Portugal IRS brackets for 2026

Portuguese income tax on 2026 earnings is still progressive, but the scale is not the one many payroll blogs still reprint from 2024 or early 2025. Lei n.º 73-A/2025, of 30 December, the State Budget for 2026, rewrote article 68 of the IRS Code. The consolidated table published by the Tax Authority (Autoridade Tributária) has nine bands. The top rate is still 48 percent, and there is a distinct 44.6 percent band that did not exist in the eight-band sketch some calculators kept using.

This page is about the annual settlement scale for mainland Portugal. It is the scale that matters when the tax return for 2026 income is assessed in 2027. The amount your employer holds back each month comes from a different instrument, Despacho n.º 233-A/2026, of 6 January. Both are official. They are not interchangeable. If you only need a payslip estimate, read the payslip guide after this one, then try the employee calculator with its limitations in mind.

The 2026 mainland scale

Article 68 sets two columns. Column A is the marginal rate, applied to the slice of taxable income inside the band. Column B is the average rate at the top of that band. In payroll and in most explanations people use an equivalent shortcut: tax equals taxable income times the marginal rate, minus a fixed parcela a abater. The parcela is not a personal allowance. It is the arithmetic that stops the higher rate from falling on income that already sat in lower bands.

Worked example: €20,000 of taxable income

Take a single person whose 2026 rendimento coletável, after the specific deduction and before tax credits, is €20,000. That sits in the fourth band (above €17,838 and up to €23,089), so the marginal rate is 24.1 percent and the parcela is €1,476.52.

1. Gross tax before the parcela: €20,000 × 0.241 = €4,820.00.
2. Subtract the parcela: €4,820.00 − €1,476.52 = €3,343.48.
3. Effective rate on this step: €3,343.48 / €20,000 = 16.72 percent, not 24.1 percent.

The same result comes from splitting the income the way article 68 describes. The first €17,838 is taxed at the average rate of the third band, 15.823 percent, which is about €2,822.51. The remaining €2,162 is taxed at 24.1 percent, which is about €521.04. Adding those slices gives about €3,343.55. The few cents of difference are rounding. What matters is the shape: only the top slice bears the headline rate.

Now move the same person to €50,000 of taxable income. That falls in the 44.6 percent band, between €46,566 and €86,634. Tax is €50,000 × 0.446 − €8,441.70 = €22,300 − €8,441.70 = €13,858.30, an effective rate of 27.7 percent before tax credits. Under the old eight-band table some tools still had in early 2026, income in this range was being pushed toward a 43.1 percent band with a different ceiling. That is why the 44.6 percent band is not a cosmetic change for higher salaries.

Taxable income is not your gross salary

Employees and pensioners do not put their contract salary straight into the table. Article 25 gives a specific deduction equal to the greater of 8.54 times the IAS or the mandatory social-security contributions. The Tax Authority's January 2026 newsletter states the IAS for 2026 as €537.13 under Portaria n.º 480-A/2025/1, so 8.54 × €537.13 = €4,587.09.

Social security for a general employee is 11 percent. Annual contributions exceed €4,587.09 only when annual gross pay exceeds about €41,701 (€4,587.09 / 0.11). Below that, the legal floor is €4,587.09, not the contributions themselves. A worker on €2,000 a month for 14 months has €28,000 of gross pay and €3,080 of employee contributions. The specific deduction is the floor, €4,587.09, so a simplified taxable income is €28,000 − €4,587.09 = €23,412.91. Tax on that figure, using the table above and ignoring dependants, joint taxation and the minimum existence, is €23,412.91 × 0.311 − €3,092.75 = €4,188.67.

The SalarioBox employee calculator currently subtracts the 11 percent contribution and does not apply the €4,587.09 floor. On this €2,000 example it therefore starts from a higher taxable amount (€24,920) and produces a higher tax. The gross-to-net guide shows both the legal illustration and what the tool is actually doing. Treat the tool as a sketch. Treat this article as the scale.

Monthly withholding is a second system

Since the second half of 2023, mainland withholding has used marginal rates and a parcela a abater as well, so a small raise does not produce a smaller net payslip. Despacho n.º 233-A/2026 approves the 2026 tables for employment income and pensions paid to mainland residents. The preamble says the tables reflect the new article 68 bands, a minimum existence of €12,880, and protection of the guaranteed minimum wage as it moves from €870 to €920.

There is not one withholding percentage. Tables I, II and III cover employment, split by whether the person is unmarried, married with two earners, or the sole earner in a couple, and by the number of dependants. Disability has further tables. The monthly tax is, in outline, remuneration times the marginal rate for that row, minus the parcela for that row, minus an extra parcela per dependant where the despacho allows it. The official Excel on Portal das Finanças is the document payroll must use. Copying one row from a blog into a contract is how people end up with the wrong net.

Withholding is an advance. The annual return compares it with the tax from article 68 after deductions. A person who had health, education or rent credits, or who was over-withheld because the employer used the wrong dependant count, often receives a refund. Someone with untaxed extra income, or who asked for a higher voluntary withholding rate under article 98, can still have a balance to pay. The filing window for 2025 income, which uses the previous scale, runs from 1 April to 30 June 2026. The calendar is in the filing guide.

Regions, households, and a rate cut that was still a proposal

The Azores and Madeira publish their own withholding tables and apply regional reductions to the general rates. Nothing on this page is an Azores or Madeira figure. A couple can be taxed jointly, which splits income for the progressive scale under the quotient rules and then doubles the tax. That can help when one spouse earns much more than the other, and it can hurt when both already sit in similar bands. Dependants do not move you into a lower band. They are a credit against the tax bill under article 78-A, described in the dependants guide.

On 17 September 2026 the Government published a simulation proposing lower marginal rates for the rest of 2026, in the order of 0.3 to 0.5 percentage points on several lower and middle bands, with the same income thresholds. When these guides were written, on 29 September 2026, the consolidated article 68 page on Portal das Finanças still showed the Lei n.º 73-A/2025 rates, including 12.5, 15.7, 21.2, 24.1, 31.1, 34.9, 43.1, 44.6 and 48 percent. SalarioBox does not apply the September proposal. If a later diploma changes the rates, the statute wins and this page should be re-read against it.

How to use the scale without fooling yourself

• Start from annual gross pay, including holiday and Christmas pay if you receive them. Twelve times the monthly base understates a 14-month contract. See holiday and Christmas pay.
• Subtract the greater of €4,587.09 and mandatory social security. Do not also subtract a flat personal allowance from another country.
• Apply one band, using the parcela for that band. Do not multiply the whole income by 48 percent, and do not add the rates together.
• Only then subtract tax credits: dependants, the general family-expenses credit, health, education, rent and the e-Fatura incentives, subject to the global cap in article 78.
• Compare the result with withholding. The difference is the likely refund or extra payment, before any penalty or interest.

Two salaries that look identical in January can diverge by December because of a bonus, a dependant born during the year, IRS Jovem, or days of meal allowance paid above the exempt limit. The brackets are the skeleton. They are not the whole return.