Gross to net Payroll Engine Portugal

G2N Nova is the most advanced gross to net engine Portugal has to offer, delivering 100% accurate payroll calculations locally and in over 100 countries. This powerful, real-time payroll tax engine Portugal relies on is built on a unified, native platform that never stores or accesses employee-identifiable data.

Designed with Portugal’s strict data privacy laws in mind, G2N Nova ensures sensitive employee data stays within your systems—giving you full control, maximum security, and full compliance.

Global enterprises can now run precise, efficient, and compliant payroll operations—without compromising privacy.

Ready to transform the way you handle payroll?

Request a demo and experience the future of payroll in Portugal with G2N Nova.

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Gross to net payroll tax engine for Portugal

Need the latest payroll tax updates in Portugal? Our cloud-based tax engine Portugal solution delivers real-time, automated updates in line with national payroll legislation—no manual work, no delays.

Powered by G2N, this intelligent payroll calculator Portugal integrates seamlessly with your existing systems and historical payroll data to ensure 100% accuracy in every pay statement.

Whether you’re using an HCM, ERP, or WFM platform, G2N works as a plug-and-play module—no need to overhaul your tech stack.

•  Maintain your current systems
• Automate tax updates effortlessly
• Rely on a compliant, scalable salary calculator Portugal businesses can trust

Experience the future of compliant payroll in Portugal. Request a demo today.

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Solutions

1. HCM/ERP/WFM Systems: G2N integrates effortlessly with all major HCM, ERP, Time, Pay, and Attendance systems, allowing organizations to continue using their existing infrastructure without disruption.
2. System Integrators: G2N enables system integrators to easily add cross-border payroll functionality to their platforms. This simplifies international payroll management while giving integrators full control over the user experience, ensuring tailored and seamless payroll solutions for their clients.
3. Enterprises: Simplify your payroll management with G2N’s unified platform. Eliminate processing headaches, free up valuable time to grow your business, enhance your products, or finally take that much-needed vacation!
4. SMEs: Built for flexibility and growth, G2N scales effortlessly to accommodate your expanding workforce and evolving compliance needs. From 1 to 120,000 records, G2N ensures accurate real-time gross-to-net payroll processing, making it the perfect solution for small and medium-sized businesses.
5. Service Providers: Focus on what matters most to your clients and your business with G2N’s seamless payroll processing platform, trusted by leading Fortune Global 500 companies.

How It Works

Input Modules

• Employee Data: Collects all essential employee information, including compensation, benefits, and personal details.
• Leave Management: Tracks and manages leave, absences, and time-off in line with Portuguese labor laws.
• Time & Activity Tracking: Records work hours, attendance, and overtime for precise and compliant payroll calculations.

Payroll Processing with G2N Nova in Portugal

• Country-Level Filing: Integrates with Portuguese statutory authorities, including the Autoridade Tributária and Segurança Social, to ensure timely and accurate tax and contribution filings.
• Country-Level Compliance: Adheres to Portugal’s payroll regulations, supported by a dedicated in-house compliance team.
• Global Payroll Engine – Gross-to-Net Computation: Delivers accurate, real-time gross-to-net payroll calculations, ensuring correct earnings, deductions, and net pay.

Output Capabilities

• General Ledger (GL): Produces detailed financial reports and accounting records for payroll reconciliation.
• Treasury Management: Generates insights and reports to support salary funding and cash flow planning.
• Bank File Generation: Creates secure, SEPA-compliant bank files for payroll disbursement in Portugal.
• Payslips: Issues compliant, transparent payslips with clear breakdowns of deductions, taxes, and net salary.

G2N Nova is purpose-built for flexibility, scalability, and compliance. Designed for the Portuguese market, it integrates seamlessly with your existing systems to deliver a secure, efficient, and fully transparent payroll experience.

Features of G2N Payroll Engine Portugal

Benefits

Streamlined Payroll Processing for Portugal

G2N Payroll Engine Portugal delivers fast, accurate, and fully compliant payroll processing. Powered by a robust Tax Engine Portugal, it ensures precise salary and tax calculations across every payroll cycle.

Seamless Integration with Local Systems

Our platform integrates effortlessly with existing HR and payroll systems used in Portugal. It enables smooth inbound and outbound data flows, increases operational efficiency, and reduces risks in payroll tax processing.

No More Manual Data Extraction

G2N automates the extraction and processing of payroll data, eliminating the need for manual input. By leveraging the Tax Engine Portugal, businesses can reduce errors and save valuable time.

Multi-Country Payroll Made Easy

Designed for global operations, G2N supports multi-country payroll management from within Portugal. It ensures tax compliance and accurate processing across jurisdictions, all through a centralized engine built for scale.

Everything you need to know about Gross to Net Calculation in Portugal

Following is the information required to calculate gross to net salary.

Managing payroll in Portugal requires detailed knowledge of local tax codes, regional rules, and social security contributions. G2N Payroll Engine Portugal simplifies this complexity with automated gross-to-net salary calculations, real-time legislative updates, and seamless integration with your existing HR and payroll systems.

Key Inputs for Gross-to-Net Salary Calculation in Portugal

Geographic Location

• Mainland Portugal
• Autonomous Region of the Azores
• Autonomous Region of Madeira

Each region has distinct tax rates and withholding rules, which are applied automatically within our engine.

 Marital Status

• Not Married
• Married – Single Income Holder
• Married – Dual Income Holders

Per Order 791-A/2019, the same rules apply to de facto unions. The “Married – Single Holder” category is applicable only if one partner earns at least 95% of the total household income.

