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Pension Tax Withholding

Pensions have withholding tables of their own. Enter your pension and your situation.

Enter the gross monthly pension, before any deduction.

IRS withheld per month
€151.54
Net pension per month
€1,348.46
Table appliedTable 8
Top marginal rate24.10%
Deductible portion€209.96
Added for dependants€0.00
Effective withholding rate10.10%
The same amount as salary€168.17
Annual pension (14 payments)€21,000.00
IRS withheld over the year€2,121.56
Net pension over the year€18,878.44

At this amount the pension table is gentler than the employment one: it withholds €16.63 less per month than an identical salary. The advantage reverses at around €2,681 a month.

A pension pays no Social Security, so the net above is what reaches your account. A salary would still lose 11% of employee contribution.

The year has fourteen payments, with the extra amounts in July and December. Each is withheld at the rate of an ordinary month, not at the rate of a doubled amount.

Mainland tables for 2026. Dependants only count if declared to whoever pays the pension. Left out are the additions for a dependant with a 60% or greater incapacity and for a spouse in the same situation, the option to withhold at a higher rate, the Azores and Madeira tables, maintenance payments and non-residents.

Pensioners are withheld from different tables

Despacho 233-A/2026 approves eleven withholding tables for mainland Portugal, and pensions occupy the last four. Rule 1(c) assigns table viii to a single person or a married couple with two earners and table ix to a married single earner; rule 1(d) assigns tables x and xi to the same two situations when the holder has a disability, including armed forces disability under Decree-Laws 43/76 and 314/90. The formula is the one in rule 3(b): monthly pension times the bracket top marginal rate, minus that bracket deductible portion, never below zero. Anyone looking up their withholding in tables i, ii or iii finds a number that is not theirs, because those are the employment tables. This calculator uses the four pension tables and always states which one it applied.

Dependants come in through a rule, not a column

The employment tables carry a column with the additional deductible amount per dependant. The pension tables have no such column. What exists instead is rule 5(c): in the situations covered by tables viii to xi, where there are dependants, the deductible portion is increased, per dependant, by €42.86 for a married single earner, €21.43 for a married couple with two earners and €34.29 for a single person. The amounts happen to match the employment columns, but the mechanism is different, and that is exactly why reading a pension table directly never shows the effect of children: it comes from outside the table. The next rule covers armed forces disability, with €18.19 on table x and €36.38 on table xi.

The three-dependant rule does not reach a pensioner

Rule 5(h) grants a one percentage point cut in the top marginal rate to holders with three or more dependants. Note who the rule names: holders of employment income with three or more dependants who fall within the tables of rules 1(a) and 1(b). Those are tables i to vii, the employment ones. Pensions sit in rules 1(c) and 1(d) and are left out. A pensioner with three children therefore does not get the one percentage point cut that an employee in the same family situation does. Concretely, on a €1,500 pension that percentage point would be worth €15.00 a month, or €210.00 across the fourteen payments of the year. It is not the biggest difference between the two regimes, but it is one nobody publishes and one you only see by reading the rule to the end.

Gentler below, heavier above: where the two tables cross

Comparing table viii with table i, which serve exactly the same family situation, the marginal rates match up to a point and the pension deductible portions are larger on every shared row. That means a €1,500 pension is withheld €151.54 where the same amount of salary would lose €168.17. Above €2,361 the tables separate: the pension moves to 43.10% where the salary is still at 38.36%, then 44.60% against 39.69%, 50.50% against 44.95% and 53.00% against 47.17%. The point where the advantage reverses is around €2,681 a month, where table viii 43.10% row crosses table i 38.36% row. Below it a pension is withheld more gently than an identical salary; above it, more heavily. For the married single earner pair the reversal comes far earlier, around €1,227. The calculator shows the difference for your own numbers rather than asserting it in general.

What reaches the account, and why it beats an identical salary

A pension pays no Social Security. A €1,500 salary loses €168.17 of IRS plus €165.00 of employee contribution, leaving €1,166.83; a €1,500 pension loses only the €151.54 of IRS and leaves €1,348.46, which is €181.63 more in the same month. That is the answer to the question many people ask in their first month of retirement, and IRS is only half of it. Over the year a pension is paid fourteen times, with the extra payments in July and December, and rule 10 requires the payer to state the effective rate of each remuneration separately when a payment includes more than one. So the month in which you receive two pensions is withheld as if it were two ordinary months, not at the much higher rate of a doubled amount. That is why the annual total on this page is fourteen times the monthly withholding.

