Portugal Income Tax Brackets: IRS Rates on 2026 Income Explained
Portugal taxes income on a sliding scale of nine brackets, but the headline 48% applies only to the slice above €86,634. Here is how the table, the surcharge and the flat rates fit together.
Portugal’s personal income tax (IRS) on 2026 income uses nine brackets, with marginal rates from 12.2% on taxable income up to €8,342 to 48% on the part above €86,634. A solidarity surcharge of 2.5% or 5% applies above €80,000, and many non-residents and investment income pay flat rates of 25% or 28% instead.
The table is in article 68 of the IRS Code (Código do IRS). As of November 2026, the Portal das Finanças shows it in the wording of Decree-Law 212/2026 of 4 November, the government’s cut to the rates of the lower brackets on 2026 income. Everything below is general information; tax due in your case depends on deductions and household status, so check it with a certified accountant (contabilista certificado).
What are the IRS brackets for 2026 income?
These are the general rates for mainland Portugal, applied to taxable income (rendimento coletável), meaning income after the specific deductions for each income type.
| Taxable income (as of November 2026) | Marginal rate | Average rate at the top of the bracket |
|---|---|---|
| Up to €8,342 | 12.2% | 12.200% |
| €8,342 to €12,587 | 15.2% | 13.212% |
| €12,587 to €17,838 | 20.7% | 15.416% |
| €17,838 to €23,089 | 23.6% | 17.277% |
| €23,089 to €29,397 | 30.6% | 20.136% |
| €29,397 to €43,090 | 34.6% | 24.732% |
| €43,090 to €46,566 | 43.1% | 26.103% |
| €46,566 to €86,634 | 44.6% | 34.658% |
| Above €86,634 | 48.0% | Not applicable |
The official text is on the Portal das Finanças page for article 68 of the IRS Code. The rates and limits changed several times between 2024 and 2026, so make sure any calculator you use has the current table.
How do marginal rates work in practice?
Each rate applies only to the slice of income inside its bracket. The law gets the same result in a shorter way: it takes the top of the highest bracket your income fully covers at that bracket’s average rate, and adds the rest at the next marginal rate.
Take taxable income of €30,000. The first €29,397 is taxed at the average rate of 20.136%, which is €5,919.38. The remaining €603 is taxed at 34.6%, which is €208.64. The tax before deductions is €6,128.02, an average of about 20.4%, even though the top marginal rate is 34.6%.
Deductions from the tax (deduções à coleta) for dependants, health, education, housing and general household spending then reduce the bill. Many of them depend on invoices issued with your tax number, so ask for your NIF on receipts; see our guide to the NIF tax number.
What is the solidarity surcharge?
The additional solidarity rate (taxa adicional de solidariedade) in article 68-A adds 2.5% on taxable income between €80,000 and €250,000 and 5% on taxable income above €250,000. It is calculated on top of the normal brackets.
For couples who file jointly, the calculation is made on half of the joint taxable income and the result is doubled. The same halving applies to the main table, which is why joint filing can help households where one partner earns much more than the other.
Who pays no IRS at all?
Low earners are protected by the minimum subsistence rule (mínimo de existência) in article 70. Its reference value is the higher of €12,880 or 1.5 × 14 × IAS; with the 2026 IAS of €537.13, the €12,880 figure applies, which equals 14 monthly payments of the 2026 minimum wage.
The rule applies to people whose gross income comes mainly from employment or pensions. Below the reference value, the tax is reduced so that net income does not fall under it, with a phase-out above. It does not apply where total gross income is more than 2.2 × 14 × IAS per taxpayer, or where income taxed at flat rates is more than 14 × IAS per taxpayer.
Are rates different in Madeira and the Azores?
Yes. The autonomous regions of Madeira and the Azores set their own reduced IRS rates for residents, through regional legislation, so the table above applies only to mainland Portugal. If you live on the islands, check the regional government’s current table or your simulation on the Portal das Finanças, which applies it automatically.
What flat rates apply to non-residents and investment income?
Several kinds of income do not go through the brackets unless you choose to aggregate them.
| Income (as of November 2026) | Rate | IRS Code |
|---|---|---|
| Non-residents: employment, self-employment income and pensions from Portugal | 25% withheld at source | Art. 71(4) |
| Interest and dividends paid by Portuguese entities | 28% withheld at source | Art. 71(1) |
| Rental income from housing leases | 25% (lower for long leases) | Art. 72(2) |
| Other property income and many capital gains | 28% | Art. 72(1) |
| Income linked to listed tax havens | 35% | Arts. 71 and 72 |
Portuguese residents can usually opt to add capital income, rents and gains to their other income and pay the bracket rates, which helps when those rates are lower than 28%. Gains on assets held for less than 365 days must be added if your taxable income reaches the top bracket. Non-residents from the EU or EEA can ask to be taxed at the rate that would apply to a resident with the same total income.
Bottom line
The marginal rate tells you what an extra euro of income costs, not your overall tax: most full-time salaries in Portugal end up with an average rate well below their top bracket. People moving here should also look at the special regimes before filing for the first time, such as IFICI for qualifying jobs, because they replace the table for the income they cover.
FAQ
Which year’s table applies to my IRS return?
The return filed in spring 2027 covers 2026 income and uses the 2026 table above. Monthly withholding during the year is only an advance; the return settles the final tax.
Is the 48% rate charged on all my income?
No. It applies only to the part of taxable income above €86,634. Income below that is taxed at the lower rates.
Do I pay IRS on foreign income?
Tax residents in Portugal are taxed on worldwide income, with credits for tax paid abroad under treaties. Non-residents pay IRS only on income from Portuguese sources.
Where do I check my own calculation?
The Portal das Finanças has an IRS simulator, and the return itself shows a settlement. Our guide to the IRS tax return explains filing dates.
