Your Profile & Tax Status
Sets tax coefficient & NHR eligibility. Enter CAE below.
✓ Activity type locked to:
5-digit activity code (CAE Rev. 4, effective Jan 2025). Clear to unlock manual selection.
📚 Find Your Code: Portal das Finanças (Interactive Search) | SICAE (Verify Companies) | Need help? Email: info@ine.pt or call +351 21 844 06 95
What are high-value professions?
Professional services (CIRS codes) listed in Article 151 of CIRS: software, consulting, design, engineering, etc.
Article 151 CIRS Codes:
CIRS vs CAE: Freelancers providing services only use CIRS codes. Business activities use CAE codes.
Official Source: Portaria 1011/2001, Article 151 (DRE)
Scope: This calculator compares Category B professional services taxation only.
First-year benefits & age-based exemptions
First 12 months (rolling). New self-employed only.
First calendar year. Halves coefficient (75%→37.5%, 35%→17.5%).
Under 35, higher ed. 10-year exemption, cap €28,737. Excludes NHR.
Eligibility: Under 35 years old, completed higher education (bachelor's or higher), Portuguese tax resident.
⚠️ EXCLUSION: Cannot have enrolled in or benefited from NHR/IFICI (even if never used).
Income Cap: €28,737.50 (55 × IAS). Exemption applies to taxable income up to this cap only.
Year counting: Year 1 = first tax year after completing your degree (not first job year).
Example: Graduated in 2023, started working 2024 → 2024 is Year 1. Benefit lasts until 2033 (Year 10).
Your Income
Professional services revenue (year 1).
Annual growth over 10 years. Conservative: 0-3%, Moderate: 5%, Optimistic: 7-10%.
Your Business Expenses
Office, equipment, software, travel. Auto: 5% gross.
Override with actual quote
Enter your actual insurance quote to use instead of the auto-calculated estimate.
⚙️ Customize estimate (advanced)
3+ years with clean record = -10% discount
Freelancers need insurance (unlimited liability). LDAs have built-in protection. ⚠️ ROUGH ESTIMATE: ±20-40%+ variance. Get real quotes from brokers.
TOC/accountant fees. Insurance auto-added from above estimate.
Accounting, compliance, legal. Limited liability built-in (no insurance).
Personal Tax Deductions
These deductions reduce your final IRS bill. They apply to both setups.
15% deductible, max €0.00.
📊 Results update automatically as you change inputs. Use tabs above to adjust Setup, Income, Expenses, or Deductions.
Your Results
👋 Enter your income and expenses to see which structure maximizes your take-home.
Simplified limit: Max €200,000/year turnover
Why This Structure Wins
Freelancer (Simplified) Results
- 📊 Income
- Gross income
- €0.00
- Coefficient (deemed expenses)
- 75%
- = Taxable income
- €0.00
- 💰 Business Expenses
- Base expenses
- €0.00
- Admin costs
- €0.00
- Liability insurance (guesstimate)
- €0.00
- = Total expenses
- €0.00
- 💰 Gross profit
- €0.00
- 🏛️ Taxes & Contributions
- Tax deductions
- €0.00
- IRS (income tax)
- €0.00
- Social Security
- €0.00
- = Total taxes
- €0.00
- 💵 Net Income
- NET CATEGORY B INCOME
- €0.00
Single-Member Company (LDA) Results
- 📊 Income
- Gross income
- €0.00
- 💰 Business Expenses
- Base expenses
- €0.00
- Admin costs
- €0.00
- = Total expenses
- €0.00
- 💰 Gross profit
- €0.00
- = Net business income
- €0.00
- = Taxable income
- €0.00
- 🏛️ Taxes & Contributions
- Tax deductions
- €0.00
- IRS (income tax)
- €0.00
- Social Security
- €0.00
- = Total taxes
- €0.00
- 💵 Net Income
- NET CATEGORY B INCOME
- €0.00
10-Year Summary
Detailed breakdown (10-year cumulative totals)
| Freelancer | Single-Member Company | Difference | |
|---|---|---|---|
| Taxable income (10-year total) | €0.00 | €0.00 | €0.00 |
| Income tax (IRS) (10-year total) | €0.00 | €0.00 | €0.00 |
| Social Security (10-year total) | €0.00 | €0.00 | €0.00 |
| Net income (10-year total) | €0.00 | €0.00 | €0.00 |
View calculation steps
Freelancer Calculation
IRS Bracket Breakdown
Single-Member Company (LDA) Calculation
IRS Bracket Breakdown
Input validation
Your Current Setup
Methodology & Tax Tables
This tool uses official 2025 Portuguese tax law and regulations. All calculations are transparent and verifiable.
