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Portugal
portugal

Taxes in Portugal

Employer Contributions in Portugal

Employers are responsible for deducting employees' contributions from their gross wage and transferring it monthly to the Social Security Administration.

Social insurance

Employers contribute 23.75% of the employee's gross income to social security (22.3% for nonprofit companies).

Other contributions

  • Labor Accident Insurance - 1.75% of the employee's gross income.
  • Wage Guarantee Fund (WGF) - 1% of the employee's gross income*.

*Bonuses, allowances and 13th & 14th salaries are not subject to this contribution.

Don't have time to figure out all employer contributions you need to pay in Portugal?

With Boundless you won't have to - they are already included in the payroll calculations

Contributions to the Working Compensation Fund (Fundo de Compensação do Trabalho) and the Working Compensation Warranty Fund (Fundo de Garantia de Compensação do Trabalho) are mandatory in order to protect employees in case of company insolvency or if the employer has difficulties paying salaries.

Employee Contributions in Portugal

Portuguese residents pay tax on their worldwide income, while non-residents are subject only to tax on their income generated in the country. To be considered a resident, the individual must spend more than 183 days a year in Portugal or have an abode in Portugal which they use as their permanent residence in any day of the year.

Income tax

The Portuguese income tax rates are generally progressive and vary according to the employee's situation involving marital status, number of children or dependent people and spouse's income.

Non-residents usually pay a 28% flat tax rate.

Portuguese income tax 

 




GROSS INCOME (EUR)
Taxas %
Standard (A)
Taxas %
Average (B)
up to 7,116 14,50 14,500
7,117 - 10,736 23,00 17,366
10,737 - 15,216 26,50 20,055
15,217 - 19,696 28,50​ 21,976​
19,697 - 25,076 35,00 24,770
25,077 up to 36,757 37,00 28,657
36,758 up to 48,033 43,50 32,141
​ 48,034 up to 75,009​​ 45,00​ 36,766​
more than 75,009 48,00 -

 

Solidarity charge

Residents earning more than €80,000 a year, pay a progressive solidarity tax which starts at 2.5% and goes up to 5% for income of €250,000 and above.

Social insurance

The general tax rate for employee’s social security contributions is 11%, which is deducted from their gross earnings.

Social Security benefits include sick leave, birth and adoption, disability, retirement, unemployment, death and work-related accidents or illness. It only applies to Portuguese nationals, qualifying European Union nationals, and those legally resident in Portugal as well as their spouses and dependents.

All individuals covered by social security also have healthcare benefits. Social security benefits are administered by the Social Security Institute (Instituto da Solidariedade e da Segurança Social), while healthcare benefits are mandated by the Ministry of Health (Ministério de Saúde)

Non-habitual tax regime

Created to incentivise high-value industries to operate in Portugal, non-habitual residents pay a flat 20% income tax rate for ten years on salaries earned in Portugal (other benefits apply on foreign income). Eligible employees must not have been a resident of Portugal in the previous five years and should perform high added value functions (generally scientific, artistic or technical).

With Boundless, all your employee and employer taxes in Portugal are sorted!

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