The other portion (about a quarter of the salary paid by the employer) is retained in taxes and social security contributions.

In this year's edition of the “Taxing wages” report, the OECD highlights that the impact of taxes and social contributions on the income that workers actually take home varies considerably between different countries.

For example, in Belgium, less than 61% of gross wages reach workers' wallets, while in Colombia, 100% of gross wages are transferred to employees.

In Portugal, workers take home, on average, 75% of their gross salary at the end of the month. The other portion goes to the State's coffers: 14% through Income Tax and 11% through contributions paid by the employee himself.

Portugal is therefore among the seven OECD countries where the share that IRS takes from gross income and the share that goes to Social Security is similar (there is a difference of less than three percentage points), along with the Czech Republic, Greece, South Korea, Lithuania, Slovakia and Turkey.

Above average

In Portugal, these burdens are even heavier than the OECD average (34.9%). Even so, they were lighter in 2024 than in the previous year (reduction of 1.75 percentage points resulting from the reduction in Income Tax). Furthermore, among the various countries, there are situations in which discounts absorb even more of the labour costs than in Portugal, namely in Belgium (52.6%) and Germany (47.9%).

All data mentioned relate to the average worker, who does not care for dependents. Business associations have warned about the weight of taxes and social contributions in their costs. The current Government had announced a study “aimed at reviewing” the discount rate for Social Security, but, with the early end of the legislature, this was put on hold. Portugal is, on the other hand, in line with the OECD. The average impact of taxes and social contributions on gross income is also 25% across the organization as a whole, as in Portugal. However, in the OECD as a whole, Social Security has a smaller share (9.6% compared to 11% in Portugal) in the portfolio.