The Minister for Labour announced on Friday that the Government will honour their prior agreement, signalling that Portugal’s national minimum wage is set to rise by €50 in January, from the current €870 to €920.
“Last year, an agreement on wage growth and economic development was signed, establishing the trajectory of the national minimum wage for the duration of the parliamentary term. That is the agreement we will uphold. The Government will, in due course, publish the decree setting the 2026 minimum wage, in line with that commitment,” explained Maria do Rosário Palma Ramalho during a parliamentary hearing on the 2026 State Budget. This was promise was again confirmed today by prime-minister Montenegro in parliamentary discussions.
Portugal’s minimum wage remains among the lowest in Western Europe, despite steady increases in recent years. The country still trails far behind EU leaders such as Luxembourg (€2,638), Ireland (€2,282) and the Netherlands (€2,193). While Portugal sits in the middle tier of EU minimum wages, alongside countries like Lithuania (€1,038) and Poland (€1,091), its purchasing power remains among the weakest in the bloc, according to Eurostat data. When adjusted for cost of living, Portuguese minimum-wage earners effectively take home less than their counterparts in several Eastern European nations. Low pay continues to underscore the country’s broader struggle with stagnant living standards and high inequality within the European Union.
Last year, Luís Montenegro’s Government reached a deal with the four employers’ confederations and the UGT trade union, providing for annual increases of €50 in the national minimum wage until 2028.
However, following the general election in March this year, the Government set a new target of raising the minimum wage to €1,100 by 2029, leaving open the possibility of revising the agreement.
In an interview with press in early September, the PM had noted that “the figures must be assessed carefully” to avoid a sudden jump of €80 in 2029, suggesting it “might be more sensible to spread the rise more evenly across the parliamentary term.”
Later that month, following a meeting of the Social Concertation Council, the labour minister told journalists she “neither opened nor closed the door” to an increase beyond what was agreed.
Nevertheless, during Friday’s hearing, the minister confirmed that the Government intends to comply fully with the deal, effectively signalling that the minimum wage will reach €920 in 2026.
Given that the 2026 State Budget also includes an increase in the “minimum subsistence threshold” for income tax purposes, workers earning the national minimum wage will continue to be exempt from paying IRS (personal income tax).
