From what value does income tax need to be paid? Find out if you are exempt or have tax to pay.

From what value do I pay IRS?

If you are starting your professional life, working as a freelancer or simply want to understand how IRS works, it is natural to ask: “What is the minimum amount from which you pay IRS?”

In this article we explain simply the tax-exempt income, when it is necessary to submit a declaration, and the updated limits for 2025.

What is IRS and how does it work?

The Personal Income Tax (IRS) is a tax applied to the annual income of those who live in Portugal.

Applies to various types of income:

• Dependent work (salaries);
• Independent work (green receipts).
• Pensions.
• Rental income (rents);
• Capitals;
• Capital gains

But that does not mean that all income is taxed. The law sets income brackets and exemption minimums below which no tax is payable.

What is the minimum value from which income tax is paid in 2025?

In 2025, the minimum value from which you will pay IRS in Portugal is directly related to the minimum existence level - that is, the annual income up to which a taxpayer does not pay IRS because it is considered necessary to guarantee a dignified life.

• Annual income up to €11,480 (€820 x 14 months) is exempt from IRS, according to the minimum existence provided for in the State Budget for 2024, which applies to income declared in 2025.
• This means that if you earn up to around 820€/month (on average), you should not pay income tax, as long as you do not have other sources of income that change that value.

And if you have sporadic income or work as a freelancer?

For independent workers or with occasional income (ex: freelancers, service providers), the same logic applies: if the total annual income is less than €11,480, they are exempt from paying IRS.

However, you may still have the obligation to submit your IRS tax return, even if you do not pay taxes.

Do I have to submit IRS if I am exempt?

In some cases, yes. Even if you are exempt from paying IRS, you may have to submit the declaration if:

• There was more than one source of income;
• Received subsidies or temporary pensions;
• Has income that was not subject to withholding.

But there are exceptions: If you only had income from dependent work from a single entity and did not exceed the exemption amount, you may be exempt from filing.

How to know if I will pay IRS?

You can make a simulation on the Portal das Finanças before submitting your declaration. Based on what has already been withheld (if applicable) and the deductions you are entitled to, the system indicates whether:

• Will pay tax;
• Will receive refund
• There is no balance to pay or receive.

Check exemption in the simulator.

At the Tax Portal you can check if you are exempt from filing the declaration and simulate the tax, even before filling out the IRS.

Thus, avoids errors or unpleasant surprises.

Knowing the income threshold for paying IRS is essential.

If your income is below €11,480 annual, you probably won't have to pay IRS in 2025. However, it is essential to confirm your specific situation, especially if you have children, multiple incomes, or work for yourself.

If you still have doubts, you can simulate on the Finance Portal or talk to a specialist to ensure that you comply with all obligations and make the most of your deductions.

Follow Poupança no Minuto to stay up to date with similar information.