Portugal Income Tax Calculator (PT) 2024

Understanding The Portugal Income Tax

Thinking of relocating to Portugal? Why not enjoy the Portugal income tax goodies as well? Here is what you need to know.

Portugal, with its rich history, beautiful landscapes, and warm climate, is a popular destination for expats.

If you’re considering relocation, it’s important to understand the country’s personal income tax system.

This article will guide you through Portugal’s tax brackets, deductions, benefits, and the criteria for tax residency.

Tax Residency in Portugal

You’re considered a tax resident in Portugal if you meet one of the following criteria:

• You spend more than 183 days in Portugal in any 12-month period. The days don’t have to be consecutive.
• You have a home in Portugal at your disposal, suggesting it is your habitual residence as of 31st December of that year.

As a tax resident, you’re required to pay tax on your worldwide income in Portugal.

This includes income from employment, self-employment, rental income, interest, dividends, and other income.

Tax Brackets in Portugal

Portugal uses a progressive tax system for personal income tax, meaning the more you earn, the higher your tax rate. As of 2024, the tax brackets are as follows:

• Up to €7,112: 14.5%
• Over €7,112 to €10,732: 23%
• Over €10,732 to €20,322: 28.5%
• Over €20,322 to €25,075: 35%
• Over €25,075 to €36,967: 37%
• Over €36,967 to €80,882: 45%
• Over €80,882: 48%

Tax Deductions and Benefits

Portugal offers several tax deductions and benefits to reduce your taxable income. These include:

• Health expenses: You can deduct 15% of your health expenses up to €1,000.
• Education expenses: You can deduct 30% of your education expenses up to €800.
• Housing expenses: If you have a mortgage, you can deduct 15% of the interest paid up to €296.
• Pension contributions: You can deduct up to €4,104 in contributions to state-approved pension schemes.
• Alimony payments: If you’re making alimony payments, these can be fully deducted from your taxable income.

Final Thoughts

In conclusion, understanding Portugal’s personal income tax system is crucial for anyone planning to live or work in the country.

While the system may seem complex, with a clear understanding of the tax brackets, deductions, and residency rules, it’s amongst the simplest in the entire EU.

Another advantageous tax system is in Cyprus — read here.