Working a Job and Freelancing at the Same Time: How It Works in Portugal

You have a full-time job and you’re thinking of taking on some extra projects? Good news: it’s completely legal in Portugal. You can be an employee and a freelancer at the same time — and many people do exactly that.

Here’s the practical guide to how it works.

How to open an activity while keeping your job

The process is the same as any other activity registration — you just don’t need to quit your job first.

1. Log into the Portal das Finanças with your NIF and password
2. Go to “Serviços” → “Atividade” → “Declarar Início”
3. Choose the start date
4. Select the activity code (CAE/CIRS) for what you’ll be doing
5. Choose the Simplified Regime (Regime Simplificado)
6. Submit

The process takes about 5 minutes. No fees, no special bureaucracy. You have both statuses from the moment you click “Submit”.

Income tax with two income sources

When you file your annual income tax return, you’ll have income from two categories:

• Category A — your salary (the company already withholds monthly)
• Category B — your freelance income

Income tax adds everything up and applies the normal progressive rates.

For Category B income under the simplified regime, the 0.75 coefficient applies — meaning only 75% of what you invoiced is considered taxable income. If you invoiced €12,000 as a freelancer, the tax authority only taxes €9,000.

Example: Tiago has an annual gross salary of €18,000 and invoiced €10,000 as a freelancer.

• Taxable income Category A: €18,000
• Taxable income Category B: €10,000 × 0.75 = €7,500
• Total taxable: €25,500

The company already withheld income tax throughout the year on his salary. In the annual declaration, Tiago may even be entitled to a refund, depending on the total of withholdings.

Social Security: the part that surprises people

This is the best news for those who already have a job: if your employer already deducts Social Security for you, your freelance income is treated differently.

Freelance income only contributes to the SS base if it exceeds a certain threshold — in practice, if your monthly freelance income is modest (below around €2,000/month), you likely won’t pay extra SS contributions.

But watch out for the most common mistake: you must always submit the quarterly SS declaration, even if the amount due is zero. It’s an informational declaration — the system confirms you’re exempt from additional contributions, but the declaration is still mandatory.

The most common mistakes

Not issuing invoices because “it’s a small amount”

All income must be invoiced. Even €100 from a friend. If the client is a private individual and doesn’t want to give their NIF, you issue the invoice as Consumidor Final (end consumer). But you always issue one.

Forgetting the quarterly declarations

As a freelancer, you must submit the quarterly VAT declaration and the quarterly SS declaration — even if you’re VAT-exempt and even if you don’t pay extra SS. These are mandatory declarations.

Mixing personal and professional expenses

Bought a new computer? You can deduct it as a professional expense — but only if you use it for work. If it’s mixed use (personal + professional), only the professional proportion is deductible.

The advantages of having both statuses

Beyond the extra income, there are practical benefits:

• Financial security — if the job ends, you already have an activity and clients
• Diversification — you don’t depend on a single income source
• Validation — you test business ideas without quitting your job

Ana, an English teacher, started giving private lessons (€400/month) while keeping her job. Two years later, the tutoring had grown — and she had the security to gradually transition to freelancing full-time.

✅ In summary

1. It’s 100% legal to be an employee and a freelancer simultaneously in Portugal. Open your activity on the Portal das Finanças in 5 minutes — you can do it today.

2. For income tax, both incomes are added together, but under the simplified regime only 75% of freelance income is taxable. For Social Security, if your employer already deducts, you likely won’t pay extra contributions — but quarterly declarations are always mandatory.

3. With FIZ the quarterly declarations are automatic — VAT and Social Security submitted on time, without you having to think about it. Even with two income streams, your admin doesn’t get more complicated.