Published: 28 October 2026 · Updated: 28 October 2026
A single employee on a €40,000 salary in Portugal keeps about €27,451 per year — €2,288 per month after 2026 IRS tax and Social Security. Enter your own salary below.
Portugal's IRS scale has nine brackets — and the €4,587.09 deduction comes off before any of them apply. Skip that deduction and you overstate the tax by hundreds of euros. The calculator below applies it correctly, plus the 11% employee Social Security charge.
Researched by MixKhazana Team · Last updated 28 October 2026 · Data: Código do IRS art. 68 as amended by Law 73-A/2025 (2026 State Budget), Autoridade Tributária, PwC Portugal tax summary
Portugal's IRS is a nine-bracket progressive tax, and the two details everyone gets wrong are the deduction and the base. First, the specific deduction of €4,587.09 comes off gross pay before any bracket applies — a €40,000 salary is taxed on €35,412.91. Second, each rate touches only its own slice: 12.5% on the first €8,342, 15.7% to €12,587, 21.2% to €17,838, 24.1% to €23,089, 31.1% to €29,397 and 34.9% to €43,090, then 43.1%, 44.6% and 48% at the top. On top of IRS, employees pay 11% Social Security. The 2026 scale is set by article 68 of the IRS Code as amended by the 2026 State Budget (Law 73-A/2025), and PwC's Portugal summary confirms the same nine rates for 2026.
Watch the forward-looking trap: a September 2026 proposal would cut the first six brackets slightly, but it is not law yet, so this page deliberately uses the current-law scale and says so. If you are relocating, compare with our Spain salary after tax calculator — and ExpatMoneyEU's expat finance guides cover Portuguese banking and relocation costs.
João, single, earns €40,000 in Lisbon and is paid in 12 monthly instalments in 2026:
Portugal's effective rate looks high because the 31.1% and 34.9% bands start early — by €30,000 of taxable income you are already in the 31.1% band. Tax credits (dependents, health, education) would improve this result; this model shows the no-credit baseline.
| Figure | 2026 value |
|---|---|
| IRS brackets | 12.5% → 48% (9 brackets) |
| Specific deduction (employee) | €4,587.09 |
| Employee Social Security | 11% |
| Employer Social Security | 23.75% (not deducted from pay) |
| Solidarity surcharge | 2.5% above €80,000 taxable |
| Top IRS rate | 48% above €86,634 |
A single employee on €40,000 in Portugal in 2026 keeps about €27,451 a year — €2,288 a month on a 12-payment view. Deductions are IRS tax €8,149 and Social Security €4,400. Enter your own salary in the calculator above for a personal estimate.
Portugal's 2026 IRS scale (current law, State Budget Law 73-A/2025, article 68 of the IRS Code) runs from 12.5% up to €8,342 through 15.7%, 21.2%, 24.1%, 31.1% and 34.9% up to €43,090, then 43.1%, 44.6% and 48% above €86,634. Each rate applies only to the slice inside its bracket.
Employees get a specific deduction of €4,587.09 from gross pay before the IRS brackets apply. So a €40,000 salary is taxed on €35,412.91, not on the full €40,000. Tax credits for dependents, health and education would lower the bill further and are not included here.
An employee pays 11% of gross pay to Segurança Social; the employer pays 23.75% on top, which does not reduce your take-home. On €40,000, the employee share is €4,400 a year.
Portugal traditionally pays 14 monthly instalments — 12 months plus holiday and Christmas allowances. This calculator divides by your chosen frequency, so pick 14 if your contract pays that way; the annual take-home is the same either way.
No. A September 2026 proposal would trim the first six brackets by 0.3–0.5 points (for example 12.5% to 12.2%), but it was not yet law when this page was written, so the calculator uses the current-law 2026 scale. If the cut passes, your bill falls slightly — by roughly €171 a year at €43,090 of taxable income.
The IRS brackets and the €4,587.09 specific deduction come from article 68 of the Código do IRS as amended by the 2026 State Budget (Law 73-A/2025), as published by the Autoridade Tributária and summarised by PwC's Worldwide Tax Summaries for Portugal. Rates are for mainland Portugal; Madeira and the Azores have lower rates.