The average salary in Portugal for the most recent year (2022) is 33,000 EUR per year. That’s around 32,117.04 USD per year according to the October 2022 exchange rates.
Portugal is quickly becoming one of the most popular outsourcing destinations in Europ,e as it balances lower salaries with a competent workforce.
If you’re a business owner thinking of outsourcing to Portugal and need to understand more about the economy and general wage information, we’ve got you covered.
In this article, we’ll examine the average salary in Portugal, salary increments, and the national minimum wage. Finally, we’ll go through some of the top reasons why you should consider
outsourcing to Portugal.
Let’s get started!
The average salary in Portugal: Statistics and trends
Portugal’s average monthly salary is around 2750 EUR or 2676.42 USD.
It’s interesting to note that the average salary in Portugal is substantially lower than in the United States, where people earn approximately 7892 USD per month.
The average monthly salary in Portugal is also less than in the United Kingdom, where it’s around 6,699 USD per month.
Note: Employers need to pay between 22-34% of the employee’s salary as a social security contribution. Employees themselves pay a social security contribution of 11%
To better understand the average gross salary and determine if Portugal is ideal for your business, let’s review some statistics.
A. Median salary
The average median salary for the most recent year in Portugal stands at 2,640 EUR or 2,604 USD.
It refers to the middle value of all the salaries considered. This means that around half the population in Portugal will have a minimum salary of less than 2,640 EUR per month, while the other half will earn more.
B. Average salary range
The average salary range allows us to look at both the higher and the lower end of the salary spectrum in Portugal.
On average, salaries can range from 700 EUR (697 USD) to 12,300 EUR (11,942 USD).
Note: This salary range considers salaries that fall between the average lowest and highest salary in the country. This means that the actual maximum salary might be more than 12,300 EUR per month, while the minimum salary may be lower than 822 EUR.
C. Minimum wage
Portugal is a European country with a government-mandated national minimum wage set at 822 EUR per month.
Minimum wages refer to the lowest remuneration employers should legally pay a worker. An employment contract may not offer lower than this mandatory minimum.
In other words, no employee in Portugal may earn wages less than 822 EUR a month.
D. Annual salary increments
In Portugal, a full-time employee is likely to receive an average annual salary increase of 9% every 16 months. This figure, however, differs from industry to industry and can be varied by the employment contract.
The experience level of a worker often leads to higher salary increments too.
Let’s take a look at the increment forecasts.
1. Salary increments by industry:
|Industry||Annual Increment (in percentage)|
2. Salary increments by experience level:
|Years Of Experience||Average Salary Percentage Increase|
|2 – 5 years||+32%|
|5 – 10 years||+36%|
|10 – 15 years||+21 %|
|15 – 20 years||+14%|
Disclaimer: All salary data in this article are estimates. Individual salaries can vary based on location, years of experience, education, job title, and other factors.
So the salaries in Portugal might be lower, but so is the cost of living. In fact, the cost of living in Portugal is one of the lowest in Western Europe at around 562 EUR (547 USD) per month.
This directly reflects in the purchasing power, which is 108% lower than in the United States. Purchasing power is a currency’s value expressed in terms of the number of goods or services that one unit of money can buy.
Now, let’s look at a few factors that influence salary income in Portugal.
3 Factors influencing salary in Portugal
It’s fair to assume that the average gross salary alone is not a perfect reflection of what people earn in Portugal.
Instead, income can vary based on various factors, including education level, age, experience, location, and the job you work.
Let’s look at how these different factors influence the people’s salaries in Portugal.
Salaries in Portugal vary depending on the region or city you work in.
Here are the average salaries in major cities in Portugal:
|City or Region||Average Salary (Monthly)|
|Lisbon||2,550 EUR (2,476 USD)|
|Porto||2,440 EUR (2,370 USD)|
|Funchal/Madeira||2,240 EUR (2,175 USD)|
These values on substantially lower than in a city like New York. In New York, the average salary income is around 9,500 USD per month.
