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
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Portugal

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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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

What is the tax bureau of Portugal called?

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

Is there an employer payroll tax contribution in Portugal?

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. 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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