2025 IRS Progressive Tax Brackets
Applied to taxable income (after activity coefficient and deductions)
| Income Bracket | Tax Rate |
|---|---|
| Up to €8,059 | 13.0% |
| €8,060 - €12,160 | 16.5% |
| €12,161 - €17,233 | 22.0% |
| €17,234 - €22,306 | 25.0% |
| €22,307 - €28,400 | 32.0% |
| €28,401 - €41,629 | 35.5% |
| €41,630 - €44,987 | 43.5% |
| €44,988 - €83,696 | 45.0% |
| Above €83,696 | 48.0% |
Source: Lei n.º 55-A/2025, Article 68.º CIRS - IRS progressive brackets for 2025
Calculator Scope: Category B Professional Services Only
✓ Why Investment Income Is Excluded from This Comparison
This calculator compares ONLY Category B professional services taxation. Investment income (dividends, capital gains, interest) is excluded because it's taxed identically regardless of structure choice:
- Category E (dividends, interest): 28% flat rate — same whether you're a freelancer or have an LLC
- Category G (capital gains): 28% flat rate — same in both structures
- Received at personal level: Investment accounts (IBKR, crypto, ETFs) held personally in both cases
- Not passed through LLC: Transparent LLCs only pass through Category B professional services income
The Math:
Freelancer net = (Cat B services - taxes) + (Investments - 28%)
LLC net = (Cat B services - taxes) + (Investments - 28%)
^^^^^^^^^^^^^^^^^^
IDENTICAL → CANCELS OUT
Legal Reality: Sociedades de profissionais (professional partnerships) are formed to perform "intellectual, scientific, artistic, or technical services." Holding investment portfolios isn't part of their statutory purpose. If an LLC received investment income, it would flow through as Category B (taxed up to 48%) instead of the beneficial 28% flat rate for personal investment income.
Practical Structure:
- LLC: Invoices clients, receives service payments (Category B flow-through)
- Personal: Holds investment accounts, receives dividends/gains (Category E/G at 28%)
Conclusion: This calculator focuses on the differential impact where structure choice actually matters (Category B taxation). Including investment income would add complexity without changing the comparison outcome.
Sources: Rauva - Transparência Fiscal | Sociedades de Profissionais | CIRS (Portuguese Income Tax Code)
Simplified Regime Income Limit
€200,000 Annual Turnover Maximum (Category B Only)
Simplified regime is only available for Category B professional income up to €200,000 annually.
- If Category B gross income exceeds €200,000, you must switch to organized accounting
- This is a legal requirement, not optional
- Applies to Category B cumulative annual invoicing (not net income)
- The limit applies to Category B only—other income types (dividends, capital gains) are not included
- Exceeding the limit requires immediate switch to organized regime
Tip: Near €200k? Switch to organized/LDA before exceeding limit.
Source: CIRS Article 28 (Regime simplificado) | Portal das Finanças
Activity Coefficients
Percentage of gross income that remains taxable under simplified regime
Article 151 services (IT, consulting, design, etc.)
Deemed expenses: 25%
Other Category B professional services
Deemed expenses: 65%
Sources: CIRS Article 31 (Coeficientes) & Portaria n.º 1011/2001 (Article 151 list)
CAE Codes (Economic Activity Classification)
CAE codes determine your activity type, tax coefficient, and NHR eligibility.
