Personal Income Tax
IRS
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The English name for IRS (Imposto sobre o Rendimento das Pessoas Singulares): the annual tax on individual income in Portugal, including freelance and self-employment earnings.
If you're coming to Portugal from another country and someone mentions "IRS," they're not talking about the American tax agency. In Portugal, IRS is the personal income tax, Imposto sobre o Rendimento das Pessoas Singulares. Every individual who earns income in Portugal is subject to it.
What expats need to know
The mechanics of personal income tax in Portugal will feel familiar if you've filed taxes elsewhere, but the details differ in ways that matter.
Progressive brackets work the same way as in most European countries. Rates start at 12,5% and climb to 48%. Each band applies only to the income within its range. Crossing into a higher bracket doesn't increase the rate on everything below.
The simplified regime changes the math. Most solo entrepreneurs in Portugal operate under the regime simplificado. Instead of deducting individual expenses, the tax authority applies a flat coefficient: only 75% of your income from a profession listed in the Art. 151.º CIRS table, 35% of other services income and 15% of income from goods sales and restaurant and hotel services counts as taxable. For service income, documented expenses (together with a fixed deduction or, if higher, your Social Security contributions counted up to 10% of that income) have to reach 15% of that income, or the shortfall is added back (the 15% expense rule). This means your effective tax rate is significantly lower than the bracket percentages suggest.
For example, if you earn 40,000 euros as a software developer (programador informático, an Art. 151.º profession) and meet the 15% rule, the coefficient leaves 30,000 euros (75%). Social Security contributions above 10% of your gross are then deducted from that (Art. 31.º n.º 2 CIRS), and the tax is calculated on what remains, not on the full 40,000.
Withholding: prepaying your tax bill
When a client that keeps (or is required to keep) organised accounting in Portugal pays you, as every Portuguese company does, it must withhold a percentage of the payment and send it to the tax authority, unless you qualify for a dispensation (Art. 101.º-B CIRS). Since 2025, the rate for the professions in the Art. 151.º table is 23% (reduced from 25% by OE2025); other services are withheld at a lower rate. This is an advance on your personal income tax, credited against your annual liability. If you work mainly with foreign clients, no withholding happens, you pay the full amount when you file.
For the full technical breakdown of how IRS works, brackets, and filing, see the IRS entry.
To estimate your personal income tax liability before you file, use the free Portugal tax calculator. No signup needed.
Perguntas frequentes
What is the personal income tax in Portugal called?
It's called IRS, Imposto sobre o Rendimento das Pessoas Singulares. You'll see this acronym on every tax form, government portal, and official communication. Think of it as the Portuguese equivalent of income tax in the UK or Einkommensteuer in Germany, but only for individuals.
How much personal income tax will I pay as a freelancer in Portugal?
It depends on your total taxable income. IRS brackets range from 12,5% to 48%. On the simplified regime, only a portion of your gross income is taxable: 75% for the professions listed in the Art. 151.º CIRS table, 35% for most other services, 15% for goods sales and restaurant and hotel services. So if you earn 30,000 euros from an Art. 151.º profession, and your documented expenses meet the 15% rule, the coefficient leaves 22,500 euros. Social Security contributions above 10% of your gross are then deducted from that, and what remains enters the tax brackets.
Is personal income tax deducted from my invoices automatically?
Not automatically, but a client that keeps (or is required to keep) organised accounting in Portugal, as every Portuguese company does, must withhold a percentage, unless you qualify for a dispensation (23% for the professions in the Art. 151.º table since 2025, lower for other services) from your payments and send it to the tax authority. This withholding (retenção na fonte) is an advance payment of your personal income tax, not an extra charge. Private individuals and foreign clients pay you the full amount, and you settle the tax through your annual return.
When is personal income tax due in Portugal?
You file your annual IRS return between April and June for the previous year's income. The tax authority issues the assessment by 31 July, and any tax you owe beyond what was already withheld is due by 31 August.
How does Portugal's personal income tax compare to other European countries?
Portugal's top bracket rate is 48% (a solidarity surcharge applies on top for very high incomes). On the simplified regime, though, the coefficients reduce the tax base for freelancers: for the professions in the Art. 151.º table only 75% of services income is taxable, and for other services 35%, which makes the effective rate lower than the headline brackets suggest.
Termos relacionados
Portugal's personal income tax: the annual tax that solo entrepreneurs pay on their individual income, declared each spring for the previous year's earnings.
Regime SimplificadoRegime Simplificado de Tributação · Simplified Tax RegimePortugal's simplified IRS regime for self-employed individuals, where taxable income is calculated using fixed coefficients applied to gross revenue. Companies have a separate simplified regime under IRC.
Retenção na FonteWithholding TaxIncome tax that a client with organised accounting (every Portuguese company) withholds when it pays a solo entrepreneur for services, and sends directly to the tax authority as an advance on the freelancer's IRS.
Trabalhador IndependenteSelf-Employed WorkerThe Portuguese term for an independent worker or sole entrepreneur, the equivalent of a freelancer or sole trader in other countries.