Italy vs Portugal — Tax Comparison 2026
Italy: 23%–43% across 3 brackets. Portugal: 13%–48% across 9 brackets. Compare take-home pay side by side for employees and contractors.
Are taxes higher in Italian or Portugal?
It's close — for employees at $100,000, Italian and Portugal are within $300 of each other per year. At $100,000, an employee in Italy takes home $56,836 versus $56,536 in Portugal — a difference of $300 per year. For contractors, Italy comes out ahead: $67,965 versus $61,339. The winner changes with income level — see the table below.
Estimates based on 2026 rates and approximate exchange rates. Actual take-home varies by individual circumstances.
USD amounts use approximate exchange rates (EUR: 1.1572, EUR: 1.1572). Local currency figures are exact.
| Metric | Italy | Portugal |
|---|---|---|
| Gross (EUR/EUR) | 86.417 € | 86 417 € |
| Gross (USD) | $100,000 | $100,000 |
| Income Tax | 29.359 € | 28 054 € |
| Social Security | 7942 € | 9506 € |
| Net (EUR/EUR) | 49.116 € | 48 857 € |
| Net (USD) | $56,836+$300 | $56,536 |
| Effective Rate | 43.2% | 43.5% |
Gross (EUR/EUR)
Italy
86.417 €
Portugal
86 417 €
Gross (USD)
Italy
$100,000
Portugal
$100,000
Income Tax
Italy
29.359 €
Portugal
28 054 €
Social Security
Italy
7942 €
Portugal
9506 €
Net (EUR/EUR)
Italy
49.116 €
Portugal
48 857 €
Net (USD)
Italy
$56,836
+$300Portugal
$56,536
Effective Rate
Italy
43.2%
Portugal
43.5%
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 $300 more per year ($25/mo) as an employee
Italy gives you $6,626 more per year ($552/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) | Italian net | Portugal net | Who keeps more |
|---|---|---|---|
| $60,000 | $37,712 (37.1%) | $38,776 (35.4%) | Portugal (+$1,064) |
| $100,000 | $56,836 (43.2%) | $56,536 (43.5%) | Italian (+$300) |
| $150,000 | $81,520 (45.6%) | $77,225 (48.5%) | Italian (+$4,295) |
Contractors / Self-Employed
| Gross (USD) | Italian net | Portugal net | Who keeps more |
|---|---|---|---|
| $60,000 | $40,779 (32.0%) | $40,179 (33.0%) | Italian (+$600) |
| $100,000 | $67,965 (32.0%) | $61,339 (38.7%) | Italian (+$6,626) |
| $150,000 | $101,948 (32.0%) | $90,023 (40.0%) | Italian (+$11,925) |
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How Taxes Work
Italy Tax System
Employee
- ·IRPEF 2026 (3 brackets: 23%/33%/43%).
- ·This is a conservative estimate — employment tax credit (detrazione lavoro dipendente, up to €1,955) is not included and would reduce tax for incomes below ~€50,000.
- ·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.
Portugal Tax System
Employee
- ·IRS 2026: 9 brackets (12.5%-48%).
- ·Dedução específica €4,587.
- ·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 (effective ~12%) 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 ~12% effective income tax 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.
- ·Portugal has a clearer path to citizenship (5 years).
- ·Both offer EU residency.