What this calculator does not do, with the amounts for anyone who needs them

Left out, and stated rather than approximated, is the addition in rule 5(a): for each dependant with a permanent incapacity of 60% or more the deductible portion rises by €84.82 for a single person or married single earner and €42.41 for a married couple with two earners, amounts that rules 6 and 7 allow to be multiplied up to three or six times by an option the holder elects and communicates to the payer, which is a choice rather than something derivable from your numbers. Also left out is the €135.71 addition of rule 5(b), for a married single earner whose spouse has an incapacity of 60% or more and no category A or H income, and the option in rule 5(e) to withhold at a higher whole rate under article 98(6) of the IRS Code. Further out of scope are the separate tables for the Azores and Madeira, maintenance payments, which the Despacho itself excludes from tables viii to xi, and non-resident pensioners. And out of scope by nature is the tax for the year: withholding is a monthly advance, and the real reckoning happens in the annual return.

Worked example

A single pensioner with no dependants, a monthly pension of €1,500 and no disability. She falls in table viii, on the row up to €1,869, with a top marginal rate of 24.10% and a deductible portion of €209.96. The withholding is 1,500 × 24.10% − 209.96 = €151.54 a month, an effective rate of 10.10%, leaving her €1,348.46. Across the fourteen payments of the year that is €21,000 gross, €2,121.56 of IRS withheld and €18,878.44 received. The same amount as salary would be withheld €168.17 and would also pay €165.00 of Social Security, leaving €1,166.83: a difference of €181.63 in the same month. With two dependants the deductible portion rises by €68.58 and the withholding falls to €82.96. Had the pension been €3,000, the comparison flips: €678.26 of IRS against €663.14 on an identical salary.

Frequently asked questions

At what point does a pension start paying IRS?
Withholding starts only above €920 a month, the first bracket of tables viii and ix. If you have a permanent incapacity of 60% or more, table x or xi applies and the threshold rises sharply: €1,816 for a single person or married couple with two earners and €2,257 for a married single earner. No withholding does not mean no tax: it only means no monthly advance, and the final reckoning happens in the annual return.
Why is less taken from my pension than was taken from my salary?
Two reasons add up. The first is that a pension pays no Social Security, unlike a salary, which loses 11% straight away. The second is that the pension tables carry larger deductible portions on the rows where they share a rate with the employment tables, which lowers the withholding. At higher amounts the second reason reverses: above roughly €2,681 a month the pension table has higher marginal rates than the employment one and withholds more.
Do my children lower the withholding on my pension?
They do, but by a different route than on a salary. The pension tables have no per-dependant column; rule 5(c) of the Despacho adds €34.29 to the deductible portion per dependant if you are single, €21.43 if married with two earners and €42.86 if married as the single earner. You have to declare your dependants to whoever pays the pension, because they do not guess.
Does a pensioner with three or more children get the one percentage point cut?
No. Rule 5(h) grants that cut only to holders of employment income within the tables of rules 1(a) and 1(b), which are tables i to vii. Pensions sit in rules 1(c) and 1(d) and are not covered. On a €1,500 pension that percentage point would be worth €15.00 a month, or €210.00 across the year.
In July and December I receive two pensions. Is much more withheld that month?
Not at the rate of a doubled amount. Rule 10 of the Despacho requires that, where a payment includes more than one remuneration (as happens in the months of the additional payments), the payer state the effective rate of each separately. Each pension is withheld at the rate it would carry on its own, so the month is worth twice an ordinary month and no more. That is also why the annual total on this page is fourteen times the monthly withholding.
I draw a pension and still work. Does this calculator help?
It covers the pension side, which is withheld from its own tables, while the salary is withheld separately from the employment tables in the withholding calculator. What the two advances together do not guarantee is that the year ends square: people who combine income from both categories usually face an adjustment in the annual return, because each payer withholds as though it were the only one paying.

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Author: Thorben Rasmus Idel · Reviewed by: Nahar Geva · Last reviewed: 2026-09-04