Portugal Payroll — DMR, TSU & IRS Withholding

Collect all mandatory data before the first payroll run: tax identification number (NIF), Social Security number (NISS), residency status, marital status and number of dependants for IRS withholding table selection, employment contract type, and professional category. Confirm the applicable RMMG region (Continente €920, Açores €966, Madeira €980 for 2026) and whether the worker qualifies for any special regime such as IFICI or legacy RNH, which changes the IRS withholding rate to a flat 20%.

For each pay period, compute the employee's gross remuneration (base salary plus any regular supplements, overtime premia, and the taxable portion of meal allowance above €6.00/day cash or €10.46/day card). Deduct the employee Segurança Social contribution at 11% of gross (no ceiling), then apply the monthly IRS withholding using the AT progressive formula tables for the appropriate marital/dependant category. Produce a compliant recibo de vencimento listing all mandatory items.

By the 10th of the following month, submit the Declaração Mensal de Remunerações (DMR) electronically via Portal das Finanças, reporting each worker's gross remuneration, SS contribution, and IRS withholding. By the 20th, transfer the employer Segurança Social contribution (23,75% of gross) plus the employee deduction (11%) to the DGSS via Segurança Social Direta, and remit the IRS withholding to the AT. Late DMR filing triggers fines of €150–€3,750; late payment attracts a 10% surcharge plus interest.

Portugal requires 14 salary payments per year. The subsídio de férias (holiday allowance, equivalent to one month's gross) must be paid before the employee starts their annual leave or by 30 June at the latest. The subsídio de Natal (Christmas bonus, one month's gross) must be paid by 15 December. Each subsídio is subject to its own autonomous IRS calculation using the same withholding table as the regular monthly salary, and to the standard 11% SS employee deduction. If duodécimos are in place, confirm each monthly slice is correctly included in the DMR.

In the first quarter of the following year, fulfil the annual payroll reporting obligations. The Relatório Único (covering employment data, remuneration, working time, training, and equal pay) is due by 15 April via the GEP/MTSSS portal. The Modelo 10 (declaration of income paid to non-residents, including any foreign workers on Portuguese payroll) is due by the last business day of February via Portal das Finanças. Verify IRS annual reconciliation: employees file their own Modelo 3 / Anexo A between 1 April and 30 June, but employers must ensure all DMRs are consistent with the annual totals. Retain payroll records for 5 years (labour law) and 10 years (tax law).