Puerto Rico Tax Calculator (2026)
Income tax rates and take-home pay for Puerto Rico
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Puerto Rico Income Tax Brackets (2025)
| Bracket | Income Range | Rate |
|---|---|---|
| No tax bracket | $0 - $9,000 | 0.0% |
| 7% bracket | $9,000 - $25,000 | 7.0% |
| 14% bracket | $25,000 - $41,500 | 14.0% |
| 25% bracket | $41,500 - $61,500 | 25.0% |
| 33% bracket | $61,500+ | 33.0% |
Personal allowance: $3,500
Social Security (OASDI)
| Bracket | Income Range | Rate |
|---|---|---|
| Social Security employee rate | $0 - $168,600 | 6.2% |
Capped at $10,449 per year
Medicare (HI)
| Bracket | Income Range | Rate |
|---|---|---|
| Medicare base rate | $0 - $200,000 | 1.5% |
| Medicare additional rate | $200,000+ | 2.4% |
Puerto Rico Disability Benefits Tax
| Bracket | Income Range | Rate |
|---|---|---|
| Disability benefits tax | $0+ | 0.6% |
Puerto Rico Employment Security Tax
| Bracket | Income Range | Rate |
|---|---|---|
| Employment security tax | $0+ | 0.8% |
Alternate Basic Tax (ABT)
| Bracket | Income Range | Rate |
|---|---|---|
| ABT 1% bracket | $25,000 - $50,000 | 1.0% |
| ABT 3% bracket | $50,000 - $75,000 | 3.0% |
| ABT 5% bracket | $75,000 - $150,000 | 5.0% |
| ABT 10% bracket | $150,000 - $250,000 | 10.0% |
| ABT 24% bracket | $250,000+ | 24.0% |
Applies when income exceeds $25,000
Gradual Adjustment Tax (GAT)
| Bracket | Income Range | Rate |
|---|---|---|
| GAT 5% on excess over USD 500,000 | $500,000+ | 5.0% |
Applies when income exceeds $500,000
Tax Rate Reduction (Act 60)
| Bracket | Income Range | Rate |
|---|---|---|
| Reduction to 92% for gross income ≤ USD 100,000 | $0 - $100,000 | 0.0% |
| Reduction to 95% for gross income > USD 100,000 | $100,000+ | 0.0% |
Key Facts
Tax Year
2025
Currency
USD
Top Rate
33.0%
Brackets
5 brackets
Allowance
$3,500
Social Contributions
4 items
Assumptions
- · Model assumes a Puerto Rico resident individual employee with employment income only.
- · Personal exemption of USD 3,500 applied as a deduction from gross income.
- · ABT (Alternate Basic Tax) modeled as a surcharge on regular income tax; computed on ABT taxable income which approximates gross income for employees without significant exempt income add-backs.
- · Gradual adjustment tax (GAT) applies when net taxable income exceeds USD 500,000; modeled as a surcharge with a cap of 33% of exemption plus USD 8,895.
- · Tax Rate Reduction: For taxable years after 31 December 2019, total tax is reduced to 92% of computed tax if gross income ≤ USD 100,000, or 95% if gross income > USD 100,000. This reduction is modeled as a surcharge with negative rate.
- · Self-employed optional tax, Act 132 rental exemptions, Act 22 investor exemptions, and Act 257 Earned Income Credit excluded as model is for standard W-2 employee.
- · US Social Security and Medicare withholding (employee portion) included as separate social contributions.
- · Puerto Rico disability benefits tax and employment security tax included as employee contributions.
- · Itemized deductions (charitable, medical, mortgage interest, education, casualty losses) excluded; model assumes standard employee with no major deductible expenses beyond the personal exemption.
- · No standard deduction exists in Puerto Rico; personal exemption is the primary relief mechanism.
- · Act 60 Act 22 provisions for resident investor exemptions and Act 257 EIC excluded as outside scope of standard resident employee model.
Frequently asked questions
What are the income tax brackets in Puerto Rico?
Puerto Rico has five income tax brackets ranging from 0% to 33%. Income up to USD 9,000 is tax-free, then rates increase progressively: 7% from USD 9,000 to USD 25,000, 14% from USD 25,000 to USD 41,500, 25% from USD 41,500 to USD 61,500, and 33% on income above USD 61,500. A personal exemption of USD 3,500 is deducted from your gross income before calculating tax.
How much will I pay in social contributions as an employee in Puerto Rico?
As an employee in Puerto Rico, you'll pay four types of social contributions: US Social Security at 6.2% (capped at USD 10,449.12 annually), Medicare at 1.45% with an additional 0.9% on income over USD 200,000, Puerto Rico Disability Benefits Tax at 0.6%, and Puerto Rico Employment Security Tax at 0.75%. These contributions are withheld from your paycheck and are not deductible from your income tax.
What is the Alternate Basic Tax (ABT) and do I have to pay it?
The Alternate Basic Tax is a surcharge that applies if your gross income exceeds USD 25,000. It ranges from 1% on income between USD 25,000 and USD 50,000, up to 24% on income above USD 250,000. Most employees earning above USD 25,000 will owe ABT in addition to regular income tax, and it's automatically calculated as part of your total tax liability.
Does Puerto Rico offer any tax reductions for residents?
Yes, Puerto Rico offers a Tax Rate Reduction under Act 60 that reduces your total tax to 92% of the computed amount if your gross income is USD 100,000 or less, or 95% if your gross income exceeds USD 100,000. This reduction applies to regular income tax plus surcharges, providing meaningful savings for most resident employees.
What happens if I earn over USD 500,000 in Puerto Rico?
If your net taxable income exceeds USD 500,000, you'll owe an additional Gradual Adjustment Tax (GAT) of 5% on the amount above USD 500,000. This surcharge is applied on top of regular income tax and the Alternate Basic Tax, with a maximum cap of 33% of your exemption plus USD 8,895.
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