ARTICLE · 20 FEBRUARY 2026

Performance Bonuses And Profit Sharing

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OE/2026 extends income tax exemption on productivity bonuses and others...

PortugalEmployment and HR

Nuno Ferreira Morgado

José Pedro Anacoreta

Vítor Madeiras Rodrigues

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OE/2026 extends income tax exemption on productivity bonuses and others

Article 96 of the 2026 State Budget (Law 73‑A/2025) maintains the personal income tax exemption applicable to productivity bonuses and others.This exemption stems from Article 115 of the 2025 State Budget, which in turn stems from Article 236 of the 2024 State Budget.

The Tax Authority recently issued a Guidance Note providing clarifications on Article 115 of the 2025 State Budget which may be relevant to interpreting the new exemption rules since the provisions are similar.

1. The scope of Article 96 of the 2026 State Budget

Article 96 establishes that amounts paid or made available to employees or members of statutory bodies in 2026 are exempt from personal income tax up to a limit of 6% of the employee's annual base salary, provided that:

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