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Payroll taxes
in Portugal.

SALARY PAYMENT IN Euro (EUR, €)

CONTRACT LANGUAGES Portuguese / English

PAYROLL TAX 26.50%

PAYROLL CYCLE Monthly

TIME TO HIRE 12 hours

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.

Hiring in Portugal, Made Easy

Your business can easily hire employees in Portugal without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

The tax authority of Portugal is called the Tax and Customs Authority (Autoridade Tributária e Aduaneira, or AT).

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%.

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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