IRS tax tables 2026 in Portugal how much will you actually take home this year?

Every month, before your salary reaches your bank account, the State takes a slice. That slice — the IRS withholding tax (retenção na fonte) — is calculated using tables published by the Government at the start of each year. For 2026, these tables took effect on 1 January, reflecting the changes introduced by the State Budget (Orçamento do Estado).

In practice, most taxpayers know they pay "something" towards IRS each month, but few can explain how much or why. This article closes that gap — with the real numbers, the calculation formula and a simulation you can replicate with your own payslip.

What changed in the 2026 IRS tables

Three key changes directly affect your net salary in 2026:

The minimum subsistence threshold (mínimo de existência) rose to €12,880, keeping pace with the increase in the national minimum wage to €920. Anyone earning the minimum wage continues to be exempt from withholding. The limits of all nine brackets were updated by 3.51%, preventing nominal pay rises from pushing workers into higher brackets — the so-called "fiscal drag" effect. Marginal rates for brackets 2 to 5 dropped by 0.3 percentage points, delivering a real tax cut for incomes between €8,342 and €29,397 per year. The 23% flat withholding rate for self-employed professionals listed under article 151 of the CIRS (reduced from 25% in 2025) remains unchanged.

IRS 2026 brackets: the official table

Source: Article 68 of the CIRS, as amended by the 2026 State Budget.

Important: these brackets apply to taxable income (rendimento coletável), calculated after specific deductions — not to gross salary. Confusing the two is the most common mistake we encounter at Fed Finance when discussing salary packages with candidates.

At what salary level does withholding begin in 2026?

Not all incomes are subject to withholding. The starting thresholds vary by family situation:

Source: Doutor Finanças, based on Government tables (Despacho n.º 233-A/2026).

If your gross monthly pay falls below these figures, your employer does not withhold IRS. However, this does not mean you will owe no tax at year-end. Withholding is an advance payment, not the final tax bill.

Simulation: how much does a single employee earning €1,500 gross actually pay?

The official formula is: (Monthly salary × Marginal rate) – Fixed deduction – (Additional deduction × number of dependants)

Take the case of Marta, 29, single, no dependants, working as an accounting technician in Lisbon on a gross salary of €1,500.

Consulting the withholding table for "Single / Married two earners, no dependants", the bracket applicable to her monthly income shows a marginal rate of 22.80% and a fixed deduction (parcela a abater) of €186.66.

Calculation: (€1,500 × 22.80%) – €186.66 = €342.00 – €186.66 = €155.34 IRS withholding

Add the 11% Social Security contribution (€165), and the result is a net salary of approximately €1,179.66.

If Marta had one dependant, the additional deduction per dependant (€21.43) would reduce withholding to roughly €133.91, raising net pay to approximately €1,201. That is €21 per month — €294 per year — that many employees lose simply because they have not communicated their family situation to their employer.

What most IRS articles do not explain

Withholding tax is only an advance payment. When you file your annual IRS return (between April and June of the following year), the tax authority reconciles the account: if you overpaid, you receive a refund; if you underpaid, you settle the difference.

In 2025, many taxpayers were surprised by smaller refunds than expected. This happened because withholding tables were adjusted mid-year, meaning the State withheld less each month — and consequently, the "bonus" at year-end was smaller. In 2026, the tables apply from January with no mid-year changes anticipated, which should normalise the situation.

For anyone working in finance roles, we recommend checking the rate applied by your employer on your February payslip — that gives enough time to correct any errors before they accumulate throughout the year.

Self-employed workers: a different rule

Freelancers issuing recibos verdes under article 151 of the CIRS (consultants, accountants, lawyers, engineers, among others) remain subject to a flat withholding rate of 23%, applied to services rendered to entities with organised accounting. This rate was reduced from 25% by the 2025 State Budget and remains unchanged in 2026.

For those considering the transition between employment and self-employment — a situation we regularly see at Fed Finance — the difference in tax treatment is significant and warrants an individualised simulation before making any decision.

FAQ

Are IRS brackets and withholding tables the same thing? 

No. The brackets (article 68 of the CIRS) are used to calculate the final annual tax. The withholding tables determine how much is deducted from your salary each month. The former are applied once a year in your tax return; the latter are applied every month on your payslip.

Can I ask my employer to withhold more IRS than the table indicates? 

Yes. You may request a higher withholding rate, which can be useful if you have additional income sources (such as rental income) or if you prefer to receive a larger refund rather than managing the cash flow throughout the year.

I received a promotion mid-year. Does the table change automatically? 

The table is applied to monthly income, not annual income. When your salary increases, your employer automatically recalculates the monthly withholding based on the new amount and the table in force. No action is required on your part — the adjustment is immediate.

Does IRS Jovem still exist in 2026? 

Yes. Workers up to age 35 who meet the qualifying conditions can benefit from a partial IRS exemption during their first years of employment income. The regime continues with the same rules in 2026.

Resources & Useful documents

• Portal das Finanças — IRS Withholding Tables
• State Budget 2026 — Announcement on withholding tables
• PwC Portugal — IRS Tax Guide 2026

Sources

• Despacho n.º 233-A/2026, published on Portal das Finanças (2026 withholding tables).
• Article 68 of the CIRS, as amended by the 2026 State Budget (brackets and rates).
• PwC Portugal, IRS Tax Guide 2026 (analysis of OE 2026 changes).
• Doutor Finanças, "Já foram publicadas as tabelas de retenção na fonte para 2026", January 2026.
• Cofidis Contas Connosco, "Escalões de IRS 2026: conheça todos os valores", January 2026.
• ECO, "Já estão publicadas tabelas de retenção de IRS para 2026", January 2026.