Holiday allowance in Portugal 2026: how much and when it is paid

The holiday allowance in Portugal is an extra month of pay, given to you before you go on holiday. It is not the same as your holiday pay: they are two separate payments that land in the same month.

This guide shows how much you get in 2026, when, what the calculation base is (which is not the same as the Christmas bonus), and who pays your share if you were on sick leave.

What the holiday allowance is (Art. 264)

Holidays vest on 1 January each year, based on the previous year of work (Art. 237 paragraph 1). Someone who worked the whole year is entitled to 22 working days of holiday (Art. 238 paragraph 1).

When you take those holidays, you receive two things, and this is what confuses most people:

• Holiday pay (Art. 264 paragraph 1) is your normal salary. You do not lose salary by going on holiday. You are paid as if you were working.
• Holiday allowance (Art. 264 paragraph 2) is an extra amount, on top of the salary. This is the "allowance".

In other words: in the holiday month you receive the salary and the allowance. They are two amounts added together, not one.

How much you get: the calculation base (Art. 264 paragraph 2)

Here is the part almost no one knows, and it is what sets the holiday allowance apart from the Christmas bonus.

Art. 264 paragraph 2 says the holiday allowance is the base pay plus the other pay components that are the counterpart of the specific way the work is performed. In plain words: the fixed part of the salary, plus the supplements that pay for how you work.

[Current interpretation:] the holiday allowance includes, besides base pay:

• Shift allowance, for people who work in shifts.
• Night work, the supplement for working at night.
• Exemption from working hours, the supplement for people without a fixed schedule.

What does not count:

• Meal allowance, which is not remuneration (Art. 260).
• Overtime, a variable and occasional payment.
• Variable bonuses and commissions, unless your collective agreement (CCT) requires them.
• Per diems and expense refunds, which are not salary.

For someone with only base pay (no shift, no night work, no exemption), the holiday allowance equals the Christmas bonus: about one month of base pay.

When it is paid: before your holidays (Art. 264 paragraph 3)

The rule is clear: the holiday allowance is paid before the start of the holiday period (Art. 264 paragraph 3). Since most people take holidays in summer, the allowance usually arrives in June or July.

If you take holidays in parts (split holidays), the allowance is paid pro rata to each part.

There are two exceptions, both only by written agreement between you and the company:

1. A different payment date, which the parties can arrange.
2. Twelfths, paying a slice each month. The temporary regime that allowed paying 50 percent of the allowance in twelfths is no longer in force (ACT). Today, without agreement, it is a lump sum before your holidays.

No one can force you to receive it in twelfths. There has to be an agreement.

First year or leaving year: the pro rata

When you did not work the full calendar year, the allowance is pro rata to the time worked.

In your first year (Art. 239): you accrue 2 working days of holiday per full month of contract, up to a maximum of 20 days. You can only take them after 6 full months. The holiday allowance follows those days.

In the year you leave (Art. 245): in your final settlement you get two allowance parts:

• The allowance for the holidays accrued and not taken (those that vested on 1 January and you had not yet taken).
• The allowance pro rata to the time worked in the year you leave.

Note: in the year after the one you were hired, or in contracts lasting no more than 12 months, there is a cap. The total holiday cannot exceed the part pro rata to the contract length (Art. 245 paragraph 3). For the exact amount, use the calculator.

Holiday allowance and sick leave: who pays

This is the worry for anyone who spent part of the year on sick leave. The short answer: you do not automatically lose the holiday allowance.

What changes is who pays. The employer pays the part for the time you were working. For the missing part, the Compensatory Benefit for Holiday and Christmas Allowances kicks in, paid by Social Security.

The official rules (gov.pt and Social Security):

• It only applies if the impediment due to illness or parental leave lasted more than 30 consecutive days.
• Illness: Social Security pays 60 percent of the allowances the employer did not pay and was not required to pay.
• Parental leave: it pays 80 percent.
• You must claim within 6 months, through Social Security Direct (SSD), with a form signed by the company.

[Current interpretation:] if the leave is due to an occupational disease (and not common illness), there is no compensatory benefit for the allowances. In that case you only get the part the employer pays for the time worked.

Special cases

The general rule is simple, but some situations are worth knowing.

Income tax and Social Security: what is deducted

The holiday allowance is employment income. It pays the same deductions as salary.

• Social Security: 11 percent on the allowance amount. On 1,200 EUR, that is 132 EUR.
• IRS (income tax): withheld using the withholding tables, but separately from the monthly salary. It is not added to your pay to push you up a bracket.

This separation is useful: it stops the allowance, landing in the same month as the salary, from making you pay an artificially higher tax rate.

What if the company does not pay the holiday allowance

The holiday allowance is an employment credit. If it is not paid before your holidays (or at the agreed time), you have the same rights as over unpaid wages. And not paying it is a very serious administrative offence (Art. 264 paragraph 4).

A 3-step plan:

1. Demand it in writing. An email or letter requiring payment, with the amount and a deadline. This starts the default and the interest. Keep proof of sending.

2. Count the interest. The delay accrues default interest at the legal rate. The longer it takes, the more the company owes.

3. File an ACT complaint. Failure to pay is a very serious administrative offence. The ACT can act and, in parallel, the delay strengthens your position if you want to terminate with just cause (Art. 394).

5 common mistakes about the holiday allowance

1. Thinking the allowance is your holiday pay. They are two payments. During your holidays you get your normal salary (Art. 264 paragraph 1) and the allowance (paragraph 2).

2. Calculating it like the Christmas bonus. The base is different: the holiday allowance includes the shift allowance and night work (Art. 264 paragraph 2), which are left out of the Christmas bonus.

3. Believing you lose it while on sick leave. If the leave lasted more than 30 consecutive days, Social Security pays a compensatory benefit of 60 percent of the missing part.

4. Accepting twelfths without agreement. By default it is a lump sum before your holidays. Twelfths are only valid with a written agreement.

5. Forgetting the allowance in the final settlement when you leave. In the leaving year you get the allowance for the accrued untaken holidays and the pro rata for the year (Art. 245). Check that it appears on the settlement statement.

Useful links

• Holiday days calculator 2026 the days you are entitled to and the payment on termination.
• Net salary calculator 2026 see the real IRS and Social Security deduction.
• Christmas bonus in Portugal 2026 the "twin" of the holiday allowance, with a different calculation base.
• 22 or 25? Your real holiday days how many days you actually get.
• Unused holidays payment what you get for holidays you did not take.
• Holiday allowance in your first year the 2-days-per-month rule.
• Sick leave payment in Portugal 2026 table how much you get on leave and how it links to the allowances.
• How to file an ACT complaint if the company does not pay.