Methodology - Puerto Rico (2026)

Educational model - not a Hacienda assessment, not a Planilla, not tax advice.

Employee

Bona fide residents of Puerto Rico do not pay US federal income tax on Puerto Rico-source income (Internal Revenue Code section 933). Only the Puerto Rico income tax and federal payroll taxes apply.
Puerto Rico income tax (Departamento de Hacienda) is progressive: 0% up to USD 9,000; 7% on the part from 9,000 to 25,000; 14% on the part from 25,000 to 41,500; 25% on the part from 41,500 to 61,500; and 33% above 61,500.
A gradual adjustment applies to higher incomes (phasing in over income above USD 500,000) and is added on top of the band tax.
Personal exemption: USD 3,500 for a single filer or USD 7,000 for a married couple filing jointly; each dependent adds USD 2,500.
FICA (federal payroll): Social Security 6.2% on earnings up to the 2026 wage base of USD 184,500, plus Medicare 1.45% on all earnings, plus an additional Medicare 0.9% on earnings above USD 200,000.
Employer cost: the employer matches Social Security at 6.2% (to the same wage base) and Medicare at 1.45%; the employer does not match the additional 0.9% Medicare.
Out of scope: the alternate basic tax, Puerto Rico SUTA and the federal FUTA, the special young-worker and other exemptions, itemized deductions and credits beyond the personal and dependent exemptions, and any Act 60 incentive regimes.

Net profit = revenue - expenses, taxed under the same Puerto Rico progressive bands and gradual adjustment as an employee.
Self-employment tax (SECA) replaces FICA: 12.4% for Social Security and 2.9% for Medicare, charged on 92.35% of net self-employment earnings. Social Security applies up to the 2026 wage base of USD 184,500; Medicare has no ceiling and an additional 0.9% applies above USD 200,000.
The same personal exemption (USD 3,500 single / USD 7,000 joint) and dependent exemption (USD 2,500 each) apply.
Out of scope: the deduction for one half of SECA, estimated-tax timing, the alternate basic tax, business deductions beyond the revenue-minus-expenses input, and any Act 60 incentive regimes.