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Rui Guedes de Quinhones

EOR and Employment Specialist

Dec 22, 2023

Working in Portugal: Culture, Salaries, Industries, Income Tax

Living in Portugal has much to offer, such as gorgeous beaches, natural landscapes, sunny days most of the year, and friendly people. But what is it like working in Portugal? Are salaries competitive? What kind of industries are there in Portugal? What is the work life balance situation? What are taxes like? Let’s find out below.

Working in Portugal: What Kind of Salary Can You Expect?

One of the advantages of moving to Portugal is the lower cost of living  compared to other western European countries. But that means that the salaries are also going to be lower. The minimum wage in Portugal is €760 per month in 2023, and  an average Portuguese yearly gross income was approximately 19,212 USD (19,734€) in 2021/22. That is well below the US average of $54,000 USD (55,478€).

How does this compare to your cost of living in the US? If your cost of living in the US was, say, $50,000, it would be approximately 40% lower in Portugal, around $20,000.

Moreover, healthcare is practically free in Portugal once you are a resident. Even temporary residency qualifies you for public healthcare. Private health insurance is also more affordable, with comprehensive packages costing around 80 euros per month per person. However, realistically speaking, an average salary in Portugal is insufficient for the rising cost of living. With inflation and other issues, rental prices are on the rise, consumer goods and services are not as cheap as they used to be, and all of this can make it hard to survive on an average salary in Portugal, let alone the minimum wage.

Portugal Salary per Hour

The minimum hourly wage is approximately in Portugal 5.14€ per hour including the 2 extra months salary (more on that below). However, freelancers in Portugal usually charge between 20-40€ per hour, depending on the industry and task.

A graphic showing the minimum hourly wage in Portugal

Highest Salary in Portugal

The highest-paid jobs in Portugal are usually director positions at large organizations or international companies, which occasionally reach six figures. For entrepreneurs, the sky's the limit regarding compensation.

Portugal Salary Range

A gross salary in Portugal ranges from €760 (minimum salary) to €3594, with the average gross salary being €1369.34. Taxes depend on a few factors, such as the household income and whether the individual lives on continental Portugal or the islands of Madeira and Azores.

Vacation and Christmas bonuses

In Portugal, it is mandatory by law to pay 2 extra months of salaries, which are usually referred to as the 13th and 14th month, or vacation and Christmas bonuses. The vacation salary is usually paid out in the summer, either in July or August, while the Christmas bonus is paid in December. It is also the employee’s right to ask that the 2 extra months be spread out over the year and be paid monthly.

Industries in Portugal

While there are multiple rising sectors in Portugal, such as tourism, tech, customer service, and startups, the main industries are food, metal, and textiles.

Food industry

The food industry is one of the biggest industries in Portugal. A research from 2021 counted more than 67 thousand companies working in this sector. Portugal has a population of over 10 million people and has also extensive agriculture production, as well as cattle farming. From north to south, and also on the islands of Azores and Madeira, the soil is fertile, making it perfect for agriculture.

Metal products

With almost 12 thousand metal companies, this is a big sector too. Spread mostly around the coast of the Lisbon area, this industry manufactures important tools to allow big machines to work.


With over 9 thousand companies working in this sector, the textile industry is one of the most important sectors in Portugal. Production works with different types of fabrics, and this industry has proeminence mainly in the north of the country (around 76% of the entire production).

Work Culture and Work Life Balance in Portugal

Portugal has a somewhat hierarchical work culture where the team leads and managers hold all the decision making powers. Additionally, remote working was never an option until the covid pandemic, and now most companies offer a hybrid situation rather than fully remote.

Work life balance tends to be poor, as people tend to stay late at the office, although this depends on the company and managerial styles. While the work culture in Portugal is changing slowly with the rise of startups and a more open, modern mindset, many companies still operate like pre-pandemic times.

Portugal Income Tax

In Portugal, there are two types of taxes: direct taxes (directly applied on the income, such as IRS and IRC) and indirect taxes (charged in the price of products or services, such as VAT and ISP). Direct taxes always depend on the salary: the higher the salary is, the higher the tax is. You can find more information here, including how VAT varies. In order to calculate your salary after taxes – which will vary according to where you live (continent or islands) and number of kids –, you can use this simulator.

In an effort to attract higher-income individuals to Portugal, the government created a special tax incentive in 2009 called the Non-Habitual Resident Status (NHR). To qualify for the NHR, you must be registered as a tax resident in Portugal, and must not have been a tax resident here during the previous 5 years. Additionally, you must have a  profession that is deemed of “high value” to the country. The NHR allows you to benefit from a flat income tax rate of 20%.

Income from pensions benefit from a flat rate of 10%, and some types of income may even be exempt from taxation in Portugal, if they are taxed abroad or have the potential to be taxed abroad.

If you’re not part of the NHR regime, you will be taxed according to the relevant tax brackets.

Final Thoughts: Working in Portugal

When it comes to moving to an entirely new country, it really helps to have people on the ground who know the rules and laws. This is where our staff at Moviinn comes in. We are here to help with anything you might need, from relocation, looking for schools, dealing with visas, etc. We have helped over a thousand businesses and individuals  move to Portugal with  a successful transition.

For more information on living and working in Portugal, contact us today.

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