I Ran the Numbers on Moving to Lisbon. The U.S. Math Was the Problem, Not Portugal’s.

My friend Maya works remotely for a New York company, makes $150,000 a year, and has no plans to ever set foot in that office again. Last winter, she started looking at Lisbon. Cobblestone streets, ocean light, rent a third of what she pays in Brooklyn. She came to me bracing for the bad news to come from Portugal’s side. It didn’t.

She wasn’t asking whether Lisbon was affordable. She wanted to know whether moving there would actually leave her with more money at the end of the month.

The assumption almost everyone makes

People hear “moving to Europe” and brace for European taxes. Portugal, especially, has a reputation, partly earned, for taking a serious bite out of high earners. So Maya did what most people do: she googled “Portugal tax for expats,” found a wave of old blog posts about NHR, Portugal’s famous flat 20% rate for new residents, and assumed she’d land somewhere close to that. Looking at salary alone wasn't enough. She needed to compare taxes, cost of living, and take-home pay side by side. What she found flipped the story.

The details that changes everything: NHR is gone

The Non-Habitual Resident regime, which made Portugal a digital nomad magnet for over a decade, stopped accepting new general applicants at the end of 2024. What replaced it, IFICI, only covers a narrow list of jobs: scientific research, certain technology and innovation roles, and a limited group of export-focused companies. A marketing lead, an operations manager, and a generalist consultant, almost none of them qualify. If Maya becomes a Portuguese tax resident (for more than 183 days a year), she won't get a flat 20%. She’s on Portugal’s standard progressive scale, which runs from roughly 14.5% up through 48%, plus a solidarity surcharge above €80,000. On a $150,000 salary, that could push her effective Portuguese tax rate into the high 30% range, depending on her circumstances.

That’s a real number. It’s just not the number that almost caught her off guard. For digital nomads and remote workers alike, tax residency often matters more than geography.

Where the actual landmine was sitting

Maya assumed that once she moved, her U.S. tax exposure would shrink to almost nothing. Three things stood in the way of that assumption, and surprisingly, none of them had anything to do with Portugal.

First, the Foreign Earned Income Exclusion only goes so far. For 2026, it shelters up to $132,900 of qualifying foreign-earned income. Income above that amount remains subject to U.S. tax rules, although many taxpayers also rely on the Foreign Tax Credit to reduce or eliminate additional U.S. federal income tax. The interaction between the two is more complicated than simply subtracting the exclusion from your salary.

Second, FICA isn’t automatically off the table either. Depending on how you’re employed, U.S. Social Security and Medicare withholding may continue even while living abroad. For many remote W-2 employees of U.S. companies, payroll taxes remain part of the equation unless a totalization agreement or employment restructuring changes the outcome. The U.S. and Portugal do have a totalization agreement, but whether it applies to your specific setup depends on the details, not a blanket rule.

Third, and this is the one that almost got here: New York does not let go of you just because you bought a one-way ticket. New York is one of the most aggressive states in the country about residency. If Maya keeps an apartment, a driver’s license, a voter registration, or close family ties in the state without formally severing them, New York may continue treating her as a resident, or determine she never abandoned her domicile, and tax her full income, the same income Portugal is also taxing, as if she never left.

People assume the foreign country is where the tax risk lives. For many remote workers leaving high-tax states, the real risk is the state they think they've already left.

What the comparison actually looks like

Income tax exposure on a $150,000 remote salary, moving from NYC to Lisbon, residency properly broken:

Portugal’s line was the one Maya had already braced for. The New York line is the one that swings from zero to a full duplicate tax bill depending entirely on paperwork, and it’s the one almost nobody checks until a notice shows up two years later.

The actual math that matters before you book the flight

Before any move like this, you need four numbers, not two:

Your true U.S. federal liability after FEIE and the foreign tax credit

FICA, which often continues regardless of location, depending on your employment structure

Your destination country’s real tax regime, not the version a 2022 blog post described

Whether your home state will actually agree that you’ve left

Skip the fourth one, and the first three don’t matter. You can do everything right with the IRS and Portugal’s Finanças and still get a state tax bill that erases the entire upside of the move.

Run your own version of this.

A move from New York City to Lisbon on a $150,000 remote salary is exactly the kind of comparison the calculator was built for: take-home pay, the tax layers that actually stack, and the monthly flexibility left once housing and cost of living are factored in.

Curious how your own numbers compare? Start with Maya's scenario, then adjust the salary, destination, and expenses to match your own situation.

Run her exact scenario, or swap in your own numbers →

If you’re weighing a similar move and the country, you’re eyeing used to have a tax deal everyone talks about, check whether that deal still exists before you build your whole plan around it. Programs like NHR get phased out quietly. The blog posts about them don’t.

Most people spend weeks comparing apartments, neighborhoods, and visa options before moving abroad. Spend an afternoon understanding your tax residency instead. It might end up being the most expensive part of the move.

Have you been surprised by a tax rule or hidden cost while planning an international move? I’d love to hear which city, and which assumption caught you off guard.

Tax laws change, and individual circumstances vary. Use this as an educational example, not personal tax advice.