How income tax works in Portugal
Portugal taxes resident individuals on worldwide income. The 2026 IRS brackets start at 12.5% and rise to 48%, and an additional solidarity rate can apply at higher income levels.
Non-residents are taxed only on Portuguese-source income, and taxable remuneration is generally subject to a flat 25% rate. Dividends and interest are usually taxed at 28% for residents unless they choose aggregation.
Payroll and social security matter as much as the income tax bands. Employees generally pay 11% and employers 23.75%, while self-employed income can follow simplified or organised-accounting rules depending on turnover and activity.
Income tax brackets in Portugal
| Bracket | Rate | Notes |
|---|---|---|
| Up to EUR 8,342 | 12.5% | Lowest 2026 bracket |
| EUR 8,342 to EUR 12,587 | 15.7% | Second bracket |
| EUR 12,587 to EUR 17,838 | 21.2% | Third bracket |
| EUR 17,838 to EUR 23,089 | 24.1% | Fourth bracket |
| EUR 23,089 to EUR 29,397 | 31.1% | Fifth bracket |
| EUR 29,397 to EUR 43,090 | 34.9% | Sixth bracket |
| EUR 43,090 to EUR 46,566 | 43.1% | Seventh bracket |
| EUR 46,566 to EUR 86,634 | 44.6% | Eighth bracket |
| Above EUR 86,634 | 48% | Top marginal rate |
Tax rates at a glance
- Personal income tax
- 12.5% - 48%Progressive
- Non-resident employment rate
- 25%
- Dividend and interest income
- 28%
- Employee social security
- 11%
- Employer social security
- 23.75%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
ExpatsRemote workersEmployeesContractorsHigh earners
Watch out for
- The old NHR regime is no longer open to new applicants, so current planning usually centers on IFICI, former-resident relief and treaty residence rules.
- Resident individuals can still owe solidarity tax on top of IRS once income crosses the higher thresholds.
- Self-employment income may be taxed under simplified or organised accounts rules, and the simplified regime threshold is EUR 200,000 for 2026.
- Social security is separate from income tax and can materially affect take-home pay, especially for employees and board members.
Frequently asked questions
Does Portugal tax residents on worldwide income?
Yes. Portugal residents are taxed on worldwide income, while non-residents are taxed only on Portuguese-source income.
What is the income tax rate in Portugal for 2026?
The 2026 resident IRS table runs from 12.5% to 48%. Non-resident taxable remuneration is generally taxed at 25%.
Do salaries in Portugal have payroll deductions?
Yes. Employees generally pay 11% social security and employers generally pay 23.75%, on top of any income tax withholding.