Can my employer reduce my salary in Portugal? (2026)

No. As a rule, your employer cannot reduce your salary. Art. 129(1)(d) of the Labour Code prohibits it, except in the cases provided for in the Code itself or in a collective agreement (the sector's collective labour contract). If the employer does it outside those cases, it commits a very serious administrative offence (paragraph 3).

An example: the €100 cut

Miguel is a receptionist at a hotel in Faro. His base salary is €1,200. In September, the employer tells him that "the season went badly" and that from October he will be paid €1,100.

This is illegal. "The season went badly" is not one of the exceptions in the law. The employer still owes him €1,200 a month. The €100 missing from each payslip is a debt, with late payment interest (Art. 323(2)).

If the company really is in crisis, the law gives it its own route: the lay-off (Art. 298). It has rules, deadlines and a guaranteed minimum for the worker. Cutting the salary on its own initiative is not one of those routes.

Check your take-home pay with the net salary calculator.

What counts as pay (and what can change)

The law protects pay (what you receive in exchange for your work). It is not only the base salary. It also includes other regular and periodic payments, in cash or in kind (Art. 258(2)). And there is a rule in your favour: any payment from the employer is presumed to be pay (Art. 258(3)). It is up to the employer to prove otherwise.

Art. 260 says what, as a rule, is not pay:

[Depende do caso:] a bonus paid every month, for years, always the same, may have become pay through custom (Art. 260(3)(a)). In that case, it cannot be cut. Gather your payslips from recent years. They are your best evidence. See how to read your payslip.

When your salary can legally go down

These are the main cases provided for in the law. Each has its own rules.

1. Lay-off (company crisis). The employer can temporarily reduce working hours or suspend contracts for market, structural or technological reasons or disasters, if this is essential to keep the company viable (Art. 298(1)). You are entitled to at least two thirds of your normal gross pay, or the minimum wage for your working hours, whichever is higher (Art. 305(1)(a)). Example: someone earning €1,800 gross cannot receive less than €1,200. This minimum has a ceiling, three times the minimum wage (paragraph 3). The compensation is paid 30% by the employer and 70% by Social Security (paragraph 4). See the lay-off guide.

2. Moving to part time. You can move from full time to part time, permanently or for a period, by written agreement (Art. 155(1)). Your pay becomes proportional to your hours (Art. 154(3)(a)). If you change your mind, you can cancel the agreement in writing up to the 7th day after signing (Art. 155(2)), unless the signatures were notarised in person (paragraph 3).

3. Lower category. Only with your agreement, for a pressing need of yours or of the company, and with ACT authorisation if your pay goes down (Art. 119). Outside these conditions, it is prohibited (Art. 129(1)(e)).

4. Pre-retirement. From age 55, by agreement with the employer, your work can be reduced or suspended. During that time, you receive a monthly payment from the employer, the pre-retirement payment (Art. 318).

5. Collective agreement. Art. 129(1)(d) allows the cases provided for in a collective labour regulation instrument. [Depende do caso:] check what your sector's collective agreement says.

What if they ask you to sign a paper accepting lower pay? Point (d) does not mention agreement. Point (f), on changing your workplace, expressly allows the case "where there is agreement". [Interpretação corrente:] so an agreement to cut pay outside the cases above is highly questionable. Do not sign under pressure. The employer also cannot pressure you into accepting worse conditions (Art. 129(1)(c)).

Deductions from your salary: the one sixth limit

A pay cut can also come disguised as a "deduction". The rule is clear: the employer cannot deduct from your salary or offset it against debts you owe (Art. 279(1)).

The exceptions are in paragraph 2:

• taxes, Social Security and other deductions ordered by law or by a court (point (a));
• compensation you owe the employer, set by a court or a conciliation record (point (b));
• a disciplinary fine (point (c));
• instalments on a loan the employer gave you (point (d));
• meals, phone, fuel or goods you asked for, or expenses paid with your agreement (point (e));
• salary advances (point (f)).

Apart from point (a), these deductions cannot exceed, in total, one sixth of your pay (paragraph 3). On €1,200, the maximum is €200 a month. Deducting on its own initiative for something you broke, without a court decision or conciliation record (point (b)), a shortfall in the till or "just because" is not on the list. Doing so is a very serious administrative offence (paragraph 5).

What to do if your salary was cut

1. Ask for the explanation in writing. Ask which rule of the Code or the collective agreement the cut is based on.
2. Do not sign anything until you understand what you are accepting.
3. Keep evidence: contract, payslips from before and after, emails, messages.
4. Complain to the ACT. See how to file a complaint with the ACT.
5. Claim the differences. Every month paid short is a debt, with late payment interest (Art. 323(2)). You have up to one year from the day after the contract ends to claim them (Art. 337(1)).
6. If you want to leave, you can resign with just cause. [Interpretação corrente:] cutting pay with no legal basis is a culpable breach of a legal guarantee (Art. 394(2)(b)). You give notice in writing, stating the facts, within 30 days of learning of them (Art. 395(1)).

With just cause, you are entitled to compensation of between 15 and 45 days of base pay and seniority payments for each full year of service, and never less than 3 months (Art. 396(1)). Miguel, with 6 years at the company and a €1,200 base salary, would get between €3,600 (15 days per year) and €10,800 (45 days per year). The figures use one day equal to €1,200 ÷ 30 = €40. The court sets the amount according to how serious the breach is. Run the numbers in the severance calculator and see the guide on resigning with just cause.

Did your duties change and your pay with them? See the guide on change of duties and category.

For employers: you cannot reduce a worker's salary by your own decision, even if the company is struggling (Art. 129(1)(d)). If the crisis is real, the legal route is the lay-off (Art. 298), with the minimum of two thirds of normal gross pay (Art. 305(1)(a)). Reductions by agreement only in the cases provided for in the law, such as part time by written agreement (Art. 155), a lower category with ACT authorisation (Art. 119) or pre-retirement (Art. 318). An unlawful cut is a very serious administrative offence and may give the worker just cause to leave with compensation (Arts. 394 and 396).

This guide explains the law in plain language and does not replace legal advice for complex or disputed cases.