How net pay is calculated in Portugal
Portuguese employees receive 14 salaries a year: 12 monthly payments plus holiday pay (subsídio de férias, usually in June or July) and Christmas pay (subsídio de Natal, by December). Each subsidy is normally one monthly salary. Some employers pay them in twelfths (duodécimos) with every salary. That changes when the money arrives, but the yearly net stays the same.
- Social security (Segurança Social): 11% of every payment, including both subsidies. There is no ceiling. The employer adds 23.75% on top.
- IRS withholding (retenção na fonte) uses the official 2026 tables: monthly pay × marginal rate − a fixed deduction − a deduction per dependant (€34.29 for a single parent, €21.43 per spouse when both earn, €42.86 for a sole earner). With three or more dependants the rate is one point lower. The holiday and Christmas pay are withheld separately with the same table. The amount withheld is rounded down to the whole euro.
- On the mainland there is no withholding up to €920 a month (the 2026 minimum wage) for single people, and up to €991 for a married sole earner. The Azores (€966) and Madeira (€980) have their own, lower tables.
Examples for 2026 (mainland, per payment)
| Gross / month | Situation | IRS | Social security | Net |
|---|---|---|---|---|
| €920 | single | €0 | €101.20 | €818.80 |
| €1,600 | single | €192 | €176.00 | €1,232.00 |
| €1,600 | married, both earn, 2 children | €149 | €176.00 | €1,275.00 |
| €3,000 | single | €663 | €330.00 | €2,007.00 |
At €1,600 a month the annual gross is €22,400 and the annual net €17,248. The same salary leaves €1,304 net in the Azores and €1,307 in Madeira.
IRS Jovem and the annual tax return
Employees aged 35 or under who are not claimed as dependants can use IRS Jovem. In the first year of income 100% of the salary is exempt from IRS, then 75% (years 2–4), 50% (years 5–7) and 25% (years 8–10). The exemption is capped at 55 × IAS, which is €29,542.15 in 2026. Your employer applies the table's effective rate to the non-exempt part only if you have told it you qualify.
Withholding is an advance payment. In the annual return (filed April–June 2027) the 2026 brackets apply, from 12.2% to 48%. They include the rate cut of Decree-Law 212/2026. The return also counts deductions for dependants, health, education and household expenses, and the difference comes back as a refund or is paid. One-off: to pass on that rate cut, withholding on pay made in November 2026 was halved, except for very high salaries. The calculator shows the regular tables.
Converting a Portuguese hourly wage
The Labour Code (art. 271) links hourly and monthly pay as hourly = monthly × 12 ÷ (52 × weekly hours). The calculator therefore converts monthly gross = hourly rate × weekly hours × 52 ÷ 12, with 40 hours as the standard full-time week. The holiday and Christmas pay come on top, so annual gross = monthly × 14. For example, €10 an hour at 40 hours is €1,733.33 a month and €24,266.67 a year.
Official sources: Despacho n.º 233-A/2026 (withholding tables, mainland), Segurança Social contribution rates.