Portugal has revised income tax deductions for employees and pensioners from 1 January 2026.
The Portuguese Tax and Customs Authority issued the Order of 5 January 2026, introducing new monthly withholding tax tables reflecting the updated personal income tax brackets set by the 2026 State Budget Law.
Rates now range from 12.50% on income up to EUR 8,342 to 48.00% for earnings above EUR 86,634.
The revised tables also incorporate an increase in the minimum subsistence level to EUR 12,880 and a rise in the guaranteed minimum monthly wage to EUR 920. The schedules apply progressive marginal rates to align monthly deductions with expected annual tax liabilities, protecting net income following salary increases.
The official guidelines provide detailed formulas and tables for employees and pensioners, factoring in civil status, number of dependents, disability status, overtime pay, and specialised deductions, including provisions for military veterans with disabilities.
2026 Portugal IRS Monthly Withholding Tax Brackets
| Taxable Income (EUR) | Withholding Rate (%) |
| Up to 8,342 | 12.50 |
| 8,342 – 12,587 | 15.70 |
| 12,587 – 17,838 | 21.20 |
| 17,838 – 23,089 | 24.10 |
| 23,089 – 29,397 | 31.10 |
| 29,397 – 43,090 | 34.90 |
| 43,090 – 46,566 | 43.10 |
| 46,566 – 86,634 | 44.60 |
| Over 86,634 | 48.00 |
The new rates are effective from 1 January 2026.
