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Comment by binarycrusader | Hacker News Reader

I'm not sure I quite understand the structure, but it does look relatively high: https://en.wikipedia.org/wiki/Taxation_in_Portugal

The calculator here shows it's not anywhere near 88% though in most cases: https://investomatica.com/income-tax-calculator/portugal

  Income Before Tax       80 000 €
  Income Tax            - 25 472 €  
  Solidarity Rate Tax          0 €
  Social Security       -  8 800 €

  Total Tax             - 34 272 €
  Take Home Pay           45 728 € 
  Total Deductions      -  8 800 € 
  Average Tax Rate          42,8 %

Disclaimer: of course this varies significantly based on freelancing, government employee status, etc.

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Because the calculator does not really take into account the 35% social security if the money is paid by a foreign entity to the foreigner directly.

@binarycrusader: I can‘t reply below. It‘s not 35% but 34,75%. It‘s easy to find that online and this rate is not depending on the person. A foreigner or nomad does by definition not have a Portuguese employer. They have to pay the employer part themselves. It‘s that simple.

@binarycrusader: It‘s mentioned on countless sites related to the NHR and Golden Visa and all of these things. I talked this through with two Portuguese accountants. Is that enough?

Sure, but the social security contributions and tax rates vary wildly based on who your employer is, etc. so it's misleading to claim it's 88% without specifying the specific conditions. Also, according to the WikiPedia page, none of the Social Security Contribution rates are exactly 35%. Would you care to share the exact conditions? I don't read this the same way: can you point to which "Social Security Regime" on the WikiPedia page you believe this falls under?

If you are a contractor with a Portuguese entity, you can use a special regime called Recibos Verdes, that means the social security payments are smaller and independent of your salary, I think 100€ per month is the minimum. This was a loophole by many companies used to avoid having "real" employees, and there have been crackdowns on this, it's mostly for temporary contractors. If you have 3 years of concurrent "temporary" contracts with the same entity, you must ve registered as an employee.

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