As an employee, self-employed worker or retiree living in Portugal, you will have to pay income tax, called IRS. This is also true for other types of income, and like in other countries, Portuguese income tax is progressive and is directly withheld at source by the employer who then pays it to the State. In 2026, there are 9 tax brackets ranging from 12.5% to 48%, and they start from the first euro earned, with certain possible tax deductions. What are the tax brackets in Portugal? How do you calculate income tax? I am Lisbob, the expat assistant, and I tell you everything about income tax in Portugal in 2026.
How to file and submit your online IRS income tax return in Portugal, step by step
Since few years the IRS income tax declaration is entirely online in Portugal. The automatic IRS option is undoubtedly an option that greatly facilitates this obligation since it allows you to validate your declaration in a few clicks. If you want, you can trust fiscal authorities and let the declaration fill in automatically : you will just have to validate the declaration at the end of the process. Lisbob, the expatriate assistant in Portugal, tells you all about how to complete your automatic IRS tax return online, step by step. Because the sooner you validate and submit your return, the sooner you will receive a refund if you are entitled to it.
Working in Portugal ? Here is why your net salary will drop from January
The Portuguese Parliament approved the new fiscal law 2018 that includes the end of the system of payment of the subsídios of Ferias and Natal spread over the year and this from January 1th. At the end of the year the net amount received will be the same but the effects for the first months of the year will be more or less important depending on your income and which option you choosed regarding subsídios. The net amount that you will receive at the end of January will be lower than last year (if you have opted for the spread of the payment of subsídios). This measure also applies to public employees and retirees in 2018.


