Friday, March 1, 2024

Portugal’s Minimum Wage & Average Salaries – Portugalist

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In 2024, Portugal set its minimum wage at €820 per month, a figure that reflects annual adjustments based on the cost of living, national productivity, and governmental fiscal policies. Despite this, the average wage in Portugal stands at €1,463 as of February 2024, according to RTP.pt, underscoring a disparity with the cost of living that has notably risen over recent years.

Particularly in Lisbon, the rental market is so tight that finding an apartment for under €1,000 a month is becoming increasingly difficult. This economic pressure has led to a trend where many individuals, especially the younger demographic, opt to live with their parents or in shared housing situations, sometimes even sharing space with other couples.

Portugal’s minimum wage ranks among the lowest in Europe, contributing to a trend where the country is less seen as a destination for employment opportunities, especially for the younger generation. This has led to a significant rate of youth migration, with many seeking better-paying opportunities abroad.

However, it’s not all bleak. Certain sectors, such as technology, energy, financial services, and insurance, offer competitive salaries that can compare with those in other countries. But generally, the wage levels across the board tend to be lower, and job opportunities can be scarce, particularly for those who do not speak Portuguese. Many expatriates find themselves working in call centers or for international companies where language barriers are less of an issue.

Given these economic conditions, Portugal has become a more attractive destination for retirees and remote workers rather than those seeking traditional employment.

The country’s digital nomad visa is an appealing option for those that don’t hold an EU/EEA/Swiss passport who have the flexibility to work remotely, allowing them to take advantage of Portugal’s quality of life while earning from economies with stronger currencies.

About the Minimum Wage

Portugal’s approach to setting the minimum wage involves a tripartite committee consisting of government ministers, trade organization representatives, and union leaders. This committee convenes annually to negotiate the minimum wage, often reaching a compromise that reflects the diverse interests of these groups.

The country has three minimum wage rates: a national rate, and slightly different rates for the Azores and Madeira, reflecting the varied cost of living across these regions. It’s important to note that Portugal calculates the minimum salary based on 14 payments per year, rather than the standard 12, which includes additional payments for holidays and summer.

Despite the low minimum wage, Portugal enforces strict penalties for non-compliance, underscoring the government’s commitment to protecting workers’ rights. Employers found violating minimum wage laws face significant fines, emphasising the importance of adherence to labour standards.

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