2. Job title
Different professions demand different salaries. So your job will influence the salary you earn.
Here are a few salaries from popular jobs in Portugal:
|Profession||Average Salary (Monthly)|
|Chief executive officer||6,100 EUR (5,954 USD)|
|Attorney||5,260 EUR (5,134 USD)|
|Human resources manager||4,100 EUR (4,005 USD)|
|Chief information officer||3,620 EUR (,3528 USD)|
|Architect||3,240 EUR (3,162 USD)|
|Project manager||2,920 EUR (2,844 USD)|
|Social media specialist||2,620 EUR (2,552 USD)|
|Real estate agent||2,390 EUR (2,329 USD)|
|Developer/programmer||2,050 EUR (1,998 USD)|
|Accountant||1,840 EUR (1,797 USD)|
|Human resources officer||1,630 EUR (1,592 USD)|
Higher education = higher salary in Portugal. An average salary increase depends on the level of education.
A salary survey done by Salaryexplorer.com reveals that in Portugal:
- Employees with a diploma earn, on average, 17% more than those who only have high school level education.
- Employees with Bachelor’s degrees earn 24% more than employees with diplomas or certificates.
- Employees with Master’s degrees earn 29% more than employees with Bachelor’s degrees.
- Employees with PhDs earn 23% more than employees with Masters degrees.
All of this average wage information might convince you to hire a workforce in Portugal. You would be correct, as Portugal is an excellent country for outsourcing.
Find out everything you need to know about outsourcing here!
Let’s look at the advantages of outsourcing to Portugal (apart from low average wage values).
Why you should outsource to Portugal: 4 key benefits
Situated in Western Europe, Portugal provides many economic advantages to companies who decide to outsource here. Let’s look at the four main ones:
1. Prime location
Portugal is a prime location for business as it’s a European country situated nearby many trading borders and docks. The country acts as a door to central Europe, being a neighbor to Spain. The south-western peninsula also provides direct access to the Atlantic ocean.
2. Global talent hub
Portugal has a large pool of highly dedicated, skilled, and experienced workforce. In fact, Portugal ranks 26th in the worldwide IMD Talent Ranking for 2022, meaning that the workers in the country are highly educated and ready to work.
This, alongside the fact that Portuguese is in the top 5 most spoken languages in the world, makes Portugal a prime spot for outsourcing.
A commonly spoken language is an important factor in outsourcing. Other countries in Eastern Europe, like Slovenia and Slovakia, may not have this advantage.
3. Social and political stability
As a country in Western Europe that forms part of the European Union, Portugal has strong social and political stability. That’s why employing foreign workers in Portugal can be easy and peaceful.
This is reflected by the fantastic progress in their annual GDP. The latest report showed that the Portuguese economy grew by 4.9% in 2021 (the highest figure since 1990). And it’s only predicted to get better.
Portugal, like many other EU countries, also has robust labor laws relating to leave, working hours, and minimum wage.
The country has been named the 6th most peaceful country in the world, and it performs well on the quality of life index.
This means employees usually won’t want to leave Portugal to go and work in other countries.
4. Value to cost ratio
Portugal has a tremendous value-to-cost ratio which means that you can hire a skilled employee for a much lower price than almost anywhere else in the world.
For example, a software engineer might cost you 31,000 USD per year in Portugal. But if you were to outsource the same job to the United Kingdom, you’d pay around 58,000 USD per year – almost 1.9x more.
It’s also interesting to see that in Portugal, the OECD average household per capita net is around 24,877 USD. It’s significantly lower than the OECD average household per capita net worldwide, which stands at 34,090 USD.
In fact, Portugal doesn’t even rank in the top 10 countries in the European Union for the highest salary.
Portugal has one of the world’s most reasonable monthly salaries compared to other fully developed countries.
This allows you to choose from a large pool of technically skilled workers in a country with strong social and political stability.
If you’re thinking about outsourcing your business to Portugal or doing a job search, you can use the information in this article before making a final decision.