The Fundo de Garantia Salarial in Portugal in 2026: A Practical Guide to the Wages the State Pays When Your Employer Collapses, the One-Year Deadline, and the 2,760 Euro Monthly Ceiling

When a Portuguese employer stops paying and then collapses, there is a state fund that pays part of what you are owed. It is called the Fundo de Garantia Salarial (Wage Guarantee Fund), it is financed by employers and the State rather than by you, and in 2026 it will pay a maximum of 2,760 euros a month and 16,560 euros in total.

It is also one of the easiest entitlements in Portugal to lose by waiting. The claim expires one year after your contract ends, and the fund does not open at all unless a specific legal event has happened to your employer. This guide sets out what that event is, what the fund covers, how the six-month window works, what the ceilings actually mean in cash, and the sequence to follow from the week you find out.

Where the fund comes from

The starting point is Article 336 of the Código do Trabalho (Labour Code), which is a single sentence: payment of a worker's credits arising from the employment contract, or from its breach or termination, that the employer cannot pay because of insolvency or a difficult economic situation, is assured by the Fundo de Garantia Salarial under specific legislation.

That specific legislation is Decreto-Lei n.º 59/2015, de 21 de abril, which approved the current regime as an annex and transposed European Directive 2008/94/EC on the protection of employees in the event of the insolvency of their employer. The fund has its own legal personality and its own administrative, patrimonial and financial autonomy. It is managed jointly by the State and by the social partners who sit on the standing social concertation committee, and it is financed by employers, through the active employment policy share of the global contribution rate, and by the State.

Two consequences follow from that structure and they are worth stating plainly. You have not paid for this and you cannot have contributed too little to qualify. And the fund's liability does not depend on whether your particular employer kept up with its own contributions, which matters because an employer heading into insolvency usually has not.

The three doors in

Article 1 of the annex is the gate. The fund assures payment where one of exactly three things has happened:

• a court has handed down a judgment declaring the employer insolvent;
• a judge has issued the order appointing a provisional judicial administrator in a Processo Especial de Revitalização (PER, the special revitalisation procedure for a company trying to restructure before it fails);
• IAPMEI, the competitiveness and innovation agency, has issued an order accepting a request under the out-of-court company recovery procedure.

If none of those has happened, the fund is closed to you, however long your employer has gone without paying. An employer that simply withholds wages is a matter for the Autoridade para as Condições do Trabalho (Authority for Working Conditions) and for the labour court, not for this fund. The practical implication is uncomfortable but important: if your employer is failing and nobody has started a process, somebody has to start one, and a worker with unpaid wages is a creditor who can petition for insolvency.

The fund is notified automatically in each case. The court notifies it of the insolvency judgment, together with the initial petition and the documents listed in Article 24 of the Código da Insolvência e da Recuperação de Empresas (Insolvency and Company Recovery Code). In a PER, the provisional judicial administrator notifies it. In the out-of-court procedure, IAPMEI does. That notification does not start your claim; you still have to make it.

If the insolvency is in another country

This is the paragraph most often missed by people who moved here to work. Article 1(3) says the fund pays a worker who habitually works or worked in Portugal for an employer operating in two or more member states, even where the insolvency is declared by a court or other competent authority in another EU state or in a state covered by the European Economic Area agreement.

So if you were employed in Lisbon or Porto by the Portuguese arm of a company that goes under in Germany, Ireland or the Netherlands, the Portuguese fund is still your fund. It will ask the competent authority in the other state for the information it needs to decide, and it will ask that state to make sure the sums it pays you are taken into account in the foreign insolvency so it can be reimbursed.

What the fund pays for

Article 2 defines the covered credits as those of the worker arising from the employment contract or from its breach or termination. That is deliberately wide. It reaches unpaid base pay, but also the holiday pay, the holiday and Christmas subsidies, the proportional amounts due on termination, and sums owed because the employer broke the contract.

Two deductions come off before you are paid: your own share of social security contributions, and the IRS withholding on the amounts. The fund does not keep those. It pays them across to the social security and the tax authority on your behalf, which means the amount that reaches your bank account is a net figure and the gross amount is what the employer ends up owing the fund.

Paying you does not release your employer from its own tax and contribution obligations.

The six-month reference window, and the exception that saves most claims

The fund covers credits that fell due in the six months before the insolvency action was filed, or before the PER request or the out-of-court recovery request was presented. That is the reference period, and on a strict reading it would exclude a great deal, because wages typically stop being paid long before anyone files anything.

