Moving to Portugal for work: how your salary is taxed

How your salary is taxed

Two things come off a Portuguese salary:

• Social security: 11% of your pay, with no upper limit. Your employer pays another 23.75% on top of your salary.
• IRS (Imposto sobre o Rendimento das Pessoas Singulares), the income tax. It is worked out on your yearly income, not month by month.

The IRS calculation for an employee has four steps:

1. Take your gross yearly salary and subtract the specific deduction of €4,587 (or your social security contributions, if they are higher).
2. Apply the progressive rates in the table below to what is left.
3. Subtract personal deductions: 35% of general family expenses up to €250, €600 per child, and expense-based deductions for health, education and housing.
4. Add the solidarity surcharge on very high incomes: 2.5% on taxable income from €80,000 to €250,000 and 5% above that.

Each rate applies only to the slice of income inside its band. Married couples and partners in a de facto union can choose to file jointly, which splits their combined taxable income in two before the rates are applied.

Worked example: €30,000 a year

Take-home pay at common salaries

Single employee, mainland Portugal, standard rules. Effective rate includes IRS and social security.

Your payslips: 14 payments a year

Portuguese employees receive a holiday allowance (subsídio de férias) and a Christmas allowance (subsídio de Natal), each worth about one month's pay. The Christmas allowance is due by 15 December, and in the year you start it is paid in proportion to the time worked. That is why salaries are often quoted as 14 payments: an offer of €30,000 a year means roughly €2,143 gross a month plus the two extra payments. You and your employer can agree to spread the allowances over the year in twelfths (duodécimos), in writing for the holiday allowance, which gives a higher monthly figure but the same yearly total.

Each month your employer withholds IRS (retenção na fonte) using the official withholding tables, and the holiday and Christmas allowances are always withheld on their own. Withholding is an advance payment, not your final bill: the real tax is worked out in your annual return, and the difference is refunded or paid then. Our calculator shows the final yearly figure.

Many employers also pay a meal allowance (subsídio de refeição) for each working day. In 2026 it is free of tax and social security up to €6.15 a day in cash, or 70% more (about €10.46) when paid on a meal card.

When you become tax resident

You are tax resident in Portugal for a year if, in any 12-month period that starts or ends in that year, you either:

• stay in Portugal for more than 183 days, or
• have a home there in conditions that suggest you intend to keep it as your habitual residence.

The year you move is split: you are taxed as a resident from the first day you are in Portugal in that period, and as a non-resident before it, unless you were already resident at some point in the previous year, in which case you are resident from 1 January. Only your income from the date you become resident goes into your Portuguese return as a resident.

Expat tax regimes: IFICI and IRS Jovem

IFICI (sometimes called NHR 2.0)

IFICI taxes salary from a qualifying job at a flat 20% for 10 years, instead of the progressive rates. You must not have been resident in Portugal in the previous five years, and the job must be in a qualifying activity, such as research, a certified startup or a highly qualified role at an exporting or investment-supported company. For a single employee it beats the standard rules above about €34,600 a year; on €80,000 it is worth +€8,824 a year. Register on Portal das Finanças by 15 January of the year after you become resident, so by 15 January 2027 if you arrive in 2026. IFICI calculator and conditions.

IRS Jovem

If you are 35 or under, part of your salary is exempt from IRS for your first 10 years of income taxed in Portugal: 100% in year 1, then 75%, 50% and 25%, on exempt pay of up to €29,542 a year. Years you worked abroad do not count, so most young people who move to Portugal start at year 1. On €30,000, year 1 is worth +€4,561 a year. IRS Jovem calculator and conditions.

First steps after you arrive

1. Get a NIF, your tax number. You need it for your employment contract, a bank account and a rental contract. You can request it in person at a tax office (Finanças) or Loja do Cidadão with an appointment, online through a representative, or, once you have a Portuguese address, together with your social security and health numbers at an Espaço Cidadão. A tax representative is not required just to get a NIF, and you no longer need one once your address is in Portugal.
2. Get a social security number (NISS). Your employer can request it after you sign your contract, or you can apply with the online form on the Segurança Social website.
3. Create your Portal das Finanças login, so you can see your withholding, check invoices that count for deductions and file your return.
4. Choose your regime early: tell your employer about IRS Jovem or IFICI so less tax is withheld from the start, and register for IFICI before the deadline.
5. Ask for invoices with your NIF (fatura com NIF) when you pay for health, education, rent or everyday expenses, because that is how deductions reach your return.

Your annual tax return

The IRS return (Modelo 3) for a year is filed online between 1 April and 30 June of the following year. Almost every employee has to file: you are only excused if your income is solely employment or pension income of €8,500 or less with no tax withheld. From your second year, simple cases can use the automatic return (IRS Automático), which you only need to confirm; it is not available for the year you arrive, because it requires residence for the whole year. The return is where IRS Jovem or IFICI is applied, where couples choose joint or separate taxation (both must opt in, year by year), and where the withholding taken from your payslips is settled.

What is changing in 2026 and 2027

• 2026 rate cut: Parliament approved lower rates for the first six brackets on all 2026 income on 9 October 2026. Once it is published, it is worth +€110 a year on €30,000, reaching you through lower withholding late in the year or in your 2026 return.
• 2027 Budget proposal: the bracket limits rise and the lower rates continue. On €30,000 the proposal leaves +€230 a year compared with the 2026 rules in force today. The minimum wage would rise to €970 a month. The final vote is due on 24 November 2026.

The Portugal calculator lets you switch between the 2026 rules, the approved cut and the 2027 proposal.

Sources

• CIRS article 16: tax residence
• CIRS article 68: IRS rates
• EBF article 58-A: IFICI
• CIRS article 12-B: IRS Jovem
• Segurança Social: employees
• CIRS article 58: who must file a return
• CIRS article 99-C: withholding on holiday and Christmas pay
• Despacho 233-A/2026: 2026 withholding tables
• Portal das Finanças: IRS Automático
• Autoridade Tributária: NIF for foreign citizens
• gov.pt: request a social security number (NISS)
• Portaria 51-B/2026/1: meal allowance 2026
• Ofício-circulado 90068/2024: end of NHR and transitional rules
• Our methodology and the full list of sources for the calculator

Frequently asked questions

This guide explains the general rules for employees and is not personal tax advice. Rules change and individual situations differ, so check with the tax authority or a tax adviser before making decisions. Spotted something out of date? Email [email protected].