- CAE Rev. 4: Official classification (effective Jan 1, 2025, replaces Rev. 3)
- 5-digit codes: Identify specific professional activities
- Article 151 (CIRS codes): Service providers → 75% coefficient
- Other CAE codes: Business activities → 35% coefficient
📋 Official CAE/CIRS Resources:
- Portal das Finanças - Activity Registration (Interactive CAE/CIRS search tool)
- SICAE - CAE Company Lookup (Verify registered codes for companies)
- DRE: Decreto-Lei 9/2025 (Official CAE Rev. 4 publication)
- INE: CAE Rev. 4 Complete Classification (Full code list & equivalence tables)
- DRE: Portaria 1011/2001 (Article 151 CIRS professional service codes)
- Need help choosing? Email: info@ine.pt | Phone: +351 21 844 06 95 (INE support)
Social Security (Segurança Social)
Freelancers (Self-Employed)
- Contribution Rate: 21.4% (unchanged from 2024)
- Relevant Income: 70% of gross income (simplified) or net business income (organized)
- Monthly Base Cap: €6,270 (12× IAS of €522.50)
- Maximum Monthly Contribution: €1,342 (21.4% of €6,270)
- First-Year Exemption: 12 rolling months available for new self-employed
Single-Member Company (LDA) - Manager Contributions
- Employee Contribution: 11% of declared salary
- Employer Contribution: 23.75% of declared salary
- Total Combined Rate: 34.75% (11% + 23.75%)
- Minimum Base: Typically 1× IAS (€522.50/month = €6,270/year)
- Example: €522.50 base × 34.75% = €181.57/month = €2,179/year minimum
Important: LDA managers pay significantly higher SS rate (34.75%) vs freelancers (21.4%), but on a lower base (minimum wage) vs freelancers (70% of actual income)
Source: Lei 110/2009, Art. 168º (21.4%) & Art. 53º (34.75%) | IAS 2025: €522.50 (Portaria 6-B/2025) | RMMG 2025: €870 (DL 112/2024)
Solidarity Tax (Taxa Extraordinária)
Additional tax on high incomes, applied to taxable income
| Taxable Income Range | Rate |
|---|---|
| €80,000 - €250,000 | 2.5% |
| Above €250,000 | 5.0% |
Example: Taxable income of €120,000
- €80,000 - €120,000 = €40,000 × 2.5% = €1,000 solidarity tax
Source: Lei n.º 82-B/2014, Article 191 (Solidarity Tax) - maintained in subsequent State Budgets through 2025
IRS Jovem (Youth Tax Benefit)
Progressive income tax exemption for young professionals — NEW 2025 10-year schedule
| Period | Exemption | Taxable | Notes |
|---|---|---|---|
| Year 1 | 100% | 0% | First tax year after completing degree |
| Years 2-4 | 75% | 25% | Second to fourth tax year |
| Years 5-7 | 50% | 50% | Fifth to seventh tax year |
| Years 8-10 | 25% | 75% | Eighth to tenth tax year |
| Year 11+ | 0% | 100% | Benefit expired - normal taxation |
🚨 Critical Exclusion Rule
IRS Jovem and NHR/IFICI are mutually exclusive. You CANNOT use both benefits.
- If you have ever enrolled in NHR/IFICI (even if never used), you are permanently disqualified from IRS Jovem
- If you claim IRS Jovem, you cannot benefit from NHR 20% flat rate
- You must choose one path at the start - you cannot switch between them
Which to choose? For young professionals, IRS Jovem is often more valuable in early years (100%/75% exemptions) than NHR's 20% flat rate, especially Years 1-3.
Eligibility: Age <35, bachelor's+ OR vocational 4/5, PT resident, never used NHR.
Cap: €28,737.50 (55×IAS). Exemption to cap; excess taxed at standard rates.
Example: €40k gross, 75% coef = €30k taxable. Y1: €28,737 exempt, €1,263 taxed.
Duration: Extended to 10 years from 2025 (was 5 years pre-2025)
Source: Lei n.º 24-D/2024 (State Budget 2025), Article 200 | CIRS Article 2-B (IRS Jovem) | Segurança Social - IRS Jovem Guide
NHR / IFICI (20% Flat Rate)
Special tax regime for qualifying residents and activities
⚠️ IMPORTANT: Calculator Scope Limitation
This calculator ONLY shows Portuguese professional income (Category B) taxation.
It does NOT calculate foreign income exemptions available under NHR 1.0. If you have foreign income, your actual total tax may be significantly lower than shown here.
Original NHR (Pre-2024) - Extensive Foreign Income Exemptions
- Granted: Before 2024 (closed to new applicants)
- Duration: 10-year benefit
- Portuguese income: 20% flat rate on professional income (Category B)
- Foreign income exemptions (if DTA exists):
- ✅ Foreign rental income - EXEMPT
- ✅ Foreign bank interest - EXEMPT
- ✅ Foreign dividends - EXEMPT
- ✅ Foreign royalties - EXEMPT
- ✅ Foreign real estate capital gains - EXEMPT
- ❌ Foreign securities capital gains - 28% tax (not exempt)
- ⚠️ Foreign pensions - 10% flat tax (changed in 2020)
NHR 2.0 / IFICI (2024+)
- Granted: From 2024 onwards, requires IFICI status
- Duration: 10-year benefit
- Flat Rate: 20% on Portuguese professional income (Category B)
- Eligible Activities: Scientific research, innovation, high-value professions (Article 151)
- Foreign income: Different treatment than NHR 1.0 - consult tax advisor
🚨 Critical Exclusion Rule
NHR/IFICI and IRS Jovem are mutually exclusive. You CANNOT use both benefits.
