IRS 2027: what changes in Portugal's Budget proposal
Portugal's 2027 State Budget proposal (OE2027) was submitted to Parliament on 8 October 2026. For income tax (IRS) it raises the brackets by 3.88%, keeps lower rates in the first six brackets and lifts the tax-free minimum. It is still a proposal: figures can change before the final vote.
Timeline
- 8 October 2026: proposal submitted.
- 27 October 2026: general debate begins.
- 24 November 2026 (expected): final vote.
- 1 January 2027: entry into force, once published.
Between the general debate and the final vote, parties table amendments, and details often change at this stage. Treat the figures below as provisional.
Brackets up 3.88%
| Bracket | Taxable income 2027 (proposal) | Rate |
|---|---|---|
| 1 | up to €8,666 | 12.2% |
| 2 | €8,666 – €13,075 | 15.2% |
| 3 | €13,075 – €18,530 | 20.7% |
| 4 | €18,530 – €23,985 | 23.6% |
| 5 | €23,985 – €30,538 | 30.6% |
| 6 | €30,538 – €44,762 | 34.6% |
| 7 | €44,762 – €48,373 | 43.1% |
| 8 | €48,373 – €89,995 | 44.6% |
| 9 | over €89,995 | 48% |
The rates match the 2026 rate cut approved by Parliament this year, and are lower than those in the original 2026 Budget Law for brackets 1 to 6 (for example, 12.2% instead of 12.5% in the first bracket).
Raising the brackets by 3.88% means a pay rise below that figure will not push you into a higher bracket purely because of inflation. The Government says pay rises of up to 4.5% will be tax-neutral. The solidarity surcharge (2.5% above €80,000 and 5% above €250,000) keeps the same thresholds.
| Taxable income | 2026 Budget Law | 2026 with rate cut | 2027 proposal |
|---|---|---|---|
| €20,000 | €3,343.47 | €3,260.15 | €3,203.53 |
| €30,000 | €6,260.15 | €6,128.04 | €5,984.57 |
Figures are tax before personal deductions and credits.
Tax-free minimum and minimum wage
The minimum wage rises to €970 a month in 2027 (from €920). The tax-free minimum (mínimo de existência) goes up to €13,580 (970 × 14), or 1.5 × 14 × IAS if higher, so minimum-wage earners still pay no IRS.
Other changes
- The rent deduction cap rises to €1,000 a year.
- IMT Jovem (under-35s buying a first home): full IMT and Stamp Duty exemption up to €338,141, partial up to €676,185. See the IMT guide.
- The IAS for 2027 has not been set yet, so values linked to it are still estimates.
Withholding tables
Monthly withholding is only an advance. Your final 2027 tax is settled in the IRS return filed in 2028, after deductions; see the deductions guide.
The 2027 monthly withholding tables have not been published yet; they usually come out after the Budget is approved. Until then, any 2027 net-salary figure, including ours, is an estimate based on the 2026 tables adjusted to the new brackets. Pick 2027 in our calculator and the result is flagged as a proposal.
What to do now
- Compare your 2026 and 2027 net pay with the calculator.
- If you are under 35, check which year of IRS Jovem you are in.
- Buying a home in 2027? The new IMT Jovem limits only apply to deeds signed after the Budget comes into force.
- Follow the final vote on 24 November: we will update this guide once the law is published.
See the net salary guide and, if you are under 35, the IRS Jovem guide.