[Updated Feb. 1, 2023] Mandatory employee benefits in Portugal include workers’ compensation, holiday pay, and meal allowances. Supplementary employee benefits in Portugal include company cars, meal allowance cards, childcare vouchers, voluntary benefits, flexible benefits, workplace canteens, bike to work, and gymnasiums.

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Mandatory employee benefits in Portugal

Workers Compensation Insurance

All employees are covered for accidents at work, including “in-itinere” (on the road), through insurance coverage. There is no waiting period, and the bases for assessing benefits are:

  • For temporary or partial disability greater than 30% – 70% of the value corresponding to the decrease in earnings capacity.
  • For temporary total disability – 70% of the gross pensionable salary up to 12 months, then 75%.
  • In the case of permanent and absolute disability – 80% of the gross pensionable salary.
  • In case of death – 30% of the gross pensionable salary. If it is a spouse or orphan, 20% for one descendant, 40% for two, 50% for three or more.

The payable benefits include:

  • Temporary Disability – 70% of the decrease in earnings capacity for the duration of the disability up to a limit of 12 months; 75% from 12 months.
  • Permanent Disability – 80% of gross earnings for total disability. Medical treatment, surgery, hospitalization, medicines, appliances, and transport are provided for both temporary and permanent disability.
  • Partial Disability – Percentage of the full pension, corresponding to the degree of incapacity. If the disability is below 30%, the amount is converted into a lump sum.
  • Spouse’s Pension – 30% of gross earnings for spouse/former spouse. The benefit terminates upon remarriage with a lump sum payment of three times the annual pension. After the age of 65, or in the event of physical or mental disease which affects the ability to work, the above rate is raised to 40%.
  • Orphan’s Pension – 20% of gross earnings for one child, 40% for two children, and 50% for three or more children. If both parents are deceased, the rates are doubled, but the total maximum pension is fixed at 80% of gross earnings.
  • Funeral Grant – Lump sum payment corresponding to the effective funeral expenses, up to a maximum of four times the minimum salary.

Holiday Pay

All workers are legally entitled to 22 paid holidays per year. In some cases, there are collective labor agreements that establish a higher period of paid holidays (typically 25 days).

Meal Allowance

Employers must pay employees a meal allowance for each workday. This allowance is fully taxable unless it is paid through a card or ticket, which makes these taxes exempt up to a certain limit.


Supplementary employee benefits in Portugal

Company Cars

A small number of employees can be provided with company-financed cars and/or fuel, or an allowance in lieu. In a work environment where employees travel on business, you may see either company cars provided or a car allowance paid.

Meal Allowance Cards

This is a very common benefit due to its tax advantages to both the employee and the employer (tax-free up to €9.60 per day).

Childcare Vouchers

Childcare vouchers are a tax-efficient benefit, and various suppliers are available to administer these schemes

Voluntary Benefits

Large and mid-sized employers will often provide employees with a range of voluntary benefits that can be provided at discounted prices through the employer.

Flexible Benefits

Employees can select several types of benefits from a menu, most of them being tax-efficient.

Work from Home

An increasing number of employers were already creating working models that included the possibility of employees working from home, particularly in the technology sector. As a consequence of the COVID-19 pandemic, this trend grew exponentially, and now the vast majority of functions that can be performed that way are.

Workplace Canteens

This benefit is common with larger employers and particularly in industrial facilities. Food is provided at a discounted rate and can include breakfast and lunch.

Bike to Work

The Bike to Work benefit is a state subsidy to encourage commuting by bicycle and allows employees to purchase an urban electric bike with support from the government of 50% of its cost, up to a limit of € 500 (for electric bikes).


Large employers can provide ‘gym on-site’ facilities, whereas smaller employers may offer gym subsidies or access to a gym with lower corporate rates.

This information about employee benefits in Portugal is provided by VISAVIS, Asinta’s employee benefits consulting Partner in Portugal.

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