Translation unavailable - this article is shown in English. View English version
Summary
Portugal uses a progressive income tax system called IRS (Imposto sobre o Rendimento das Pessoas Singulares) with 9 marginal brackets ranging from 12.5% to 48%. Employees also pay mandatory social security contributions (TSU) at a flat 11% with no cap. High earners above EUR 80,000 face an additional solidarity surtax. Employers deduct IRS and TSU from each monthly pay through withholding (retencao na fonte).
How it works
Your take-home pay is reduced by the following deductions:
- Income tax (IRS) — progressive rates across 9 brackets from 12.5% to 48%, applied to taxable income after personal deductions
- Social security (TSU - Taxa Social Unica) — 11% flat rate on gross salary, no upper cap
- Solidarity surtax (Taxa Adicional de Solidariedade) — 2.5% on taxable income above EUR 80,000, plus an additional 5% above EUR 250,000
Portugal applies a specific deduction (deducao especifica) of EUR 4,104 to employment income, which reduces taxable income before the brackets are applied. There is also a personal tax credit that varies by bracket.
Income Tax Bands (2025)
Portugal has 9 IRS brackets for 2025:
| Taxable income | Marginal rate | Average rate at upper limit |
|---|---|---|
| Up to EUR 7,703 | 12.5% | 12.50% |
| EUR 7,704 — EUR 11,623 | 18.0% | 14.18% |
| EUR 11,624 — EUR 16,472 | 23.0% | 16.70% |
| EUR 16,473 — EUR 21,321 | 25.0% | 18.65% |
| EUR 21,322 — EUR 27,146 | 32.0% | 21.58% |
| EUR 27,147 — EUR 39,791 | 35.5% | 26.10% |
| EUR 39,792 — EUR 51,997 | 43.5% | 30.18% |
| EUR 51,998 — EUR 81,199 | 45.0% | 35.41% |
| Above EUR 81,199 | 48.0% | — |
These are marginal rates — each rate only applies to income within that band, not to total income.
Social Security Contributions
Employee contribution (TSU)
| Component | Rate | Cap |
|---|---|---|
| Employee social security (TSU) | 11.0% | No cap |
| Employer social security | 23.75% | No cap |
The employee pays 11% of gross salary. The employer pays 23.75% on top of gross salary. There is no upper earnings limit — TSU applies to the entire salary.
Solidarity surtax (Taxa Adicional de Solidariedade)
| Taxable income | Surtax rate |
|---|---|
| Up to EUR 80,000 | 0% |
| EUR 80,001 — EUR 250,000 | 2.5% |
| Above EUR 250,000 | 5.0% |
The solidarity surtax applies only to the portion of taxable income above each threshold.
Worked Example
For a gross annual salary of EUR 25,000 (single, no dependants):
-
Social security (TSU):
- EUR 25,000 x 11% = EUR 2,750.00
-
Taxable income:
- EUR 25,000 - EUR 4,104 (specific deduction) = EUR 20,896
-
Income tax (IRS) by bracket:
- EUR 0 — EUR 7,703 at 12.5% = EUR 962.88
- EUR 7,704 — EUR 11,623 at 18.0% = EUR 705.42
- EUR 11,624 — EUR 16,472 at 23.0% = EUR 1,115.04
- EUR 16,473 — EUR 20,896 at 25.0% = EUR 1,105.75
- Gross IRS: EUR 3,889.09
-
Solidarity surtax: EUR 0 (income below EUR 80,000)
-
Total deductions: EUR 2,750 (TSU) + EUR 3,889.09 (IRS) = EUR 6,639.09
-
Take-home pay: EUR 25,000 - EUR 6,639.09 = ~EUR 18,361/year (~EUR 1,530/month)
Note: This simplified example omits personal tax credits (deducoes a coleta) that further reduce the tax bill, and assumes no dependants or other deductions.
Assumptions and Limitations
- 2025 rates only — uses brackets and thresholds effective for the 2025 tax year
- Employment income only — models salary/wage earners (Categoria A). Does not model self-employment (Categoria B), rental, or investment income
- Single taxpayer — does not model joint taxation for married couples (tributacao conjunta)
- No dependant deductions — the worked example excludes per-dependant tax credits
- Mainland Portugal — Madeira and the Azores have different (lower) IRS rates
- 14 monthly payments — Portuguese salaries are typically paid over 14 months (including holiday and Christmas subsidies), which affects monthly withholding but not annual totals
- No meal allowance — the common tax-exempt meal allowance (subsidio de refeicao) is not modelled