Italy vs Portugal — Tax Comparison 2026
Italian taxes vs Portuguese taxes, at a glance. Italy: 23%–43% across 3 brackets. Portugal: 12.5%–48% across 9 brackets. Compare take-home pay side by side for employees and contractors.
Are taxes higher in Italy or Portugal?
It's close — for employees at $100,000, Italy and Portugal are within $1,739 of each other per year. At $100,000, an employee in Italy takes home $60,466 versus $58,727 in Portugal — a difference of $1,739 per year. For contractors, Italy comes out ahead: $71,015 versus $60,991.
Estimates based on 2026 rates and approximate exchange rates. Actual take-home varies by individual circumstances.
USD amounts use approximate exchange rates (EUR: 1.1160, EUR: 1.1160). Local currency figures are exact.
| Metric | Italy | Portugal |
|---|---|---|
| Gross (EUR/EUR) | 89.607 € | 89 607 € |
| Gross (USD) | $100,000 | $100,000 |
| Income Tax | 27.190 € | 27 127 € |
| Social Security | 8235 € | 9857 € |
| Net (EUR/EUR) | 54.182 € | 52 623 € |
| Net (USD) | $60,466+$1,739 | $58,727 |
| Effective Rate | 39.5% | 41.3% |
Gross (EUR/EUR)
Italy
89.607 €
Portugal
89 607 €
Gross (USD)
Italy
$100,000
Portugal
$100,000
Income Tax
Italy
27.190 €
Portugal
27 127 €
Social Security
Italy
8235 €
Portugal
9857 €
Net (EUR/EUR)
Italy
54.182 €
Portugal
52 623 €
Net (USD)
Italy
$60,466
+$1,739Portugal
$58,727
Effective Rate
Italy
39.5%
Portugal
41.3%
Where identifiable, mandatory health contributions are shown separately. For other countries, health coverage is included in the Social Security amount.
Bottom Line
At $100,000/year income
Italy gives you $1,739 more per year ($145/mo) as an employee
Italy gives you $10,024 more per year ($835/mo) as a contractor
Take-Home Pay at $60K, $100K and $150K
Net income after income tax and social contributions, converted to USD at approximate exchange rates. Effective rate in parentheses.
Employees
| Gross (USD) | Italy net | Portugal net | Who keeps more |
|---|---|---|---|
| $60,000 | $39,744 (33.8%) | $39,004 (35.0%) | Italy (+$740) |
| $100,000 | $60,466 (39.5%) | $58,727 (41.3%) | Italy (+$1,739) |
| $150,000 | $87,056 (42.0%) | $82,128 (45.3%) | Italy (+$4,928) |
Contractors / Self-Employed
| Gross (USD) | Italy net | Portugal net | Who keeps more |
|---|---|---|---|
| $60,000 | $42,609 (29.0%) | $40,005 (33.3%) | Italy (+$2,604) |
| $100,000 | $71,015 (29.0%) | $60,991 (39.0%) | Italy (+$10,024) |
| $150,000 | $106,523 (29.0%) | $90,236 (39.8%) | Italy (+$16,287) |
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How Taxes Work
Italy Tax System
Employee
- ·IRPEF 2026 (3 brackets: 23%/33%/43%).
- ·Employee INPS contributions are deducted before tax.
- ·The employment credit (detrazione lavoro dipendente, €1,955 up to €15,000, phasing out by €50,000, +€65 for €25,000–35,000) and the additional €1,000 credit for €20,000–32,000 (phasing out by €40,000) are applied.
- ·The tax-free bonus for incomes up to €20,000 is not.
- ·Regional and municipal surcharges (~1.5-3% combined, varies by location) are also not included.
- ·INPS employee contribution: 9.19%, capped at €122,295.
Contractor
- ·Modeled as regime forfettario (flat-tax regime for freelancers with revenue under €85,000).
- ·15% substitute tax on presumed income (5% rate for first 5 years of activity not modeled).
- ·Profitability coefficient: 78% (typical for IT/consulting — ATECO codes 62-74).
- ·INPS gestione separata: 26.07% on presumed income.
- ·If you exceed €85,000 revenue or use regime ordinario, standard IRPEF brackets apply with higher INPS contributions.
- ·INPS contributions are deducted from the forfettario income before the 15% substitute tax.
Portugal Tax System
Employee
- ·IRS 2026: 9 brackets (12.5%-48%).
- ·Dedução específica €4,587.09, or the 11% SS contributions if higher (from about €41,700 of salary).
- ·Employee SS 11% (no cap).
Contractor
- ·Simplified regime (regime simplificado).
- ·IRS on 75% of income (coeficiente 0.75, Art. 31 CIRS).
- ·SS: 21.4% on 70% of income, capped at 12×IAS/month.
- ·No dedução específica for Category B.
Full Italy Tax Calculator →
Detailed breakdown with custom income
Full Portugal Tax Calculator →
Detailed breakdown with custom income
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Frequently Asked Questions
Which has better special tax regimes — Italy or Portugal?
- ·Italy's regime forfettario offers 15% flat tax on 78% of service income (about 8.7% of revenue once INPS is deducted) for freelancers under EUR 85,000.
- ·Portugal's IFICI program (successor to NHR) offers 20% flat tax on certain professions for 10 years.
- ·For contractors, Italy's forfettario is cheaper; for employees, Portugal's IFICI can be better.
How do contractor costs compare between Italy and Portugal?
- ·Under forfettario, Italian contractors pay 15% income tax on 78% of revenue after deducting INPS (about 8.7% of revenue), plus 26.07% INPS on 78% of revenue.
- ·Portuguese contractors pay progressive rates on 75% of income plus 21.4% Seguranca Social on 70% of income.
- ·Italy is generally cheaper for contractors under EUR 85,000.
Which is better for digital nomad visas — Italy or Portugal?
- ·Portugal's D8 visa is more established, requires EUR 3,680/month, and has a well-known process.
- ·Italy's DN visa is newer, requires EUR 28,000/year (~EUR 2,333/month), with a lower income bar.
- ·Both now require 10 years of residence for citizenship for most nationalities (Portugal raised it from 5 years in May 2026).
- ·Both offer EU residency.