Average salary in Portugal: What employers need to budget for

Portugal has become one of the most popular destinations in Europe for international businesses looking to hire. A strong talent pool, competitive salary expectations, and a stable legal environment make it an attractive market. But before you make your first offer, you need a clear picture of what salaries look like, how the payment structure works, and what the total cost of employment will be. This guide gives you that.

Why salary benchmarking matters before you hire

Before making an offer to a candidate in Portugal, overseas employers need to understand what the local market expects. Pitching a salary too low damages your ability to attract strong candidates. Pitching it without accounting for employer contributions means your cost projections will be wrong from day one.

Understanding the average salary in Portugal is therefore one of the first practical steps in any hiring process. Many businesses that are new to the Portuguese market use an employer of record in Portugal to navigate both the salary benchmarking and the compliance side, removing the need to build local expertise before their first hire.

This guide covers what salaries look like across key sectors, how Portugal's 14-payment structure affects offer design, and what total employment costs employers should budget for.

What is the average salary in Portugal?

Average salaries in Portugal vary significantly by industry, role, seniority, and location. Lisbon and Porto tend to command higher salaries than other regions, reflecting the higher cost of living and concentration of international businesses.

As a general guide for employers benchmarking offers:

• The national minimum wage in Portugal is EUR 11,480 per annum (EUR 957 per month across 12 payments).
• Average salaries across the economy sit broadly in the range of EUR 18,000 to EUR 35,000 per annum depending on sector and experience.
• Technology, finance, and professional services roles typically sit above the average, with senior positions in Lisbon often ranging from EUR 40,000 upwards.
• Administrative, customer service, and entry-level roles tend to sit closer to the EUR 14,000 to EUR 20,000 range.
• Engineering and technical roles vary widely but commonly fall between EUR 25,000 and EUR 50,000 depending on specialization and seniority.

These figures represent gross annual salary and do not include employer contributions. For a full picture of what a hire will cost your business, the total employment cost is always higher than the gross salary figure alone.

How does the 13th and 14th month salary affect offer design?

Portugal, like Spain, operates a 14-payment salary structure for many employees. This means the annual salary is divided across 14 installments rather than 12, with two additional payments typically made in June and December.

This is not a bonus on top of the agreed salary. It is the same annual amount delivered differently. The two extra payments are traditionally aligned with the summer holiday period and Christmas.

For employers used to a 12-month salary model, this can cause real confusion when presenting offers. If a candidate is told their salary is EUR 24,000 per annum, they will expect two extra monthly payments during the year, each worth roughly EUR 1,714. Employers who present a monthly figure without accounting for this risk misaligned expectations before the employee has even started.

Employers should make the payment structure explicit in any offer letter and employment contract. In some cases, the value of the 13th and 14th payments can be prorated across 12 monthly payslips. Either approach is valid, but it must be documented correctly and agreed upfront.

What employer costs should be budgeted on top of salary?

The gross salary figure is only part of the total cost of employment in Portugal. Employers must also budget for statutory contributions on top of every salary payment.

Employer contributions in Portugal currently include:

• Social Security (Segurança Social): 22.3% to 23.75% of gross salary
• Accident Insurance (Seguro de Acidentes de Trabalho): approximately 1.75% of gross salary

In total, employers should budget an additional 25% to 26.5% on top of gross salary. For a practical example: an employee on a gross annual salary of EUR 25,000 would cost an employer approximately EUR 31,250 to EUR 31,625 per year before any additional benefits are factored in.

These contributions are mandatory and apply to all employees regardless of sector or contract type. They must be calculated correctly and remitted monthly to the Portuguese authorities.

Our payroll guide for Portugal covers contribution rates, payment frequency, and the full breakdown of what must appear on every payslip.

What additional benefits do employers typically offer in Portugal?

Beyond the statutory minimum, candidates in Portugal commonly expect a range of additional benefits. These are not legally required but are standard enough that omitting them can put employers at a competitive disadvantage when recruiting.

Common additional benefits include:

• Meal vouchers: widely expected, typically valued at EUR 9 to EUR 10 per working day.
• Public transport allowance: particularly common in Lisbon and Porto.
• Supplementary health insurance: the public healthcare system covers all residents, but private health cover is a common employer-funded benefit.
• Supplementary pension contributions: increasingly common among international businesses.
• Flexible working arrangements: highly valued, particularly for technology and knowledge-economy roles.

Employers should factor the cost of these benefits into total employment budgets before making hiring decisions.

What else affects the total cost of hiring in Portugal?

Beyond salary, contributions, and benefits, employers should also plan for:

• 22 days of paid annual leave per year plus public holidays.
• Maternity and paternity leave obligations, which affect workforce planning and cost.
• Severance costs if employment ends, capped at a maximum of 52 weeks of base salary.
• Probation periods of up to 240 days for senior roles, during which termination notice requirements differ.

How do contract type and working hours affect salary in Portugal?

Not all employment in Portugal is structured the same way, and contract type affects both how salary is calculated and what obligations the employer carries.

The standard arrangement is a full-time permanent contract (contrato sem termo), covering 40 hours per week with the full salary and benefits package. Part-time contracts are permitted and are calculated proportionally. Employer contributions apply on the same proportional basis.

Fixed-term contracts (contratos a termo) are permitted for project-based or temporary needs, but Portuguese law limits their use and duration. Repeated renewal can result in a fixed-term contract being treated as permanent by law. Employers should take legal advice before structuring roles on this basis.

It is also worth noting that Portuguese law distinguishes clearly between employees and independent contractors. Misclassifying an employee as a contractor exposes the business to significant back-payment liability for social security contributions, tax, and statutory entitlements. If the working relationship has the characteristics of employment, it should be structured as employment.

Are salaries in Portugal rising?

Portugal has seen consistent upward pressure on salaries in recent years, driven by minimum wage increases, skills shortages in technology and professional services, and growing competition from international employers hiring Portuguese workers remotely.

The national minimum wage has risen from EUR 665 per month in 2019 to EUR 957 in 2024, with further increases expected. An offer that looks competitive today may need reviewing within 12 to 18 months. Employers should build an annual salary review process into employment contracts from the outset to manage expectations clearly and retain the flexibility to adjust compensation in line with the market.

Technology sector salaries in particular have risen rapidly in Lisbon, where demand from both domestic and international employers has pushed compensation benchmarks higher. Employers hiring in this space should expect to compete on salary, benefits, and flexibility rather than relying on Portugal's lower cost base alone.

How does Portugal compare to other Western European markets?

Portugal is generally more cost-effective than markets like Germany, the Netherlands, or France when it comes to average salaries and total employment costs. It is broadly comparable with Spain, though regional variation in both countries means direct comparison is not always straightforward.

For businesses considering expansion in Europe, Portugal offers a strong combination of English-language proficiency, a skilled workforce, timezone alignment with the UK and Western Europe, and lower employment costs relative to larger markets. These factors make it an increasingly common destination for international hires across technology, finance, customer operations, and professional services.

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