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% on income up to USD 9,000, then 7%, 14%, 25%, and finally 33% on income above USD 61,500. The tax system applies a USD 3,500 personal exemption as a deduction from your gross income before calculating tax. Additionally, Act 60 provides a tax rate reduction that lowers your total tax to 92% if your gross income is USD 100,000 or less, or 95% if it exceeds USD 100,000.
Do I pay US Social Security and Medicare taxes if I work in Puerto Rico?
Yes, as an employee in Puerto Rico you still pay US Social Security (OASDI) at 6.2% and Medicare (HI) at 1.45%, similar to mainland US workers. You also pay Puerto Rico-specific contributions including a 0.6% disability benefits tax and 0.75% employment security tax, which are local social contributions separate from federal withholdings.
Is there an alternative minimum tax in Puerto Rico?
Yes, Puerto Rico has an Alternate Basic Tax (ABT) that functions as a surcharge on your regular income tax when gross income exceeds USD 25,000. The ABT rates range from 1% on income between USD 25,000 and USD 50,000, scaling up to 24% on income over USD 250,000, ensuring higher earners pay a minimum level of tax.
What happens if I earn over USD 500,000 in Puerto Rico?
If your taxable income exceeds USD 500,000, you become subject to the Gradual Adjustment Tax (GAT), which applies an additional 5% surcharge on income above that threshold. This is applied after your regular income tax and ABT calculations, creating an additional tax burden for very high earners.
Are there special tax incentives for relocating to Puerto Rico?
Puerto Rico offers Act 60 provisions that include tax rate reductions for residents, as mentioned above, but this calculator focuses on standard W-2 employee taxation. If you are an investor or self-employed, you may qualify for additional exemptions under Act 22 or Act 257, but those require separate evaluation and are outside the scope of standard employee income tax.
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