Portugal Salary After Tax: Your Go-to Guide to Net Earnings
Have you ever wondered how salary after tax works in Portugal? Learn how salaries work in the country, how much tax you pay on income (and for what purposes), and the employee benefits you’re entitled to. Also, discover the differences between gross and net salaries and how much you take home every month.
What You’ll Learn:
Portugal Salary After Tax: How the Payment System Works
The Portuguese Salary General Structure
The Average and Minimum Salaries in Portugal
Gross Salary Vs. Net Salary: The Portuguese Income Taxes Decoded
Personal Income Tax (IRS)
Social Security (SS or TSU)
But How Do I Pay It to the Government? Can I Do It Online?
Practical Example: How Much Tax is Deducted from Salary in Portugal?Comparing Taxes Across Europe
Either Way… Is Income Tax High in Portugal?
Portugal Salary After Tax: How the Payment System Works
As in any other country, when a company employs you, you earn a salary every month – that you agree on a contract before being hired. In general, Portuguese employers calculate how much they’ll pay you per hour and then make you an offer.
The disclosed value is usually set in gross payment. After that, you’ll have to pay taxes on your income (i.e., everything you earn in the country every month).
The Portuguese Salary General Structure
Once you’re employed, and depending on the company hiring you, different benefits can be added to your salary. So, it’s good to know your wage’s many variables upfront before calculating how much you pay on taxes. This is the most common structure of a full-time wage paid in Portugal:
Basic salary
Meal allowance (not mandatory)
Private health insurance (not mandatory)
Christmas and Holiday Subsidies (mandatory)
Worker’s compensation insurance (mandatory)
You can negotiate other benefits with your employer, such as a childcare voucher, a car allowance, a public transport allowance, or a gym subscription – to name a few.
Now, jump into the numbers to better understand how much you’ll earn and how much you’ll pay in taxes.
The Average and Minimum Salaries in Portugal
In 2023, the average monthly wage declared to Social Security was around €1,463 (a 7.2% increase compared to 2022) before taxes for a full-time job.
On the other hand, the minimum wage increased by €60 from 2023 to 2024. In 2023, people received a minimum of €760 per month, and since the first day of 2024, that value rose to €820 (both gross values).
Gross Salary Vs. Net Salary: The Portuguese Income Taxes Decoded
When employed, you receive a gross payment of the value agreed in the contract. However, that’s not the amount you’ll get in your bank account. So, these are the taxes you must pay every month:
IRS - Personal Income Tax
SS (or TSU) - Social Security
Personal Income Tax (IRS)
There isn’t a fixed IRS rate for everyone.
Many factors influence the IRS rate (like whether you have children or are married, amongst others). For tax purposes, residents in Portugal are taxed on their income at progressive rates, varying from 13.25% to 48%.
These rates are usually updated, so you must track them at least once a year.
Social Security (SS or TSU)
In Portugal, the global Social Security rate sits at a total of 34.75% per employed worker, divided by both parties:
The employer pays 23,75%
The employee pays 11%
But How Do I Pay It to the Government? Can I Do It Online?
When employed, you don’t need to worry about handling that payment. In Portugal, employers are responsible for delivering both taxes on your behalf. And they do that every single month.
That means your monthly payslip will showcase your salary after taxes, as your employer handles everything for you. That document will also show the respective tax rates.
Practical Example: How Much Tax is Deducted from Salary in Portugal?
You don't pay the IRS if you earn up to €820 per month.
But if you earn more than that, you must pay the IRS and SS every month. So, depending on many factors (that determine your IRS range), you’ll pay somewhere between 13.25% and 48% of the IRS, plus 11% of SS – but remember it’s your company’s responsibility to withhold those taxes and hand them to the government on your behalf.
Picture this scenario:
You work at BRIDGE IN as an employee
You’re single, don’t have any children, and reside in Portugal
You earn €2000 gross every month
This means that BRIDGE IN will withhold:
17,90% of IRS, i.e. €358
11% of SS, i.e. €220
In short, your net salary is €1422. The average salary in the tech industry can be higher, but these numbers already give you a better picture of your Portuguese salary after tax.
Comparing Taxes Across Europe
Sure, you find lower taxes in some European countries but higher in others. So it all comes down to other things you value – and you don’t find the same quality of life and security you find in Portugal.
So, if you’re considering moving to another country, weigh the pros and cons first.
Either Way… Is Income Tax High in Portugal?
Though it's not the lowest in Europe, it's not the highest. Portugal ranks somewhere in the middle when it comes to income tax rates in Europe. Generally, workers in Western European and more developed countries pay more.
Understanding how salaries work in Portugal and navigating the tax system is crucial for anyone living or working in the country. So, we hope that by learning the difference between gross and net salaries, you’ll have a clearer picture of what to expect in the country.
