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I'm not sure I quite understand the structure, but it does look relatively high: https://en.wikipedia.org/wiki/Taxation_in_Portugal https://en.wikipedia.org/wik

I'm not sure I quite understand the structure, but it does look relatively high: https://en.wikipedia.org/wiki/Taxation_in_Portugal https://en.wikipedia.org/wiki/Taxation_in_Portugal The calculator here shows it's not anywhere near 88% though in most cases: https://investomatica.com/income-tax-calculator/portugal https://investomatica.com/income-tax-calculator/portugal Income Before Tax 80 000 € Income Tax - 25 472 € Solidarity Rate Tax 0 € Social Security - 8 800 € Total Tax - 34 272 € Take Home Pay 45 728 € Total Deductions - 8 800 € Average Tax Rate 42,8 % Disclaimer: of course this varies significantly based on freelancing, government employee status, etc.

quonn 3y ago
Because the calculator does not really take into account the 35% social security if the money is paid by a foreign entity to the foreigner directly. @binarycrusader: I can‘t reply below. It‘s not 35% but 34,75%. It‘s easy to find that online and this rate is not depending on the person. A foreigner or nomad does by definition not have a Portuguese employer. They have to pay the employer part themselves. It‘s that simple. @binarycrusader: It‘s mentioned on countless sites related to the NHR and Golden Visa and all of these things. I talked this through with two Portuguese accountants. Is that enough?
- deleted 3y ago
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- binarycrusader 3y ago
  Sure, but the social security contributions and tax rates vary wildly based on who your employer is, etc. so it's misleading to claim it's 88% without specifying the specific conditions. Also, according to the WikiPedia page, none of the Social Security Contribution rates are exactly 35%. Would you care to share the exact conditions? I don't read this the same way: can you point to which "Social Security Regime" on the WikiPedia page you believe this falls under?
  - JetSpiegel 3y ago
    If you are a contractor with a Portuguese entity, you can use a special regime called Recibos Verdes, that means the social security payments are smaller and independent of your salary, I think 100€ per month is the minimum. This was a loophole by many companies used to avoid having "real" employees, and there have been crackdowns on this, it's mostly for temporary contractors. If you have 3 years of concurrent "temporary" contracts with the same entity, you must ve registered as an employee.

quonn 3y ago

Because the calculator does not really take into account the 35% social security if the money is paid by a foreign entity to the foreigner directly. @binarycrusader: I can‘t reply below. It‘s not 35% but 34,75%. It‘s easy to find that online and this rate is not depending on the person. A foreigner or nomad does by definition not have a Portuguese employer. They have to pay the employer part themselves. It‘s that simple. @binarycrusader: It‘s mentioned on countless sites related to the NHR and Golden Visa and all of these things. I talked this through with two Portuguese accountants. Is that enough?

deleted 3y ago
[deleted]
binarycrusader 3y ago
Sure, but the social security contributions and tax rates vary wildly based on who your employer is, etc. so it's misleading to claim it's 88% without specifying the specific conditions. Also, according to the WikiPedia page, none of the Social Security Contribution rates are exactly 35%. Would you care to share the exact conditions? I don't read this the same way: can you point to which "Social Security Regime" on the WikiPedia page you believe this falls under?
- JetSpiegel 3y ago
  If you are a contractor with a Portuguese entity, you can use a special regime called Recibos Verdes, that means the social security payments are smaller and independent of your salary, I think 100€ per month is the minimum. This was a loophole by many companies used to avoid having "real" employees, and there have been crackdowns on this, it's mostly for temporary contractors. If you have 3 years of concurrent "temporary" contracts with the same entity, you must ve registered as an employee.