 Number of Dependents

Defined under IRS Code, Article 13, dependents include:

• Minor children or those under guardianship
• Adult children under 25 not earning above the minimum wage
• Dependents with permanent disability
• Civil godchildren (in defined circumstances)

The number of dependents directly influences your applicable tax deductions.

Disability Status

• Employee has a disability over 60%
• One or more dependents have a disability over 60%

This status provides access to additional tax exemptions and reductions.

Extraordinary Remuneration

(IRS Code, Art. 99º-C, No. 5)

• Holiday bonuses, Christmas bonuses, and overtime payments are subject to separate tax withholding and are not aggregated with monthly salaries.

Other Types of Income

• Subject to IRS and Social Security: Includes most standard employment-related income.
• Subject to IRS Only: Includes specific exemptions listed under Tax Code, Article 48, such as:
  • Payment for unused vacation
  • Certain family and medical allowances
  • Some termination compensations
  • Discounts on company shares

Exempt Income

As per IRS Code, Article 2º-A, the following are not considered taxable income:

• Employer contributions to pension and social schemes
• Employer-funded public transport passes
• Employer-provided health insurance
• Employer-covered relocation costs (within limits)
• Training-related contributions
• Childcare or educational subsidies

Social Security Contributions

Under the Code of Contributory Regimes (CRC):

• Standard employee rate: 11%
• Employer contributions and exceptions vary by contract type and worker status (e.g., interns, trainees, flexible contracts).
• If a special rate applies, it must be defined per your employment category.

Subsidies in Twelfths

Employees may receive annual subsidies (holiday and Christmas) in monthly instalments:

• No subsidies in twelfths
• 50% of one subsidy
• 50% of both or full one
• Full twelfths for both subsidies

This affects the monthly gross-to-net calculation and withholding structure.

Meal Allowance

The meal subsidy may be provided as:

• Cash (up to €6/day exempt)
• Card/Voucher (up to €10.20/day exempt)

Amounts above the thresholds are subject to taxation and social contributions.

Simplified, Compliant Payroll with G2N Payroll Engine Portugal

Our Tax Engine Portugal delivers:

• Accurate gross-to-net calculations based on real-time IRS tables and social security rules
• Automated handling of extraordinary remuneration and exempt income categories
• Region-specific tax logic for Mainland, Azores, and Madeira
• Smart integration of marital status, dependents, and disability deductions
• Seamless API integration with your existing payroll infrastructure
• Full alignment with Portuguese tax code and GDPR

Social Security Contributions

As part of Portugal’s mandatory payroll obligations, Social Security contributions play a crucial role in determining net salary and employer costs. G2N Portugal ensures all calculations comply with the Contributory Code and are aligned with the Social Support Index (IAS).

How G2N Portugal Adds Value

Our gross-to-net engine is designed to:

• Apply the correct rates and exemptions
• Adapt dynamically to IAS adjustments
• Classify income correctly for contributions
• Warn of contribution mismatches
• Generate audit-ready outputs

This ensures that every payroll run is both accurate and compliant, helping employers maintain trust, avoid penalties, and stay aligned with Portuguese social contribution laws.

Personal Income Tax

Personal Income Tax, or Imposto sobre o Rendimento das Pessoas Singulares (IRS), is a core element in the gross-to-net salary calculation in Portugal. G2N Portugal integrates the IRS framework to ensure precise withholding based on employee profiles, residency status, income brackets, and applicable deductions.

Resident Taxation – Progressive IRS Rates

Residents in Portugal are subject to taxation on their worldwide income. IRS is calculated using a progressive scale, with increasing rates applied across defined income bands. These rates are reviewed annually and may be adjusted as part of the state budget.

2025 Progressive IRS Rates for Residents

The G2N engine uses this table in conjunction with income type, withholding rules, and family status to determine the correct monthly retention.

Non-Resident Taxation – Flat IRS Rate

Non-residents are taxed only on Portuguese-source income. This includes employment income, pensions, or services rendered within Portugal. A flat IRS rate of 25% is applied to such earnings, without access to deductions or family-related reductions.

G2N Portugal automatically applies non-resident tax rules where applicable and excludes worldwide income from the calculation.

Solidarity Surcharge (Adicional de Solidariedade)

High-income earners may also be subject to an additional solidarity surcharge:

IRS Withholding Rules

Portugal uses withholding tables to determine the amount to be withheld each month from gross salaries. These tables factor in:

• Marital status (single, married one holder, married two holders)
• Number of dependents
• Residency status
• Region (Mainland, Azores, Madeira)
• Disability status (for the employee or dependents)

G2N dynamically references the correct withholding table and ensures that monthly deductions are aligned with legal requirements and updates to Order 791-A/2019 and subsequent regulatory changes.

Income Classification for IRS Purposes

Income is classified into specific categories for IRS treatment. G2N Portugal supports classification and tax treatment for:

• Category A: Employment income
• Category H: Pension income
• Extraordinary remuneration (e.g., bonuses, back payments)
• Other income subject to IRS (but not to Social Security)

Certain income types, such as indemnities, meal subsidies, or employer-covered training expenses, may be exempt under Article 2-A of the IRS Code, and G2N excludes these from taxable income calculations accordingly.

Resident Determination

An individual is considered tax resident in Portugal if they:

• Remain in the country for more than 183 days (consecutive or not) within a 12-month period, or
• Maintain a habitual residence in Portugal on any day during that period

G2N includes rules-based checks for residency classification and can apply non-resident taxation by default, unless overridden by validated tax residency declarations.