How IRS deductions work in Portugal (deduções à coleta)

What deductions from the coleta are

IRS is computed in two stages. First the coleta is worked out: the tax produced by the brackets applied to your taxable income³. Then the deductions from the coleta you are entitled to, because of your expenses, are subtracted¹. This page explains that second stage, which the IRS deduction calculator handles.

Every euro of deduction from the coleta directly reduces the tax you owe (or increases your refund).

It is different from the specific deductions, which reduce income before the brackets are applied. Deductions from the coleta act at the end, on the tax itself.

Each expense deducts a percentage, up to a cap

Expenses are not deducted in full. A percentage is deducted, up to a cap per category². These are the main ones:

General family expenses are the invoices you request with your NIF in any sector. Health includes health goods and services (at reduced VAT) and health insurance. Education covers tuition, textbooks, tutoring and nurseries. Domestic work is the pay under a domestic-service contract, as declared to social security⁴. The 2026 values are unchanged from 2025.

The global ceiling, depending on income

On top of each category cap there is a global ceiling (article 78(7) of the IRS Code)¹ on the sum of health, education, homes, alimony and domestic work. That ceiling depends on taxable income:

• Income within the first bracket (up to €8,342 in 2026): no ceiling, the sum deducts in full.
• Income above €80,000: ceiling of €1,000.
• Between the two: the ceiling falls linearly, from €2,500 (just above the first bracket) to €1,000.

General family expenses (invoices) stay outside this ceiling and always add on top of the others. That is why it pays to always request an invoice with your NIF: that deduction is independent of the global ceiling.

Families with 3 or more dependents

For families with 3 or more dependents, the global ceiling is raised by 5% per dependent (article 78(8))¹. For example, in a high-income household with a €1,000 ceiling, three dependents raise it to €1,150. Enter the number of dependents in the calculator to apply that uplift.

The number of taxpayers also counts: the cap on general expenses is €250 per taxpayer, that is €500 for a couple with joint taxation.

The domestic-work deduction

If you employ a domestic worker, you deduct 5% of the pay, up to €200 per household (article 78-H of the IRS Code)⁴. It is a recent deduction: it was created by the 2024 State Budget and applied for the first time to the 2024 tax year, filed in 2025⁵.

Two conditions matter:

• The worker must fall under the domestic-service contract regime (Decreto-Lei 235/92).
• The pay must be declared to social security. The social-security institute reports those amounts to the tax authority by 15 February of the following year, and the tax authority shows them in the expenses lookup on the Portal das Finanças⁵. If you want to declare a different figure, you enter it in box 6C1 of Annex H of the modelo 3 return.

One detail is easy to miss: this deduction was included in the same pooled sum subject to the global ceiling of article 78(7)⁵. In a household that already uses the ceiling up on health and education, the €200 of domestic work may not translate into any tax saved.

What is not in this sum

To keep the numbers reliable, the calculator covers the stable, most common deductions. The following are explained but not computed:

• Rent and mortgage interest on pre-2012 contracts (article 78-E). The deduction exists, but the 2026 rent cap is not yet settled, so we prefer not to show a number that could be wrong.
• The sector VAT-invoice deduction (the VAT borne in restaurants, garages, hairdressers, vets and others). The tax authority computes it automatically by sector, with a cap of €250 per household.
• Tax benefits, such as the PPR. For the PPR, see the PPR calculator.
• The deductions for dependents and ascendants and for disability, which follow their own rules.

A worked example from start to finish

Imagine a taxable income of €20,000, a single taxpayer with no dependents, with:

• €2,000 of general invoices: 35% gives €700, but the cap is €250, so it deducts €250.
• €3,000 of health: 15% gives €450 (below the €1,000 cap).
• €2,000 of education: 30% gives €600 (below the €800 cap).

The sum subject to the global ceiling is €450 + €600 = €1,050. The ceiling at this income is about €2,256, so the €1,050 passes in full. The total deduction from the coleta is €250 + €1,050 = €1,300, subtracted from the IRS due.

Work it out for your case in the IRS deduction calculator and see how much is left to pay with the IRS calculator and the IRS refund calculator.