Personal Income Tax
Portuguese Personal Income Tax (IRS) — 2025
If you earn income in Portugal or are planning to relocate, it's important to understand how Portuguese Personal Income Tax (IRS) affects your situation.
Portugal's IRS system considers not just your income, but also your residency status, profession, and source of earnings. This guide breaks down the categories, rates, and benefits that shape your tax position.
Who is considered a tax resident in Portugal?
You are a Portuguese tax resident if, in the relevant tax year:
- You stay in Portugal for more than 183 days, consecutive or not, in any 12-month period;
- You stay for a shorter period but maintain a home in Portugal under conditions that suggest habitual residence;
- You are, on 31 December, a crew member of a Portuguese ship or aircraft;
- You perform public functions abroad on behalf of the Portuguese State.
Taxation based on residency status
| Category | How it's taxed |
|---|---|
| Residents | Taxed on worldwide income (Portuguese and foreign-sourced). |
| Non-Habitual Residents (NHR) | 20% flat rate on high-value activity income; foreign income may be exempt or taxed at 10% (e.g. pensions). |
| IFICI beneficiaries | 20% on work-related income; most foreign income is exempt (except tax havens and pensions). |
| Ex-Residents | 50% exemption on work-related income (under conditions); other income follows normal rules. |
| Non-Residents | Taxed only on income earned in Portugal. |
Note: the NHR regime was revoked in 2024, but may still apply to those registered or eligible before 1 January 2024.
Categories of income under IRS
| Category | Description | Examples |
|---|---|---|
| A | Employment income | Salaries, bonuses, allowances |
| B | Self-employment income | Business income, professional fees, IP rights |
| E | Capital income | Interest, dividends, royalties |
| F | Rental income | Residential / commercial property rents |
| G | Capital gains | Real estate and stock market sales |
Each category has specific rules for determining taxable income. It is not enough to sum up gross income and apply a rate — deductions, coefficients, and accepted expenses must be considered.
IRS tax brackets for 2025 (mainland Portugal)
| Taxable income (€) | Rate | Deductible (€) |
|---|---|---|
| Up to 8,059 | 13% | — |
| 8,059 – 12,160 | 16.5% | 282.07 |
| 12,160 – 17,233 | 22% | 950.91 |
| 17,233 – 22,306 | 25% | 1,467.91 |
| 22,306 – 28,400 | 32% | 3,029.38 |
| 28,400 – 41,629 | 35.5% | 4,023.14 |
| 41,629 – 44,987 | 43.5% | 7,353.76 |
| 44,987 – 83,696 | 45% | 8,028.38 |
| Above 83,696 | 48% | 10,539.00 |
Solidarity surcharge
| Taxable income (€) | Mainland & Madeira | Azores |
|---|---|---|
| 80,000 – 250,000 | 2.5% | 1.75% |
| Above 250,000 | 5% | 3.5% |
IRS payment deadlines
Personal income tax returns must be submitted between 1 April and 30 June of the year following the income year.
Withholding tax
Withholding tax is an advance payment of IRS deducted directly at the source — usually by the entity that pays the income. It applies to a variety of income types and helps ensure timely collection.
| Income type | Typical rate | Notes |
|---|---|---|
| Employment & pensions | Progressive | Based on monthly withholding tables |
| Self-employment (services) | 25% | If paid by companies or public entities |
| Capital income (interest, dividends) | 28% | Flat final rate (residents & non-residents) |
| Non-residents | 25% / 35% | Depending on income type and origin |
| Tax-haven income | 35% | From or through blacklisted jurisdictions |
Special cases
- No withholding applies to monthly salaries up to the national minimum wage, provided the taxpayer only works for one entity and declares it;
- Certain capital income may be included in the tax return upon request — in which case the 28% becomes a prepayment instead of a final tax;
- Exemptions exist for some investment funds and international treaties.
Even if tax is withheld, this does not guarantee that your final liability is covered. You may still owe additional tax or be eligible for a refund, depending on your full annual income.
Need guidance?
Want a personalised simulation of your IRS position for 2025? Our team will run the numbers for your specific situation — Portuguese income, foreign income, or both.