How is net salary calculated in Portugal?

What is net salary?

The gross salary is the figure stated in your contract. The net salary is what actually reaches your account each month, after two mandatory deductions for employees: Social Security and IRS (income tax).

The idea is simple:

Net salary = gross salary − Social Security − IRS

What changes from person to person is the size of each deduction. Social Security is a fixed percentage; IRS depends on how much you earn. Let’s take them in turn.

How much is deducted for Social Security?

The employee Social Security contribution is a flat 11% of the gross salary¹. It is deducted every month and applies to all remuneration, including the holiday and Christmas subsídios.

The employer contributes a further 23.75% separately, but that amount does not come out of your salary; it is a cost to the company. For your net pay, what counts is the 11%.

On a gross salary of €1,500, Social Security takes €165 a month (11% of €1,500).

How does IRS come in?

IRS is subtler, for two reasons.

First: IRS is not charged on the gross salary, but on the taxable income, the income after the employment specific deduction. In 2026 that deduction is 8.54 × IAS = €4,587.09 (or your total Social Security contributions, if higher)². The 2026 IAS is set at €537.13⁴.

Second: IRS is an annual, progressive tax. The 2026 brackets (Art. 68.º) apply to the taxable income: each slice of income is taxed at its own rate, and only the part that reaches a higher bracket pays the higher rate³. The most reliable way to estimate the IRS on a salary is therefore to do the sum by the year and divide at the end, exactly the reconciliation your IRS return performs. The withholding tables you see on your payslip are merely a monthly advance of that figure, corrected later on the return.

Worked example: a €1,500 salary

Take a gross salary of €1,500 a month, paid 14 times (with the subsídios). That is €21,000 a year.

1. Social Security: 11% of €21,000 = €2,310 a year (€165/mo).
2. Taxable income: €21,000 − €4,587.09 (specific deduction) = €16,412.91.
3. IRS: applying the 2026 brackets to €16,412.91, the tax is about €2,520 for the year (€180/mo).
4. Net: 21,000 − 2,310 − 2,520 = €16,170 a year, i.e. about €1,155 a month.

The total burden (Social Security + IRS) is close to 23% of gross. Run the figures for your own salary on the net salary calculator.

What about minimum-wage earners?

Here there is an important protection: the minimum-existence floor (mínimo de existência). The law ensures the lowest incomes pay no IRS (or very little), so that no one is left with a net below a minimum. In practice, earners near the minimum wage pay little or no IRS.

Social Security (11%), however, always applies, even at the minimum wage. So for low salaries the net is almost the gross minus the 11%.

Note: the net salary calculator does not model the minimum-existence floor, so for salaries near the minimum it shows more IRS than is really due, your true net will be higher.

Gross, net and what is not included

To estimate the net precisely, some factors move the IRS and depend on your situation: dependants, joint taxation (couples), deductions to tax (health, education, invoices) and schemes such as IRS Jovem. All tend to reduce IRS, so your real net may be a little higher than a simple individual estimate.

To understand the tax in detail (brackets, average and marginal rate, joint taxation), see how IRS is calculated and use the IRS calculator.