Severance pay calculator — Portugal 2026

How severance pay works in Portugal

Severance (compensação por cessação) depends on the reason for termination. There are three legal paths, each with different formulas:

1. Objective dismissal (Art. 366)

Covers collective dismissal, abolition of the job position (extinção do posto de trabalho) and worker unfitness (inadaptação). Since 01/05/2023, the rate is 14 days of base salary per year of service. Contracts signed before that date keep 12 days/year for the service period before 01/05/2023.

2. End of fixed-term contract (Art. 344)

When a fixed-term or uncertain-term contract ends by employer initiative, you are entitled to 24 days per year since 01/05/2023 (Law 13/2023). Earlier service uses 18 days/year.

3. Unfair dismissal (Art. 391)

If a court declares the dismissal unlawful and you opt for compensation instead of reinstatement, the judge sets a value between 15 and 45 days per year, with a legal minimum of 3 months’ salary.

Statutory caps

• Salary cap: only the part up to 20 × national minimum wage (€18,400 in 2026) counts.
• Total cap: severance cannot exceed 12 × monthly base salary + seniority bonus.
• Both caps apply only to objective dismissal and end of fixed-term contracts, not to unfair dismissal.

What counts as base salary

Only your monthly base salary plus seniority bonus (diuturnidades). Excludes meal allowance, commissions, overtime pay, performance bonuses or any variable component.

Worker resigning: severance or not?

If you resign on your own initiative (Art. 400), there is no severance. The exception is resignation with just cause (Art. 394) — for example, unpaid salary for 60 days or workplace bullying — which entitles you to a severance computed under Art. 396 (15-45 days per year, minimum 3 months).