Skip to content
Calculadora Capital

Severance Pay Calculator 2026: Portugal (Indemnização)

When you are dismissed through no fault of your own on an open-ended contract, collective dismissal, abolition of your post or unsuitability, you are entitled to compensation. The amount depends on your pay and seniority, but the rate per year of service has changed over time, so each period counts at the rate then in force. Enter your monthly base salary, any seniority allowances and the contract dates to estimate the 2026 compensation.

Use the monthly base pay and any seniority allowances. The dates split your seniority across the periods with different rates (30/20/12/14 days a year).

Estimated compensation
€10,116.67
Seniority: 8 years and 5 months · 101.17 days of pay
Service periodDaysAmount
Oct 2013 to Apr 2023: 12 days/year100€10,000.00
Since May 2023: 14 days/year1.17€116.67
Value of one day (pay ÷ 30)€100.00
Total compensation101.17€10,116.67

Estimate for a dismissal through no fault of the worker on an open-ended contract (collective dismissal, abolition of the post or unsuitability). It shows the gross amount: severance is not subject to Social Security and is partly IRS-exempt, as explained in the article.

Educational estimate, not advice. The per-period rates (30/20/12/14 days/year), the art. 366.º caps and the €920 minimum wage are official for 2026. It does not cover fixed-term contracts or dismissal for cause. Always confirm with the ACT or a lawyer.

Video: how to use the calculator

The current rule: 14 days a year

Since 1 May 2023 (Lei n.º 13/2023, the Agenda do Trabalho Digno), the compensation is 14 days of base pay plus seniority allowances for each complete year of seniority, with the fraction of a year worked out proportionally. A day of pay is worth (base salary + allowances) ÷ 30. For a contract that started after that date, this is the only rate that applies.

The transitional regime: each period at its rate

For older contracts the yearly rate changed several times, so the calculation adds up the service in each period at the rate then in force: until 31 October 2012, 30 days a year (one month); from 1 November 2012 to 30 September 2013, 20 days; from 1 October 2013 to 30 April 2023, 12 days; and since 1 May 2023, 14 days. The calculator splits your seniority across these periods automatically from the contract dates.

The legal caps

Article 366.º sets two ceilings. First, the base pay plus allowances used in the calculation cannot exceed 20 times the minimum wage (20 × €920 = €18,400 in 2026). Second, the total cannot exceed 12 times the monthly pay, or 240 times the minimum wage when the first ceiling applies. In practice only very high salaries or very long tenures reach these limits.

Tax: Social Security and IRS

Severance pay 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 (with specific rules for people who go back to work for the same employer). So the calculator shows the gross compensation and the article explains the exemption, which is not computed here.

Worked example

Take an open-ended contract that started in January 2015 and ended, through abolition of the post, in May 2023, with a base salary of €3,000. A day of pay is worth €3,000 ÷ 30 = €100. The service between October 2013 and April 2023 (100 months) counts at 12 days a year: 100 ÷ 12 × 12 = 100 days. The month of May 2023 already counts at 14 days a year: 1 ÷ 12 × 14 = 1.17 days. In total that is 101.17 days × €100 = €10,117 of compensation. As the salary and seniority are well below the ceilings, no cap applies.

Frequently asked questions

How is severance pay calculated in Portugal in 2026?
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.
How many days of pay do I get per year worked?
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.
Which dismissals does this calculator cover?
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).
Is severance pay taxed?
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.
Is there a three-month minimum?
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.
Are the figures exact?
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.

Related calculators & reading

Sources

Author: Thorben Rasmus Idel · Reviewed by: Nahar Geva · Last reviewed: 2026-06-02