Learn about payroll taxes in Portugal thanks to Horizons’ up-to-date guide.
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SALARY PAYMENT IN Euro (EUR, €)
CONTRACT LANGUAGES Portuguese / English
PAYROLL TAX26.50%
PAYROLL CYCLE Monthly
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What is the average employer tax rate in Portugal?
The corporate tax rate in Portugal is 21%.
What is the average employee tax rate in Portugal?
Employees in Portugal are taxed progressively on income. The rates for residents are as follows:
€0-€7.112 → 14,5% 0
€7.112-€10,732 → 23% (€604.54 deductible)
€10.732-€20,322 → 28,5% (€1,194.80 deductible)
€20.322-€25,075 → 35% (€2,515.63 deductible)
€25.075-€36,967 → 37% (€3,017.27 deductible)
€36.967-€80,882 → 45% (€5,974.54 deductible)
above €80,882 → 48% + solidarity rate of 2.5% to 5% (€8,401.21 deductible)
The income tax rate for non-residents is a flat rate of 25%.
There is also another category of residents with its own tax rate. This is known as the non-habitual resident regime and applies to those deemed as ‘high value-adding’ workers. The list of professions includes engineers, doctors, and so on, and the tax rate for this group is 20% (for a maximum of 10 years).
Employer contributions in Portugal
Employers in Portugal must contribute 23.75% of employee salaries toward the social security system.
Employee contributions in Portugal
Employees in Portugal must contribute 11% of gross income toward the social security system.
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Portugal has a progressive payroll tax system for employees. The rates for residents are:
€0-€7.112 → 14,5% (no deductible)
€7.112-€10,732 → 23% (€604.54 deductible)
€10.732-€20,322 → 28,5% (€1,194.80 deductible)
€20.322-€25,075 → 35% (€2,515.63 deductible)
€25.075-€36,967 → 37% (€3,017.27 deductible)
€36.967-€80,882 → 45% (€5,974.54 deductible)
above €80,882 → 48% + solidarity rate of 2.5% to 5% (€8,401.21 deductible)
The income tax rate for non-residents is a flat rate of 25%.
Foreigners may benefit from “non-habitual resident” tax status; if approved, the income tax rate is capped at a rate of 20% for a maximum of 10 years.
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There is no payroll tax contribution in Portugal (i.e., there is no separate tax on employee salaries). The corporate income tax rate is 21%. How does the payroll tax system of Portugal work? Portugal has a progressive payroll tax system for employees.
Portugal's income tax is proportional to the amount you're earning and your tax status. If you're a high earner in Portugal, income taxes can reach over 40 percent. However, if you're a non-habitual resident, tax can be fixed at rates of around 20 percent for a ten-year period.
Portugal's personal income tax system levies high tax rates on an unusually narrow set of high earners, striking a poor balance between earnings incentives and revenue contributions. Personal income is subject to 11 different tax brackets, including two brackets for added solidarity rates.
The euro (EUR) is the official currency of Portugal. Employees in Portugal must be paid at least biweekly—via check, money order or direct deposit—and payment must be made on a workday, during working hours. Employers must provide a payslip detailing pay, benefits and deductions every pay period.
As a general rule, dividends and similar payments to non-resident taxpayers (without a permanent establishment in Portugal) are subject to a final withholding tax at the rate of 25% on their gross amount (35% if paid to a blacklisted jurisdiction (see Sec. 13.5.) or where the beneficial owner is undisclosed).
Portugal's Non-Habitual Resident (NHR) special tax regime allows qualifying entrepreneurs, professionals, retirees and HNWIs to enjoy reduced tax rates on Portuguese-source income and exemption on most foreign-source income for 10 years.
These additional salary instalments are paid in June and December. The employee and the employer both need to contribute to the Portuguese social security system. For the employer, the costs are 26,5% of the employee's gross salary and for the employee, it is 11%.
Yes, Portugal offers state-provided healthcare that is accessible to all citizens and legal residents, completely free of charge. While most medical services are covered, there may be certain fees associated with emergency room visits, consultations with your family doctor, or when using ambulance services.
If you work as an employee, your contribution to Social Security is equivalent to 11% of your gross salary (total income without deductions). This amount is automatically deducted by the employer.
Launched in 2009, the scheme allows people who have become residents by spending more than 183 days a year in the country to benefit from a 20% tax rate on Portuguese-sourced income during a 10-year period, granted that it's derived from "high value-added activities".
What's the average salary in Portugal? The average salary of workers with remuneration declared to Social Security was 1,269.34 euros per month in 2022, 29% higher than in 2015, while for young people (up to 30 years old), the average salary was 1,037.57 euros, 40% more compared to 2015.
If you are a non-resident in Portugal, only income earned in Portugal will be liable for tax, typically at 20%. However, lower tax rates exist for income received from property.
These additional salary instalments are paid in June and December. The employee and the employer both need to contribute to the Portuguese social security system. For the employer, the costs are 26,5% of the employee's gross salary and for the employee, it is 11%.
Statutory benefits, also known as mandatory benefits, are entitlements that employers are obligated by law to provide to their employees. Common examples include benefits like paid annual leave, parental leave, worker's compensation insurance, and paid sick leave.
The minimum wages have been revised in Portugal with effect from 01 January 2024. The minimum wage is increased as follows: For national (continent), from €760.00 to €820.00 per month and €10,640.00 to €11,480.00 per year; and.
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