Individual income tax in Puerto Rico is calculated with a table of progressive rates set by Section 1021.01 of the 2011 Código de Rentas Internas (Internal Revenue Code of Puerto Rico). "Progressive" means each bracket of income is taxed at its own rate. You do not pay 33% on all of your income just because part of it falls in the highest bracket.
If you are not sure whether you have to file, start with who must file. Technical terms are explained in the glossary. This page explains the table that applied to tax year 2025 (returns filed in 2026), how the tax is adjusted and what happened with the tax reform discussed in 2025 and 2026.
The current table
This is the table the Departamento de Hacienda (Puerto Rico's Treasury Department, "Hacienda") publishes in the 2025 instruction booklet. It is the same one in the Code for tax years beginning after December 31, 2012:
| If net taxable income is | The tax will be |
|---|---|
| Not over $9,000 | 0% |
| Over $9,000 but not over $25,000 | 7% of the excess over $9,000 |
| Over $25,000 but not over $41,500 | $1,120 plus 14% of the excess over $25,000 |
| Over $41,500 but not over $61,500 | $3,430 plus 25% of the excess over $41,500 |
| Over $61,500 | $8,430 plus 33% of the excess over $61,500 |
Net taxable income is what is left after you subtract from your adjusted gross income the allowable deductions, the personal exemption ($3,500 if you are an individual taxpayer or $7,000 if you are married filing a joint return) and the dependent exemption ($2,500 each). We explain it in deductions and exemptions.
The 92% or 95% reduction
After applying the table, the Code requires a reduction. Under Section 1021.01(c), for years beginning after December 31, 2019:
- If your gross income is not more than $100,000, your determined tax is 92% of the tax from the table (plus the gradual adjustment, if it applies).
- If your gross income is more than $100,000, it is 95%.
Note that the $100,000 test looks at gross income (with certain exempt income that the booklet tells you to add), not net income. On the income tax return (planilla, Form 482), this happens on line 17 of Part 3. If you calculate your tax using preferential rates (Schedule A2 Individual), the booklet says this percentage is not applied on that line.
In practice, this makes the effective rate of each bracket a bit lower. For example, the 7% bracket works out to 6.44% for someone with gross income of $100,000 or less.
Worked examples
These examples use hypothetical amounts and assume there is only wage income and no other deductions or credits.
Individual taxpayer with $45,000 in wages. Net taxable income is $45,000 − $3,500 = $41,500. Under the table, the tax is $3,430. Because gross income is not more than $100,000, it is multiplied by 92%: $3,430 × 0.92 = $3,155.60. That is about 7% of the person's wages.
Married couple with two children and $80,000 in combined wages (joint return). Net income: $80,000 − $7,000 − $5,000 = $68,000. Table: $8,430 + 33% × ($68,000 − $61,500) = $8,430 + $2,145 = $10,575. With the 92% reduction: $9,729. That is about 12.2% of gross income.
Individual taxpayer with $150,000 in wages. Net income: $146,500. Table: $8,430 + 33% × $85,000 = $36,480. Because gross income is more than $100,000, it is multiplied by 95%: $34,656, about 23.1% of wages.
You can try your own amounts in the calculator:
The calculator gives an estimate. Your return may include income taxed at preferential rates, credits, the alternate basic tax or other items that change the result. It is also available in calculators.
The gradual adjustment for high incomes
If your net taxable income is more than $500,000, the Code adds a gradual adjustment (Schedule P Individual) that takes back the benefit of the rates below 33% and of the exemptions. Under the 2025 Schedule P and Section 1021.01(b):
- Calculate 5% of the excess of your net taxable income over $500,000.
- Calculate the limit: $8,895 plus 33% of your personal exemption, additional veteran's exemption and dependent exemption.
- The gradual adjustment is the smaller of step 1 and step 2.
The adjustment is added to the tax from the table before the 95% is applied. For married couples filing separately or choosing the optional computation, the $500,000 limit is measured separately for each spouse.
An individual taxpayer with net taxable income of $600,000 and a personal exemption of $3,500. Table: $8,430 + 33% × $538,500 = $186,135. Gradual adjustment: 5% × $100,000 = $5,000. The limit is $8,895 + 33% × $3,500 = $10,050, so the adjustment is $5,000. Total before the reduction: $191,135. With the 95%: $181,578.25.
