How much severance pay you get in Portugal

In short: In Portugal, how much severance you get depends almost entirely on why you were let go. A valid dismissal for misconduct pays nothing; the three economic dismissals pay a statutory compensação of 14 days of base salary and seniority payments per complete year of service (art. 366 of the Código do Trabalho). That figure is capped — the countable salary at 20× the minimum wage and the total at 12 months' pay — and it comes with a notice period of 15 to 75 days by seniority. CourtStairs answers Portuguese and EU employment questions like these in plain language, with citations to the Diário da República you can check yourself.

If you have just been dismissed and want to know the number, the honest answer is: it is arithmetic, but the arithmetic starts with the type of dismissal. This post maps each type to its formula, works the caps with 2026 figures, and lays out the notice brackets — for expats and Portuguese readers alike.

Which dismissals in Portugal pay severance?

Only economic dismissals pay statutory severance; a valid dismissal for misconduct pays nothing. Portuguese law is not "at-will". Under art. 53 of the Constitution you cannot be dismissed without just cause, so every dismissal (despedimento) has to fit one of four legal forms — and only three of them carry a payout. The dividing line is disciplinary versus economic.

Note what is not on this list. If your fixed-term contract simply expires (caducidade) there is a separate, smaller compensation regime. If you resign (denúncia), you get nothing — unless you quit with just cause because the employer breached the contract (resolução), which can trigger compensation. And a dismissal by mutual agreement (revogação) pays whatever the two sides negotiate.

How is severance calculated in Portugal?

Severance equals 14 days of base salary and seniority payments for each complete year of service — daily rate (monthly base ÷ 30) × 14 × full years, plus a proportional slice for part-years. Since the Agenda do Trabalho Digno (Lei n.º 13/2023, in force 1 May 2023) the standard rate is 14 days of base salary and seniority payments (diuturnidades) for each complete year of service, with a proportional slice for any leftover months. Here is how art. 366 builds the number.

1. Find the daily rateDivide your monthly base salary plus diuturnidades by 30. On €1,200, that is €40 a day.
2. Multiply by 1414 × €40 = €560 of severance for each complete year of service.
3. Multiply by full yearsAfter 5 complete years: 5 × €560 = €2,800.
4. Add the part-yearA fraction of a year is paid proportionally — e.g. 6 extra months adds about half of €560, roughly €280.
5. Apply the capsCheck the salary ceiling and the total ceiling below before finalising.

So on a €1,200 base salary, five and a half years of service comes to roughly €3,080. The formula is deliberately mechanical — what makes real cases messy is the caps and the older-contract rates.

Is there a maximum severance payment in Portugal?

Yes — two caps apply: the countable monthly salary is limited to 20× the minimum wage, and the total payout to 12 months' pay (or 240× the minimum wage when the salary cap bites). Art. 366 puts two ceilings on the payout, and they can bite hard for higher earners or very long service:

• Salary cap. The monthly base salary and diuturnidades fed into the formula cannot exceed 20 times the RMMG. With the 2026 minimum wage at €920 (Decreto-Lei n.º 139/2025), that is €18,400. Earn more, and only €18,400 counts per month.
• Total cap. The whole compensation cannot exceed 12 times your monthly base salary and diuturnidades — or, when the salary cap above applies, 240 times the RMMG, which is €220,800 in 2026.

In plain terms: severance can never be worth more than one year's pay (up to a hard mainland ceiling of about €220,800), no matter how long you stayed. For most workers on ordinary salaries the caps never come into play; for senior staff with decades of service, they can shave a large chunk off the "14 days × years" headline.

Do older contracts get more than 14 days per year?

Yes — service earned before the 2023 reform keeps its higher rate (up to 30 days per year for the oldest contracts), so long-tenured workers are calculated in segments. The flat 14-day rate is recent. Service built up under earlier versions of the law keeps its old, higher rate, so a long-tenured worker is calculated in segments:

If your employment predates the 2011–2013 reforms, do not just multiply 14 by your total years — that under-counts. The DGERT and official simulators break the sum into periods, each at the rate in force when that slice of service was earned.

How much notice must an employer give before dismissal?

For economic dismissals, notice runs from 15 days (under one year of service) up to 75 days (ten years or more); a valid misconduct dismissal has no notice. Economic dismissals also require advance written notice (aviso prévio). The length scales with seniority under art. 363, and the same brackets carry over to elimination of the post and unsuitability. A misconduct dismissal has no notice — it ends the contract on disciplinary grounds.

During the notice period you keep working and being paid. If the employer cuts the notice short, it must pay the salary for the missing days. Collective agreements (contratos coletivos) can set longer periods, so check yours.

What should you check before signing a severance offer?

Confirm the dismissal type and ground, redo the arithmetic yourself, split any pre-2013 service into segments, and verify the notice period — then get advice before you sign, because deadlines to challenge are short.

1. Name the type. Misconduct (nothing) or economic (14 days per year)? The employer's written decision should say which ground it relies on.
2. Do the arithmetic. Daily rate = monthly base ÷ 30; multiply by 14, by full years, add the part-year — then test the caps.
3. Split old service. If you started before 2013, calculate in segments at the old rates, not a flat 14 days.
4. Confirm the notice. Match your seniority to the 15/30/60/75-day brackets, and count unpaid notice days as extra owed.

This is exactly the kind of question CourtStairs is built for: a plain-language answer with each figure tied to the article of the Código do Trabalho, Lei 13/2023, or the DGERT guidance it rests on, so you can open the Diário da República and read the provision yourself. It works in English and Portuguese and has a free tier.

This is general information, not legal advice. Amounts, caps and the minimum wage change each year, transitional rules are technical, and collective agreements can vary the defaults — so confirm anything important against the primary source or a lawyer before you act.