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Portugal Freelancer Tax Calculator 2026 (Simplified Regime)

As of 2026, freelancers in Portugal’s simplified regime pay IRS on 75% of professional-services income — only 37.5% in their first year and 56.25% in their second — at progressive rates from 12.5% to 48%, plus social security of 21.4% on 70% of income after a 12-month exemption for new registrations.

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How freelancer tax works in Portugal’s simplified regime

Portugal taxes self-employed residents in two separate systems: IRS (personal income tax, assessed annually) and Segurança Social (social security, paid from quarterly declarations). Under the simplified regime — the default for anyone earning up to €200,000 a year — you do not deduct your real expenses for IRS. Instead, the law assumes your costs via a coefficient: professional services listed in article 151 of the tax code are taxed on 75% of gross income, other services on 35%, and sales of goods or hospitality on 15%.

Two corrections modify that headline number. First, the startup discount: in your first tax year the coefficient is halved and in your second it is cut by a quarter, as long as you have no employment or pension income alongside. Second, the 15% expense-justification rule: of the 25% the state assumes as your costs, 15 percentage points must actually be covered by an automatic allowance of €4,587.09 (8.54 × IAS) plus documented business expenses. Below roughly €30,581 of income the allowance absorbs this entirely; above it, undocumented shortfall is added back to your taxable base. Mandatory social security contributions are also deductible in the part exceeding 10% of gross income.

The resulting taxable income goes through the 2026 IRS brackets below. Income over €80,000 additionally pays a solidarity surtax of 2.5% (5% over €250,000). Social security is simpler: after the first-year exemption, you pay 21.4% of 70% of your service income, with the monthly base capped at 12 × IAS (€6,445.56 in 2026). This calculator averages the quarterly mechanics over the year.

Portugal IRS brackets — 2026

Applied to taxable income (after the coefficient), mainland Portugal, income year 2026 (Lei n.º 73-A/2025).

Bracket Taxable income Marginal rate
1 Up to €8,342 12.5%
2 €8,342 – €12,587 15.7%
3 €12,587 – €17,838 21.2%
4 €17,838 – €23,089 24.1%
5 €23,089 – €29,397 31.1%
6 €29,397 – €43,090 34.9%
7 €43,090 – €46,566 43.1%
8 €46,566 – €86,634 44.6%
9 Over €86,634 48%

In 2026 bracket thresholds rose 3.5% versus 2025 and the rates of the 2nd–5th brackets fell by 0.3 percentage points; the solidarity surtax bands (€80,000 / €250,000) are unchanged.

Assumptions & limits of this estimate

Frequently asked questions

Who qualifies for Portugal’s simplified regime in 2026?

Self-employed workers (Category B) whose gross business income did not exceed €200,000 in the previous year. It is the default regime when you register — you only leave it if you cross the threshold or actively opt for organized accounting (contabilidade organizada), which taxes real profit instead of a fixed coefficient.

Do I really pay tax on only 75% of my income?

Mostly, but with a catch: for professional services, 25% of income is excluded as assumed expenses, yet 15 percentage points of that exclusion must be backed by an automatic allowance of €4,587.09 (8.54 × IAS in 2026) plus documented expenses. In practice, up to roughly €30,581 of annual income the allowance covers the requirement automatically; above that, any shortfall in documented expenses is added back to your taxable income. This calculator applies the rule for you.

What discounts do new freelancers get?

Two separate ones. First, the taxable coefficient is cut by 50% in your first tax year and 25% in your second (so professional services are taxed on 37.5% and then 56.25% of income instead of 75%), provided you have no employment or pension income and did not restart an activity closed within the last five years. Second, social security contributions are fully exempt for your first 12 months of activity.

How are social security contributions calculated after the exemption?

You file quarterly declarations, and contributions are 21.4% of your “relevant income” — 70% of what you invoiced for services (20% for sales of goods). The monthly contribution base is capped at 12 × IAS, which is €6,445.56 in 2026, so contributions max out at about €1,379.35 per month regardless of how much you earn.

Does this calculator include VAT (IVA)?

No — VAT is a separate tax on your invoices, not on your profit. Many new freelancers qualify for the Article 53 VAT exemption if their annual turnover stays under the legal threshold (€15,000). Whether you charge VAT does not change the IRS and social security estimates shown here.

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