Other ways the tax is calculated
Alternate basic tax (contribución básica alterna, CBA). This is a parallel computation that applies to anyone with net income subject to the CBA of more than $25,000. For years beginning after December 31, 2018, the Code's table goes from 1% (over $25,000 up to $50,000) to 3%, 5%, 10% and 24% (over $250,000). You pay the CBA only if it is higher than your regular tax. It is calculated on Schedule O Individual.
Preferential rates. Certain income, such as eligible interest, dividends and long-term capital gains, may be taxed at flat rates. Schedule A2 Individual lets you compare that computation with the regular table and choose the more favorable one.
Optional tax for self-employed workers. If at least 80% of your gross income comes from services, you can choose to pay a flat rate on gross income (from 6% to 20%). We explain it in self-employed workers.
Nonresident aliens not engaged in a trade or business in Puerto Rico are taxed at a flat rate of 29% on Puerto Rico-source income (15% on dividends), according to the 2025 booklet.
What happened with tax reform?
In January 2026, the governor presented to the Legislative Assembly the second phase of a tax reform that proposed, among other things, a table with lower rates. That reform did not become law in time for 2025. Instead, the Legislature approved Joint Resolution 6-2026 (Resolución Conjunta 6-2026), which created a one-time relief payment for tax year 2025.
According to Hacienda's guide, the relief recalculates your 2025 tax with this revised table (and with an additional deduction of $2,500 for each dependent under 18) and pays you the difference if it comes out in your favor. It is a separate program: it does not change the Code or the table on your return.
| Revised net taxable income | JR 6-2026 table (for the 2025 relief only) |
|---|---|
| Not over $12,500 | 0% |
| $12,500 to $25,000 | 6% of the excess over $12,500 |
| $25,000 to $50,000 | $750 plus 12% of the excess over $25,000 |
| $50,000 to $100,000 | $3,750 plus 24% of the excess over $50,000 |
| $100,000 to $150,000 | $15,750 plus 29% of the excess over $100,000 |
To qualify, you had to have filed your 2025 return on time, have been a resident all of 2025 and have (revised) net taxable income of $150,000 or less, among other requirements. You can follow updates in news.
What about 2026? The official compilation of the Code published by the Oficina de Gerencia y Presupuesto (Office of Management and Budget), revised as of June 18, 2026, keeps the same five-bracket table, and Hacienda's publications reviewed as of October 12, 2026, show no new rate law for individuals. If the Legislature approves changes, this page will be updated.
Frequently asked questions
If my net income is over $61,500, do I pay 33% on all of it?
No. Only the part over $61,500 is taxed at 33%. The first $9,000 is taxed at 0%, the part between $9,000 and $25,000 at 7%, and so on. That is why the table says "$8,430 plus 33% of the excess."
Is the 92% reduction applied automatically, or do I have to request it?
It is part of the return's computation. SURI (Hacienda's online system) and certified software apply it on the corresponding line based on your gross income. If you prepare the return by hand to check it, remember that the $100,000 test uses gross income, not net income.
Which table does my employer use for withholding?
Employers use withholding tables published by Hacienda, which aim to approximate your annual tax. Withholding is not your final tax. When you file, what was withheld is compared with what you actually owe. See withholding and forms.
Will the 2025 relief be repeated in 2026?
Joint Resolution 6-2026 authorized the relief only for tax year 2025, according to Hacienda's guide. Any relief for 2026 would require a new measure.
Sources
- Departamento de Hacienda, "Folleto de Instrucciones, Planilla de Contribución sobre Ingresos de Individuos 2025" (rev. 27 de febrero de 2026). hacienda.pr.gov
- Oficina de Gerencia y Presupuesto, "Puerto Rico Internal Revenue Code of 2011, as amended", compilación rev. 18 de junio de 2026, Sección 1021.01. bvirtualogp.pr.gov
- Departamento de Hacienda, "Anejos de la Planilla 2025: Anejo P Individuo, Ajuste Gradual" (rev. 20 de junio de 2025). hacienda.pr.gov
- Departamento de Hacienda, "Guía sobre el Cheque de Alivio Contributivo para los Trabajadores y la Clase Media del Año Contributivo 2025" (rev. 20 de mayo de 2026). hacienda.pr.gov
- Departamento de Hacienda, "Carta Circular de Rentas Internas Núm. 26-10". hacienda.pr.gov
787TAX is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the CRIM or the IRS. This page is general information, not tax or legal advice. Example figures are hypothetical. Found an error? Tell us.
