Severance Pay Calculator 2026: Portugal (Indemnização)

You work out the value of one day of pay, (base salary + seniority allowances) ÷ 30, and multiply it by the compensation days you are entitled to. The current rate is 14 days for each year of seniority (since 1 May 2023). For older contracts, each period of service counts at the rate then in force (30, 20, 12 or 14 days a year), with the fraction of a year proportional.

It depends on when you worked. Since 1 May 2023 it is 14 days of base pay and allowances a year. Before that: 12 days a year from October 2013 to April 2023, 20 days from November 2012 to September 2013, and 30 days (one month) until October 2012. That is why an older contract adds up several periods at different rates.

It covers dismissals through no fault of the worker on an open-ended contract: collective dismissal, abolition of the post and dismissal for unsuitability, which share the same formula (art. 366.º). It does not cover fixed-term contracts (which have their own rates), termination with cause by the worker (15 to 45 days a year, set by the court), dismissal for cause attributable to the worker (no compensation) or termination by mutual agreement (negotiated).

It is not subject to Social Security. For IRS it is exempt up to a limit: the average pay of the last 12 months multiplied by the years of seniority. Only the part above that limit is taxed. There are specific rules, for example, for people who return to work for the same company in the following years. The calculator shows the gross amount.

The three-month minimum stopped applying to compensation generally with the 2012 changes. It may still matter for slices of very old contracts, but in those cases the accumulated seniority already far exceeds that minimum. So this calculator does not apply a three-month floor. Check old situations with the ACT.

Compensation for a fixed-term contract reaching its end is 24 days of base pay and seniority allowances for each complete year of service, worked out under article 366 (article 344(2) for a certain term and article 345(4) for an uncertain term). That is more days per year than the 14 of an open-ended contract. Watch out for the outdated figure: it was 18 days until 30 April 2023 and Lei n.º 13/2023 raised it to 24, but many sites still publish 18. No compensation is due if it is the worker who declares they do not want the renewal.

Then the formula in this calculator does not apply. If a court rules the dismissal unlawful, the worker is entitled to reinstatement or, if they prefer, to compensation instead, which the court sets at between 15 and 45 days of base pay and allowances for each complete year or fraction of service, having regard to the level of pay and the seriousness of the unlawfulness, and which can never be lower than three months of pay (article 391). The pay falling due between the dismissal and the final judgment is added on top. Because the exact amount depends on the court ruling, it cannot be computed in advance.

The final settlement includes, on top of the compensation, the holiday pay and holiday bonus for holiday accrued but not taken, the proportional holiday pay, holiday bonus and Christmas bonus for the time worked in the year the contract ends (articles 245 and 263), the salary for the days worked in the final month and, if the employer does not honour the notice period, the pay for the missing days. This calculator estimates the compensation only; the proportional amounts can be estimated in the holiday and Christmas bonus calculator.

The per-period rates (30/20/12/14 days a year), the art. 366.º caps (20× and 12×/240× the minimum wage) and the €920 minimum wage are official for 2026. The result is an educational estimate: it works monthly, does not compute the IRS on the taxable part or special cases (fixed-term, cause). Always confirm with the ACT, your collective agreement or a lawyer.