If you employ people in Portugal — or you are about to make your first Portuguese hire — annual leave is one of the first things to get right. The Portuguese Labour Code (Código do Trabalho) sets a generous statutory minimum, and it adds something most other European regimes do not have on top: a mandatory holiday subsidy that effectively works like a 13th-month payment tied to leave.

This guide explains what the Código do Trabalho actually requires in 2026 — the 22-day minimum, how leave accrues in the first year, the subsídio de férias, the right to take leave during the holiday season, and the pitfalls that catch international employers most often. Every fact below comes from Articles 237–259 of the Labour Code itself.

Key Takeaways

Statutory annual leave in Portugal is 22 working days of paid leave per calendar year.
Employees also receive a holiday subsidy (subsídio de férias) — equal to their normal remuneration plus an additional payment of the same amount.
In the first year of employment, leave accrues at 2 days per month worked, capped at 22 days.
From the second year onwards, the full 22 days are available from 1 January.
Employees have the right to take leave during the holiday season (1 May to 31 October) if requested.
Untaken leave and the corresponding subsidy must be paid out on termination and cannot be waived.

The Statutory Entitlement Under the Código do Trabalho

Article 237 of the Portuguese Labour Code sets the floor. Every employee on a contract of employment is entitled to 22 working days of paid annual leave (férias) per calendar year. This is one of the higher minimums in the European Union — a clear lift on the EU Working Time Directive’s 20-day baseline.

A “working day” here means the employee’s normal scheduled working day, typically Monday to Friday. Saturdays, Sundays, and public holidays do not count against the 22-day allowance.

Why 22 Days Is Not the Whole Story

The headline 22-day figure is only part of the package. Portugal layers a second mandatory entitlement on top: the subsídio de férias, a holiday subsidy paid in addition to normal remuneration. International employers who plan their compensation budget around the 22 days alone consistently underestimate their Portuguese payroll cost.

The Holiday Subsidy (Subsídio de Férias)

The holiday subsidy is the entitlement most foreign HR teams overlook. Under the Código do Trabalho, employees receive — on top of being paid their normal salary while on leave — an extra payment equal to that normal remuneration. In effect, the employee is paid twice for the holiday period: once as their regular salary, and once as the subsídio de férias.

The subsidy is typically paid before the employee takes their main block of leave, so they have the cash in hand when they go on holiday. Many employers pay it in June or July to coincide with the summer break.

What the Subsidy Covers

The subsídio de férias is calculated on the employee’s normal remuneration, including regular allowances and any payments that are part of ordinary monthly pay. It is taxable in the same way as salary — it counts as taxable income and is subject to social security contributions.

Pro-Rata in the First and Last Year

In the first year of employment and on termination, the holiday subsidy is pro-rated to match the leave actually accrued. If an employee has earned only 10 days of leave by year-end, they receive the subsidy on those 10 days, not the full 22.

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Eligibility: First Year, Second Year, and Termination

Article 239 of the Labour Code distinguishes between an employee’s first year of work and every subsequent year.

First Year of Employment

In the first year, leave accrues at 2 working days per full month worked, up to a maximum of 22 days. So an employee who starts on 1 March 2026 will have earned roughly 20 days by the end of December 2026 (10 full months × 2 days).

The first-year rules also limit when leave can be taken. Employees in their first calendar year cannot use accrued leave until they have completed 60 days of work, and the maximum bookable in that first year is generally 20 days.

From the Second Calendar Year Onwards

From 1 January of the year after the employee starts, the full 22 days are available from day one of the calendar year. Employees do not have to wait to accrue their entitlement — it is granted up front, subject to scheduling and approval.

On Termination

When an employee leaves, they are entitled to a cash payout of:

Any untaken accrued leave, calculated against their normal remuneration; and
The corresponding holiday subsidy for that untaken leave.

This payout is mandatory under the Código do Trabalho. It cannot be reduced or waived by contract.

Employer Obligations Under the Labour Code

The Código do Trabalho places several non-negotiable duties on Portuguese employers. Treat the following as a compliance checklist.

1. Grant the 22-Day Minimum

You must grant the full statutory 22 working days of paid leave per calendar year. Contracts that purport to offer less are void to the extent of the shortfall — the floor cannot be lowered, even with the employee’s apparent agreement.

2. Pay the Holiday Subsidy

The subsídio de férias is mandatory, not discretionary. It must be paid in addition to normal salary during leave, and it is typically paid before the main holiday is taken. Employers who pay only the regular salary during leave are in breach of the Labour Code.

3. Allow Leave in the Holiday Season

Employees have the right to request to take their leave during the holiday season — 1 May to 31 October. Employers must consider these requests in good faith. You can refuse for legitimate operational reasons, but you cannot simply blanket-deny the right or restrict everyone to the off-season.

In practice, most Portuguese employers schedule the bulk of statutory leave around the summer (July or August) to align with school holidays and customer expectations.

4. Pay Out Unused Leave on Termination

Untaken accrued leave plus the corresponding holiday subsidy must be paid out in cash when employment ends. This applies regardless of whether the employee resigns, is dismissed, or reaches the end of a fixed-term contract.

5. Maintain Leave Records

Employers must keep accurate records of leave taken by each employee. The ACT (Autoridade para as Condições do Trabalho) — the Portuguese labour inspectorate — can request these records during an inspection, and missing or unreliable records typically lead to default findings against the employer.

6. Cannot Require the Employee to Waive Leave

Article 237 makes clear that statutory leave cannot be waived. An employee cannot validly agree to give up their 22-day minimum in exchange for extra pay or any other benefit while still in employment. The only lawful conversion is the cash equivalent on termination.

