Holiday and Christmas pay in Portugal: how the subsídios work in 2026

Two subsídios a year

In Portugal, on top of your 12 months of salary, the law gives you two extra payments a year:

• the holiday subsidy (subsídio de férias, Código do Trabalho art. 264.º²), normally paid before you take your holidays;
• the Christmas subsidy (subsídio de Natal, art. 263.º¹), which must be paid by 15 December each year.

Each equals one month of retribution when you work the full civil year. That is why people say that in Portugal you receive the equivalent of 14 months of salary: the 12 normal months plus the two subsídios.

What counts as "one month of retribution"

The subsídio is not only your base salary. It includes the base retribution plus the regular, periodic payments that are a counterpart to the specific way the work is performed, for example, diuturnidades (seniority payments)². Variable or one-off amounts (such as expense allowances) generally do not count. If you are unsure what is included, your payslip and your sector's collective agreement are the best guide.

Mid-year, the subsídio is proportional

You don't always work the full civil year. In the year you are hired, the year the contract ends, or if the contract was suspended for a reason of your own, each subsídio is proportional to the time of service in that civil year¹.

The simplest way to calculate it is the twelfths (duodécimos) rule:

Subsídio = monthly salary × (months of service in the year ÷ 12)

With 6 months of service, each subsídio is worth half a month of salary. With 3 months, a quarter. Run the numbers with your own figures in the holiday and Christmas pay calculator.

Worked example

Take a salary of €1,000 a month:

• Full year: the holiday subsidy is €1,000 and the Christmas one €1,000, a gross total of €2,000. Social Security takes 11% (€220), leaving €1,780 before IRS.
• 6 months of service: each subsídio is €1,000 × 6 ÷ 12 = €500, i.e. €1,000 gross in total (€880 before IRS).

The subsídios are subject to Social Security and IRS

The holiday and Christmas subsídios are remuneration and count for deductions³:

• Social Security: the standard rate of 11% on the employee applies.
• IRS: the subsídios are subject to income tax. The withholding depends on your monthly rate; the final tax is settled in the annual return, where the subsídios add to the year's income.

So the amount you actually receive is lower than the gross. To see the effect on a given month's salary, use the net salary calculator.

Being paid in twelfths: does it change anything?

Many employers pay the subsídios in twelfths (duodécimos), instead of a single lump sum, they add one twelfth of each subsídio to your salary every month. The annual total is exactly the same; only when you receive it changes. There may even be options to pay 0%, 50% or 100% in twelfths, but the annual amount you are entitled to does not change.

What this guide does not cover

To be an honest estimate, some points are out of scope:

• The strict rule is by days of service; here we use whole months, which is simpler to calculate.
• In the year you are hired, holidays follow a specific accrual rule (art. 239.º), so the holiday subsidy in that first year can differ.
• The exact IRS withheld, which depends on your monthly withholding rate.
• More favourable collective-agreement (IRCT) rules, which may change what is included.

To understand what you take home from your base salary, see how net salary is calculated.