We live more and more, so we also work more and more. The age of reform in Portugal is automatically updated every year depending on the annual variation of average life expectancy. As a rule, the value has increased consistently (a good signal, given the growing average life expectancy and health conditions), although it had a slight descent after the pandemic, given the increase in mortality by 2020 and 2021.
And how much do we contribute, through taxes and social security, to state revenues during our working life? Throughout a 40 -year contributory career, a career with normal duration, the tax burden paid by a worker can reach millionaire values.
Considering different constant monthly gross wage values, and IRS rates scheduled for 2025, State Tax Revenue can go from 238,000 €, for a worker who earns € 1,000 per month, up to 4,000, for a salary of 10,000 €. With a salary of € 1,500 monthly brutes, the state raises 400,000 € along the career of the worker. If the salary is € 3,000 per month, the state raises 954 thousand €.
This tax burden includes IRS and contributions to Social Security (TSU), both the part paid by the worker (11%) and the party paid by the employer (23.75%). While for lower wages, the weight of social contributions is predominant, for higher income IRS becomes the largest portion of the tax burden on work. This is because the contributions to Social Security are equal, in percentage, to any level of income (11% of the worker’s gross salary and 23.75% of the employer’s gross wage), while IRS It is progressive (lower level pays a 13%marginal rate, while the highest level pays a marginal rate of 48%).
This tax burden on work aims to finance public services and social state, in particular pensions during reform, and therefore there is a future return, although taxpayers often feel that this return is insufficient as a result of the weaknesses of public systems and low pensions.
Also read:
- The facts seen to the magnifying glass by André Pinção Lucas e Juliano Ventura – A partnership of the postcard with the Institute
