The two tariffs
Portugal (art. 68.º, 2026 income)
| Taxable income | Rate |
|---|---|
| up to 8 342 € | 12,5 % |
| 8 342 – 12 587 € | 15,7 % |
| 12 587 – 17 838 € | 21,2 % |
| 17 838 – 23 089 € | 24,1 % |
| 23 089 – 29 397 € | 31,1 % |
| 29 397 – 43 090 € | 34,9 % |
| 43 090 – 46 566 € | 43,1 % |
| 46 566 – 86 634 € | 44,6 % |
| above 86 634 € | 48 % |
Plus the solidarity surcharge: 2,5 % on taxable income between 80 000 € and 250 000 €, 5 % above. Salaries and pensions first lose the specific deduction of 4 587 € (8,54 × IAS); there is no general personal allowance.
Germany (§ 32a EStG, 2026)
| Taxable income | Rate |
|---|---|
| up to 12 348 € (Grundfreibetrag) | 0 % |
| 12 349 – 17 799 € | rising from 14 % to about 24 % |
| 17 800 – 69 878 € | rising to 42 % |
| 69 879 – 277 825 € | 42 % |
| above 277 825 € | 45 % |
Plus the Solidaritätszuschlag of 5,5 % of the tax above an exemption threshold that spares most taxpayers, and church tax of 8 % or 9 % of the income tax for registered members. Employees deduct a 1 230 € lump sum for work expenses and their social contributions in large part.
- 12 348 € tax-free in Germany; 4 587 € deduction (not an allowance) in Portugal
- 34,9 % Portuguese marginal rate from 29 397 €; Germany reaches 42 % only at 69 879 €
- 48 % vs 45 % top rates, but Portugal has no church tax and its solidarity surcharge starts at 80 000 €
- 28 % vs 25 % flat rates on interest, dividends and gains
Worked examples (employment income, 2026)
| Gross salary | Portugal (single) | Germany (single, no church tax) |
|---|---|---|
| 30 000 € | about 4 800 € IRS after the 4 587 € deduction | about 2 300 € income tax after deductible contributions and allowances |
| 60 000 € | about 15 400 € (contributions of 6 600 € deducted instead) | about 9 500 € |
| 100 000 € | about 31 600 € including the solidarity surcharge | about 23 400 € plus Solidaritätszuschlag |
German figures are indicative: the tariff applied to salary minus deductible social contributions (pension in full, most of health and care) and the 1 230 € employee lump sum, with an average health-fund supplement; Portuguese figures are the tariff applied to salary minus the 4 587 € deduction or, when higher, the 11 % contributions (above 41 700 € of salary), before personal tax credits (general family expenses, health, housing, children) that typically return 300–1 000 €. On take-home pay Germany’s social contributions (about 20 % of gross for the employee) weigh more than Portugal’s 11 %, which narrows the gap at every level.
Couples. Both countries split: Germany applies the tariff to half the joint income and doubles the tax (Ehegattensplitting); Portugal divides the taxable income by two, applies the table, and multiplies by two. A one-earner couple on 60 000 € pays roughly 10 400 € in Portugal and 4 900 € in Germany — the German allowance and the deductible contributions count twice.
Where the systems part company
- Capital income. Germany: 25 % Abgeltungsteuer plus Soli after 1 000 € (2 000 € for couples) of allowance. Portugal: 28 %, no allowance, with the option to aggregate; gains on listed securities held over two, five or eight years lose 10 %, 20 % or 30 % of the taxable amount.
- Rents. Germany adds rents to income after depreciation of 2 % (3 % for new buildings) and interest. Portugal taxes residential rents at a flat 25 %, falling to 15 %, 10 % and 5 % for leases of five, ten and twenty years; mortgage interest is not deductible.
- Pensions. Germany taxes 84 % of a statutory pension starting in 2026 (the rest phased in until 2058); Portugal taxes 100 % after the 4 587 € deduction. Company pensions are fully taxed in both.
- Self-employed. Germany taxes actual profit; Portugal’s simplified regime taxes 75 % of turnover for listed professions (35 % for other services) up to 200 000 € without expense accounting, which favours low-cost service businesses.
- Special regimes. Portugal: IFICI, 20 % for ten years on listed activities and exemption of foreign income (see the German NHR/IFICI page). Germany: none comparable.
Filing
Portugal: online return 1 April – 30 June, tax paid or refunded by 31 August; withholding on salaries through the employer’s monthly tables. Germany: return by 31 July of the following year (later through a Steuerberater), Lohnsteuer withheld monthly by tax class.
Before you fix a date, we run your actual income through both tariffs — salary, pension, rents, dividends — and show the annual difference with and without IFICI. Ask for the comparison.
Questions
Is Portugal cheaper than Germany for a salaried employee?
On income tax alone Germany is cheaper at most salary levels because of the 12 348 € allowance, the deductible contributions and the smoother tariff; on total deductions the gap narrows because employee social contributions are 11 % in Portugal against roughly 20 % in Germany. With IFICI on a qualifying job (20 % flat), Portugal is cheaper on income tax from roughly 70 000 € upwards, and earlier once the lower social contributions are counted.
Does Portugal have church tax?
No. Leaving Germany ends church tax with the Abmeldung; nothing replaces it here.
Can I still use Ehegattensplitting if my spouse stays in Germany?
Only while you remain unlimited taxable in Germany. Once you are Portuguese resident and your spouse German resident, each files in their own country; Portugal allows joint filing only when both spouses are resident.
Sources and official references
- EStG § 32a — tariff 2026: 12 348 € tax-free, 14 % entry rate, 42 % from 69 879 €, 45 % from 277 826 €; splitting for couples (§ 32a (5)) — checked 18.9.2026
- EStG § 32d — 25 % flat rate on capital income; § 20 (9) — 1 000 € saver's allowance — checked 18.9.2026
- Código do IRS, artigo 68.º — brackets 2026; artigo 68.º-A — solidarity surcharge — checked 18.9.2026
- Código do IRS, artigo 25.º — specific deduction 8,54 × IAS on employment income; artigo 72.º — 28 % flat rates — checked 18.9.2026
- Portaria n.º 480-A/2025/1 — IAS 2026 = 537,13 € — checked 18.9.2026