- Enrolling in NHR/IFICI permanently disqualifies you from IRS Jovem (even if you never use NHR)
- Claiming IRS Jovem makes you ineligible for NHR benefits
- This is stated in official IRS Jovem legislation: "não é aplicável aos sujeitos passivos que beneficiem ou tenham beneficiado do regime dos Residentes Não Habituais"
📊 NHR 1.0 Foreign Income: Real-World Example
UK expat with NHR 1.0 status and €85,000 total income:
- Portuguese professional income: €50,000 → 20% NHR rate = €10,000 tax
- UK rental income: €25,000 → EXEMPT = €0 tax
- UK dividends: €8,000 → EXEMPT = €0 tax
- UK bank interest: €2,000 → EXEMPT = €0 tax
- Total Portuguese tax: €10,000 on €85,000 income = 11.8% effective rate
Note: This calculator only shows the €10,000 Portuguese professional income tax. Foreign income exemptions NOT included in calculations.
Foreign income: Requires DTA with source country; income must be treaty-taxable there.
Key DTA countries: US, UK, Germany, France, Switzerland, Canada, Australia, Singapore, UAE, Netherlands, 70+ countries total
Note: Solidarity tax still applies if taxable income exceeds €80,000
Source: CIRS Article 72 (NHR regime) | Decree-Law 249/2023 (IFICI) | Portal das Finanças - NHR Information
Professional Liability Insurance (Freelancers) — GUESSETIMATION ONLY
Freelancers operating without limited liability protection typically need professional liability insurance
⚠️ IMPORTANT: This is a ROUGH GUESSTIMATE, NOT a precise calculation
Actual premiums can vary by ±20-40% or MORE depending on:
- Specific insurer pricing policies and risk models
- Detailed profession specifics and services offered
- Individual claims history and experience
- Market conditions and competition in Portugal
- Coverage details, deductibles, and policy terms
⚠️ Do NOT rely on this estimate for budgeting. Always get personalized quotes from multiple insurance brokers/providers before making financial decisions.
Guessetimation Formula (For Reference Only)
This calculator uses a simplified industry-average formula to provide a ballpark estimate:
Formula: Premium ≈ (BaseRate + Revenue × VariableRate) × RiskMultiplier × AdjustmentFactors
Note: This is based on general industry averages and Portugal market data, but actual quotes will vary significantly by insurer
Risk Tiers (Auto-Derived from Activity)
Base: €350 + 0.35% revenue × 0.8 multiplier
Example: €100k → ~€640/year (0.64%)
Base: €450 + 0.45% revenue × 1.0 multiplier
Example: €100k → ~€900/year (0.90%)
Base: €800 + 0.80% revenue × 1.8 multiplier
Example: €100k → ~€2,240/year (2.24%)
Adjustment Factors (Optional)
- USA/Canada Coverage: +35% (higher litigation risk)
- Claims History: Minor +15%, Major +40%
- Experience Discount: -10% for 3+ years with clean record
- Coverage Limit: ±40% × (requested/€2M - 1)
Activity Code → Risk Tier Mapping
Auto-derived from activity type:
- High-value services (CAE 62xxx IT, 70220 consulting, 74100 design) → Medium Risk
- General services (catch-all) → Low Risk (conservative default)
- Finance/Healthcare (CAE 69200 accounting, 69102 legal, 86xxx health) → High Risk (explicit override)
You can manually override the auto-derived risk level in the advanced settings if needed.
Guessetimation Methodology
Scaling Property: Premium percentage generally decreases with revenue due to fixed base costs becoming proportionally smaller. This matches typical insurance pricing patterns.
Industry Averages: Formula based on general patterns observed across multiple EU/UK insurance providers and industry research, but this is NOT a validated predictive model.
