Portugal overtime pay: trabalho suplementar rates, annual caps, night work and IRS withholding

Portugal overtime pay for trabalho suplementar (overtime, commonly called horas extra) is set hour by hour by three inputs: the type of day, the hour's position in that day, and the worker's overtime count for the year. On a working day, the first overtime hour is paid at 125% of the hourly rate and each further hour at 137.5%; from the worker's 101st overtime hour of the year, the same hours are paid at 150% and 175%. The employer withholds IRS (Portuguese personal income tax) on overtime separately, at half the worker's normal monthly rate.

What counts as trabalho suplementar, and the annual caps

The Labour Code (Código do Trabalho) defines trabalho suplementar as work done outside the worker's schedule (Art. 226). Normal working time is limited to 8 hours a day and 40 a week (Art. 203). Overtime is allowed only for a temporary increase in workload that does not justify a new hire, or for force majeure and serious damage (Art. 227).

Art. 228 caps overtime per worker:

• 175 hours a year in a company with fewer than 50 employees
• 150 hours a year in a company with 50 or more
• 80 hours a year for a part-time worker, or the proportional figure if higher
• 2 hours on a working day, and no more than the normal daily hours on a rest day or holiday

Overtime for force majeure or serious damage is limited only by the 48-hour average week in Art. 211, not by these caps (Art. 228(4)). Headcount is the previous calendar year's average (Art. 100). A collective agreement can raise the 150 or 175-hour cap to 200. Breaching the annual cap is a very serious administrative offence (contraordenação muito grave).

Each overtime period must be entered in a register before it starts and immediately after it ends, with the reason (Art. 231). Without the register, the worker is entitled to 2 hours of overtime pay for every day worked outside the schedule.

Portugal overtime pay rates in 2026: the first 100 hours and beyond

Art. 268 sets the supplements added to the hourly rate:

The higher rates come from the Agenda do Trabalho Digno (the Decent Work Agenda reform, Lei 13/2023), in force since 1 May 2023, which restored the Code's original 2009 rates (halved by Lei 23/2012) for hours beyond the 100th.

Art. 271 sets the hourly rate: monthly pay × 12 ÷ (52 × weekly hours). Unless a collective agreement or the contract says otherwise, monthly pay here means base pay plus seniority payments (diuturnidades), not every regular allowance (Art. 262).

Worked example: 10 overtime hours on a €1,200 salary

A full-time employee on €1,200 a month works 2 extra hours on five weekday evenings: 10 overtime hours. Amounts are rounded to the cent at each step.

Hourly rate: €1,200 × 12 ÷ (52 × 40) = €14,400 ÷ 2,080 = €6.92.

Below the threshold (40 overtime hours already this year):

• First hour: €6.92 × 1.25 = €8.65; second hour: €6.92 × 1.375 = €9.52
• One evening: €18.17; five evenings: €18.17 × 5 = €90.85

Above the threshold (more than 100 hours already):

• First hour: €6.92 × 1.50 = €10.38; second hour: €6.92 × 1.75 = €12.11
• One evening: €22.49; five evenings: €22.49 × 5 = €112.45

The same 10 hours cost €21.60 more once the worker is past 100 hours. Had the worker started the week on 98 hours, the first evening would be paid at the lower rates and the other eight hours at the higher ones.

Night work: 22:00 to 07:00 and the 25% supplement

Trabalho noturno (night work) is work done in a window of 7 to 11 hours that includes midnight to 05:00. A collective agreement can set the window; the default is 22:00 to 07:00 (Art. 223). Night work is paid 25% more than equivalent work done during the day (Art. 266).

An overtime hour inside the night window is paid both supplements: Art. 266 measures the night 25% against "equivalent work done during the day", which for an overtime hour is the daytime overtime hour. The Tribunal da Relação de Lisboa (Lisbon Court of Appeal) applied that reading on 19 June 2024 (case 10782/23.6T8LSB.L1-4), following earlier Supremo Tribunal de Justiça (Supreme Court) case law. On a €6.92 hourly rate, the first night overtime hour is €8.65 × 1.25 = €10.81 and the second €9.52 × 1.25 = €11.90, not the €10.38 and €11.25 that applying 25% to the base rate gives. A collective agreement that calculates the night supplement on the base rate still cannot pay below Art. 266.

A collective agreement can replace the 25% with shorter hours or a fixed base-pay increase. Unless an agreement provides for it, the supplement does not apply to activities performed mainly at night, businesses that must open at night (restaurants, hotels, pharmacies), or pay set with night work in mind.

Banco de horas and collective agreements

A banco de horas (hours bank) compensates extra hours later with time off, extra holiday or cash instead of overtime pay. A collective agreement can create one with up to 4 extra hours a day, 60 a week and 200 a year (Art. 208), and can apply it to a whole team. Without an agreement, a group hours bank needs approval by at least 65% of the affected team in a referendum, and is limited to 2 extra hours a day, 50 a week and 150 a year (Art. 208-B). Lei 93/2019 revoked the individual hours bank agreed directly with each worker; Parliament rejected the government's Trabalho XXI bill, which proposed reinstating it, on 19 June 2026.

Since 2023, a collective agreement can depart from the Code's overtime pay rules only in the worker's favour (Art. 3(3)(j)), raising the supplements but never paying below Art. 268.

IRS withholding on trabalho suplementar

Retenção na fonte (withholding at source) on overtime is autonomous: the employer calculates it separately and never adds the overtime to the month's salary (Código do IRS, CIRS, Art. 99-C(5)). Since 1 January 2025 (Lei 45-A/2024), the overtime rate is 50% of the rate on that month's salary, from the first overtime hour; before 2025 the reduction started at the 101st hour.

For the employee above, single with no dependants, using the mainland tables in force since January 2026 (Despacho 233-A/2026, Table I), which apply to every 2026 month except November:

• Salary: €1,200 × 21.20% − €158.18 = €96.22, an effective rate of about 8.02%. Rounded down to the whole euro (CIRS Art. 99-E(1)), €96 is withheld.
• Overtime: half of 8.02%, about 4.01%, so €90.85 × 4.01% = €3.64, withheld as €3.

Had the overtime been added to the salary, withholding on the €1,290.85 total would have been €117 (24.10% row), €21 more than on salary alone. The lower rate changes only the timing: overtime is taxed in full on the annual return. Social security contributions apply to overtime as usual: 11% employee and 23.75% employer (Código Contributivo Art. 46(2)(e) and Art. 53).

November 2026 is the exception. Parliament approved a cut to 2026 IRS rates on 9 October 2026. Despacho 12523-A/2026, a ministerial order published on 14 October, halves the withholding computed under Despacho 233-A/2026 on mainland salaries and pensions paid in November, including the Christmas subsidy, except for monthly pay above €20,221. The current tables apply again from December. The order keeps the other Despacho 233-A/2026 rules and has no overtime provision, so on its wording overtime withholding, worked out under the 50% rule in CIRS Art. 99-C(8), is also halved.

Summary

Weekday overtime is paid at +25% for the first hour and +37.5% after, and rest days and holidays at +50%; beyond 100 hours a year, each supplement doubles. Overtime is capped at 175 hours a year below 50 employees and 150 from 50. Night work (22:00 to 07:00 by default) is paid 25% more, calculated on the overtime rate when the hour is also overtime. IRS on overtime is withheld separately at half the monthly rate.

Flux keeps each worker's overtime count for the year and applies the current rates and withholding tables, including mid-year changes such as November 2026's, on every client's pay run.