000. In contrast, a married person with two children only starts paying from a gross salary close to $4,000,000.
Placa de la Agencia de Recaudación y Control Aduanero.
A key detail: the December salary
Income Tax is settled based on what is received, not on what is accrued. That's why the December salary collected in January must already be calculated with the updated values.
If there are differences, the employer is required to recalculate and adjust the withholding in the following payroll settlement.