Example Reference Point: €250k revenue, IT consulting typically costs €600-€1,200/year (0.24-0.48%) based on market research, but individual quotes vary widely. Our guesstimate may be off by 20-40% or more.
⚠️ ALWAYS get actual quotes from insurance providers. Do NOT use this estimate for financial planning.
LDA vs Freelancer Liability
LDA (Limited Liability Company): Built-in limited liability protection. Company assets are separate from personal assets. Professional liability insurance optional (may still be required by specific clients).
Freelancer: Unlimited personal liability. Your personal assets (home, savings, etc.) are at risk in case of claims. Professional liability insurance strongly recommended.
Cost Comparison: Insurance at 0.5-1.5% of revenue is far more cost-effective than LDA overhead (€3,650-8,000/year fixed costs) for most freelancers.
⚠️ ROUGH ESTIMATES: ±20-40%+ variance. Actual costs vary by profession, coverage, claims, insurer. Get real quotes. For budgeting only.
Official Portuguese Insurance Regulation: ASF - Autoridade de Supervisão de Seguros e Fundos de Pensões (Insurance Regulator) | Decree-Law 72/2008 (Insurance Contract Law)
Portugal Insurance Providers: Hiscox Portugal, AXA, Zurich
Industry Research Sources: Validation data sourced from Rauva Insurance Guide, Insureon market research, and comparative data from 20+ EU/UK insurance providers (2023-2024)
Personal Tax Deductions
- Personal Allowance: €4,462.15 (automatic, 8.54× IAS)
- Health Expenses: 15% deductible, max €1,000
- Education Expenses: 30% deductible, max €800
- Dependent Allowance: €600 per dependent
Source: CIRS Article 78 (Personal deductions) & Article 79 (Deduction limits)
Typical Compliance Costs (Annual)
Estimated accounting and administrative expenses
| Structure | Typical Range |
|---|---|
| Freelancer (Simplified) | €360 - €1,200 |
| Freelancer (Organized) | €2,400 - €3,600 |
| Single-Member Company (LDA) | €3,650 - €8,000 |
LDA Additional Costs: Minimum manager salary (~€6,270/year) + social security (~€2,179/year) typically required
Note: Actual costs vary by accountant (TOC) and complexity
How We Calculate
1. Determine Taxable Income
- Simplified: Gross Income × Coefficient (75% or 35%)
- Organized: Gross Income - Real Expenses
- LDA: Gross Income - Real Expenses
2. Calculate Income Tax (IRS)
- Progressive: Apply 2025 tax brackets cumulatively
- NHR/IFICI: Apply 20% flat rate
- Add Solidarity Tax: If taxable income > €80,000
- Subtract Deductions: Personal allowance + expenses
- Apply Benefits: 50% first-year reduction, IRS Jovem exemption
3. Calculate Social Security
For Freelancers:
- Relevant Income: 70% of gross (simplified) or net business income (organized)
- Quarterly Relevant Income: ÷ 4
- Monthly Base: Quarterly ÷ 3, capped at €6,270
- Monthly Contribution: Base × 21.4%
- Annual: Monthly × 12 (or €0 if first-year exemption)
For LDA Managers:
- Base Salary: Minimum 1× IAS (€522.50/month)
- Employee Share: Base × 11%
- Employer Share: Base × 23.75%
- Total Contribution: Base × 34.75%
- Annual: Monthly × 12 = €2,179/year minimum
4. Calculate Net Income
- Formula: Gross Income - Expenses - IRS - Social Security
- Take-Home %: (Net Income ÷ Gross Income) × 100
⚖️ Important Disclaimers
- This tool provides estimates based on 2025 Portuguese tax law and typical scenarios.
- Results are for informational purposes only and do not constitute financial, legal, or tax advice.
- Individual circumstances vary: Your actual tax situation may differ based on residency status, bilateral treaties, specific deductions, etc.
- Professional consultation recommended: Always consult a certified Portuguese accountant (TOC) or tax advisor before making structural decisions.
- Regulations change: Tax laws are updated annually. Verify current rates with official sources.
- Not a tax filing tool: This planner helps you choose a structure, not file taxes or handle compliance.
📚 Official Sources
- Tax Authority (AT): portaldasfinancas.gov.pt
- Social Security: seg-social.pt
- IRS Code (CIRS): CIRS Full Text
- 2025 State Budget: Lei n.º 24-D/2024 - Orçamento do Estado 2025 (Official Gazette)