Carry-Over of Unused Leave

The default position under the Código do Trabalho is that annual leave should be used in the calendar year in which it is granted. The carry-over rules are tight:

Untaken leave can be carried over into the next year only in specific circumstances, most commonly long-term illness, maternity or parental leave, or a documented refusal of leave by the employer.
Where carry-over is permitted, the leave should generally be used within the first months of the following year.
Routine carry-over because the employer simply did not schedule the leave is not allowed and signals to the ACT that scheduling is not being managed properly.

Employers should plan leave with their teams at the start of the year rather than relying on carry-over as a buffer.

Common Pitfalls for International Employers

If your team has only worked under UK, German, or US leave regimes before, the Portuguese framework will catch you off guard in predictable ways. Watch for these.

Pitfall 1: Forgetting the Subsídio de Férias

This is the single most common error and the most expensive one. The holiday subsidy is mandatory in addition to normal holiday pay, not a discretionary bonus. Building your Portuguese payroll budget around the 22 days alone will systematically under-fund your statutory obligations.

Pitfall 2: Not Pro-Rating Leave in the First Year

A new hire is not entitled to the full 22 days in their starting year. The first-year accrual is 2 days per month worked, up to 22. Treating a March starter as if they had a full 22 days available in their first calendar year over-allocates leave and creates unwanted contractual liabilities if the employee leaves part-way through the year.

Pitfall 3: Refusing Holiday-Season Leave Without a Valid Reason

Employees have the right to request leave during the 1 May to 31 October window. You can refuse on legitimate operational grounds, but a flat policy of “no summer leave for new hires” is unlikely to survive scrutiny by the ACT or a labour court.

Pitfall 4: Trying to Buy Out Statutory Leave Mid-Employment

You cannot pay an employee to give up their 22-day minimum during employment. Any clause that attempts to do so is void. The only lawful cash conversion is the pay-out on termination.

Pitfall 5: Underestimating the Subsidy in Termination Calculations

When an employee leaves, the cash payout includes both the untaken leave and its corresponding holiday subsidy. Settlement-agreement templates copied from the UK or US will usually only cover the leave itself — leaving you exposed to a follow-up claim for the unpaid subsidy.

Frequently Asked Questions

How many days of annual leave am I entitled to in Portugal?

The statutory minimum is 22 working days of paid annual leave per calendar year under Article 237 of the Código do Trabalho. Saturdays, Sundays, and public holidays do not count against the 22 days.

What is the subsídio de férias in Portugal?

The subsídio de férias is the mandatory holiday subsidy payable in addition to normal salary during leave. It is equal to the employee’s normal remuneration — so the employee effectively receives both their regular pay and an equivalent extra amount tied to their statutory leave.

When do I get my full annual leave entitlement in Portugal?

In your first year of employment, leave accrues at 2 working days per full month worked, up to 22 days. From the second calendar year onwards, the full 22 days are granted on 1 January.

Is the holiday subsidy taxed in Portugal?

Yes. The subsídio de férias is treated as taxable income and is subject to personal income tax and social security contributions, in the same way as ordinary salary.

Can I be forced to take my leave outside the summer?

No, not by default. Employees have the right to request leave during the holiday season (1 May to 31 October). The employer must consider this in good faith and can refuse only for legitimate operational reasons — not as a blanket policy.

What happens to unused annual leave when I leave my job?

Untaken accrued leave and the corresponding holiday subsidy must be paid out in cash on termination. This is mandatory and cannot be waived in the employment contract.

Can annual leave be carried over to the following year in Portugal?

Generally no. Leave should be used in the calendar year in which it is granted, with carry-over allowed only in specific circumstances such as long-term illness, maternity or parental leave, or a documented refusal of leave by the employer.

Practical Compliance Checklist

If you operate in Portugal, your leave management system needs to handle the following at minimum:

Grant the full 22 working days of paid annual leave per calendar year from the second year onwards.
Run first-year accrual at 2 days per month worked, capped at 22 days.
Calculate and pay the subsídio de férias as an additional amount equal to normal remuneration on accrued leave.
Allow employees to request leave during the 1 May to 31 October holiday season, and only refuse for documented operational reasons.
Pay out untaken leave and its holiday subsidy on termination — automatically.
Maintain auditable leave records for inspection by the ACT (Autoridade para as Condições do Trabalho).
Reject any contract clause that purports to waive statutory leave during employment.

How Leave Balance Helps Employers in Portugal Stay Compliant

Managing the Código do Trabalho correctly across a Portuguese workforce — alongside UK, French, Dutch, or US teams — is the kind of compliance work that breaks generic spreadsheets. The 22-day minimum, the subsídio de férias, and the first-year accrual rules rarely fit out of the box in a global HRIS.

Leave Balance gives you:

Country-specific entitlement rules for Portugal, including the 22-day minimum and first-year pro-rata accrual.
Holiday subsidy tracking so the subsídio de férias is reflected alongside leave balances rather than buried in payroll.
Holiday-season scheduling that surfaces summer leave requests with a clear approval trail.
Automatic termination payouts for untaken leave and the corresponding subsidy.
Multi-country support with separate policies per entity, all on a single dashboard.

For a comparison with neighbouring regimes, see our guides to Annual Leave Entitlement in France, Annual Leave Entitlement in Germany, and Annual Leave Entitlement in the Netherlands for a side-by-side EU picture. For the wider regional view, see Annual Leave Laws in Germany, France, and the Netherlands.

At $10 per month for unlimited employees and unlimited policies, Leave Balance gives you the country-specific rule engine you need without the cost of an enterprise HRIS. Start your 14-day free trial — no credit card required.