IRS tax brackets in Portugal 2026: rates and worked examples
Portugal's IRS brackets set the rate paid by each slice of your income, not by all of it. Here are the 2026 brackets, how the calculation really works, the rate cut approved by Parliament and two worked examples.
The 2026 IRS brackets
Rates are set in article 68 of the IRS Code and the 2026 thresholds in the State Budget Law (Lei 73-A/2025). They apply to taxable income (rendimento coletável): gross employment income minus the specific deduction (€4,587.09, or your Social Security contributions if higher), not to your gross salary.
| Bracket | Taxable income | Rate (2026 Budget) | Rate with approved cut | Total tax at top |
|---|---|---|---|---|
| 1 | up to €8,342 | 12.5% | 12.2% | €1,042.75 |
| 2 | €8,342–€12,587 | 15.7% | 15.2% | €1,709.22 |
| 3 | €12,587–€17,838 | 21.2% | 20.7% | €2,822.43 |
| 4 | €17,838–€23,089 | 24.1% | 23.6% | €4,087.92 |
| 5 | €23,089–€29,397 | 31.1% | 30.6% | €6,049.71 |
| 6 | €29,397–€43,090 | 34.9% | 34.6% | €10,828.56 |
| 7 | €43,090–€46,566 | 43.1% | 43.1% | €12,326.72 |
| 8 | €46,566–€86,634 | 44.6% | 44.6% | €30,197.05 |
| 9 | over €86,634 | 48% | 48% | — |
The last column is a handy shortcut: it shows the total tax (at Budget rates) for someone whose taxable income sits exactly at the top of each bracket. To work out the tax on any amount, take the total at the top of the bracket below yours and add the slice inside your bracket multiplied by its rate.
The 2026 rate cut
In October 2026 Parliament approved lower rates for brackets 1 to 6 (0.3 to 0.5 points), backdated to 1 January 2026. At the time of writing the law still awaits publication in the Diário da República, so we show both columns. If it takes effect as approved, it will apply when 2026 tax is assessed (returns filed April–June 2027), with any over-withholding coming back as a refund.
Our calculator lets you switch between the Budget rates and the rates with the cut, so you can see both results until the law is published.
Marginal vs average rate
Your marginal rate is the rate on your last euro; your average rate is total tax divided by taxable income, and it is always lower. Moving into a higher bracket never reduces your net income: only the part above the threshold pays the higher rate. Going from €29,000 to €30,000 of taxable income, the tax on the first €29,397 does not change at all; only the €603 above it pays 34.9%.
Worked examples
€20,000 taxable income (roughly €24,600 gross for an employee): €8,342 × 12.5% = €1,042.75; €4,245 × 15.7% = €666.47; €5,251 × 21.2% = €1,113.21; €2,162 × 24.1% = €521.04. Total €3,343.47, an average rate of 16.72% against a marginal rate of 24.1%. With the cut: €3,260.15 (€83.32 less).
€35,000 taxable income: €6,049.71 up to €29,397, plus €5,603 × 34.9% = €1,955.45. Total €8,005.15 (average 22.87%). With the cut: €7,858.04 (€147.11 less).
The official shortcut gives the same result: income × bracket rate − a fixed deduction (€1,476.53 in bracket 4, €4,209.85 in bracket 6). Remember this is the gross tax before tax credits such as general expenses, health or dependants — see our IRS deductions guide.
Married couples: income splitting
Couples filing jointly add their taxable incomes, divide by two, apply the brackets and multiply by two (article 69). With €50,000 joint taxable income they pay 2 × €4,682.24 = €9,364.48, against €13,858.28 for one person on €50,000. More in joint or separate tax return.
Solidarity surcharge and tax-free minimum
Above €80,000 of taxable income (article 68-A) an extra 2.5% applies up to €250,000 and 5% above that (€500 extra on €100,000). At the other end, the tax-free minimum (mínimo de existência, €12,880 in 2026) means minimum-wage earners pay no IRS. Madeira and the Azores apply their own, lower rates.
Common mistakes
- Applying your bracket's rate to all your income.
- Using gross salary instead of taxable income.
- Confusing brackets with the monthly withholding tables, which only approximate the final tax.
- Forgetting tax credits, which come off after the brackets.
- Treating the rate cut as final before it is published.
FAQ
Can a pay rise leave me worse off?
No. Only the euros above the threshold pay the higher rate, so net pay always rises.
Do brackets apply to my monthly salary?
No, they apply to annual taxable income. Each month your employer uses withholding tables instead.
When would I see the rate cut?
If published as approved, in your 2026 assessment in 2027, as a bigger refund or a smaller bill.
Does IRS Jovem change the brackets?
No. It exempts part of your income; the exempt part still counts when setting the rate for the rest. See IRS Jovem.
Run the numbers with your own figures
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