If you spend less than 183 days per year in Portugal you will only have to pay taxes if:
- You own a house in Portugal at the 31st December (The Portuguese tax year ends on the 31st of December).
- If you are working for the Portuguese state but are living abroad
Income tax in Portugal
A foreign resident working in Portugal will only pay income tax on the amount of money earned in Portugal. Money earned in a different country can not be taxed. Tax rates fall anywhere between 10%- 42%. Employers are responsible for deducting tax and national insurance from the employees wage packet each month.
Social Security in Portugal
It is essential that you register with social security as you are obliged to pay into the social security system. As an employee 10% of your wage will contribute to Social Security. Your employer will pay an additional charge of around 25%.
Once employed, it is your responsibility to inform Social Security of your new employment status. This has to be done within 24 hours of your contract starting. To do this, go to your local Social Security office (Loja de Cidadão) with a completed form RV1009–DGSS.
- Social Security gives you protection under the following circumstances:
- Maternity, paternity and adoption
- Occupational diseases
- Old age
- Family benefits
Healthcare coverage in Portugal
When you start working in Portugal and you have registered with social security you will immediately receive public healthcare. You will be given a healthcare card by the Ministry of Health.
Unemployment benefits in Portugal
Portuguese citizens and legal residents in Portugal can receive unemployment benefit. Foreigners who have worked in Portugal can receive the same rate of unemployment benefit as a Portuguese citizen after four weeks of claiming. If you are made redundant you are entitled to receive 65% of your wages made in your last employment.
A person who has contributed to social security in another EU country for a minimum of two years and has not worked in Portugal may be eligible to receive unemployment benefits for a limited period. To receive unemployment benefit in this case, you must have the necessary paperwork from your social security authorities in your home country. For more information refer to the Portuguese social security website. (www1.seg-social.pt)
To receive unemployment benefit you must:
- be able and available for work.
- be involuntarily unemployed.
- be able to prove that there is a lack of job opportunities in and out of your chosen field.
- be registered at a job centre.
- be able to attend interviews and ready to accept the first offer of work given.
- Pension schemes in Portugal
Portugal offers an old age pension scheme to those who:
- are 65 and over
- have worked in Portugal or have contributed to Social Security in Portugal for a minimum of 15 years via registered employment.
However, it is possible to receive anticipated old age pension if:
- you are 55
- you have contributed to Portuguese Social Security for 30 years via registered employment.
For more information on pensions and eligibility read the Social Security web page on this topic.