Article 2(5) is the safety valve, and it is the provision to know. Where there are no credits at all inside that six-month window, or where they add up to less than the maximum the fund can pay, the fund covers credits that fell due after the reference period, up to that same ceiling. In practice this means the ceiling, not the calendar, is usually what limits a claim.

This structure is not a Portuguese invention. The European directive allows member states to limit the guarantee, but sets a floor: the guaranteed period may not be shorter than the remuneration of the last three months of the employment relationship, and a member state may place that minimum inside a reference period of no less than six months. Portugal took the six-month option, then softened it with Article 2(5).

Termination compensation, and the part the fund does not pay

Compensation for termination of the contract, where it is calculated under Article 366 of the Labour Code, either directly or by legal cross-reference, is paid by the fund. There is one carve-out: the share that falls to the FCT, the FGCT or an equivalent mechanism, once those have been triggered, unless triggering them is not possible.

The FCT and FGCT are the compensation funds employers pay into monthly for exactly this purpose, and they cover up to half of the Article 366 compensation. So the wage guarantee fund tops up rather than duplicates. After it receives your claim, if it sees termination compensation itemised in it, the fund asks the FGCT's managing body what has already been paid to you or is available for that purpose, and the FGCT has 15 days to answer.

Article 366 itself sets the compensation at 14 days of base pay and seniority payments for each complete year of service, with its own ceilings: the monthly base pay used in the calculation cannot exceed 20 times the minimum wage; the total cannot exceed 12 times your monthly base pay, or 240 times the minimum wage where that first cap applies; the daily value is the monthly figure divided by 30; and part years are counted pro rata.

The ceilings in 2026 money

Article 3 sets two limits at once, and they interact.

• The overall maximum is the equivalent of six months of pay.
• The monthly maximum is three times the retribuição mínima mensal garantida, the guaranteed minimum monthly wage.

Decreto-Lei n.º 139/2025, de 29 de dezembro, set that minimum wage at 920 euros from 1 January 2026 for mainland Portugal. So for 2026 the monthly ceiling is 2,760 euros, and the absolute maximum the fund can pay any one worker is 16,560 euros.

If you earned less than 2,760 euros a month, the monthly cap never bites and your ceiling is six months of your own pay. If you earned more, the excess is not covered by the fund; it stays as a claim in the insolvency, where it may or may not be paid.

Where your credits are made up of different kinds of payment, the money is allocated first to base pay and seniority payments, which is to your advantage if any part of the claim is later disallowed.

The one-year deadline, and the clock that stops it

The fund only pays where payment is requested within one year from the day after the employment contract ended. That is the rule in Article 2(8) and it is the single most common way a valid claim is lost.

The clock is suspended by the filing of the insolvency action, the presentation of the PER request or the presentation of the out-of-court recovery request. It starts running again 30 days after the insolvency decision becomes final, or from the date of the decision in the other two procedures. This suspension was added by Article 322 of Lei n.º 71/2018 and has been in force since 1 January 2019.

The practical reading: your contract ending starts a one-year timer, and the formal collapse of your employer pauses it. Do not try to compute the exact expiry yourself when the insolvency has dragged on. File early.

How to claim

The claim is made by the worker, on a form approved by ministerial portaria, at any social security service or online at the Segurança Social portal. It has to identify you and your employer and to itemise the credits you are claiming, which means listing each amount and what it is for rather than stating a total.

It has to be accompanied by one of three documents, in order of preference:

1. a declaration, or a certified copy of a document evidencing the credits, issued by the insolvency administrator or the provisional judicial administrator;
2. a declaration from the employer confirming the nature and amount of the credits, where you are not a constituted party in the proceedings;
3. where neither of those can be obtained, a declaration of the same content from the labour inspectorate, that is, the inspection service of the ministry responsible for employment.

The document must be certified by the administrator, the employer or the inspectorate, either with an electronic signature or with a handwritten signature on the reverse.

The third route exists precisely because administrators are slow and failing employers are unreachable. If you cannot get either of the first two, that is not the end of the claim; it is a reason to go to the inspectorate.

Decision, and the abuse clause

The fund has 30 days to decide, counted from the date on which the application is properly documented. Note where that clock starts: an incomplete file does not start it. The decision must be reasoned and notified to you, and where it grants the claim in whole or in part it must state the amount, the form of payment and the amounts deducted.

The fund may refuse payment where it finds abuse, in particular collusion or simulation. It may also reduce the amount where there is a mismatch between the sums claimed and the average of the figures in your employer's remuneration declarations for the 12 months before the claim, where those refer to pay actually received. In plain terms: if your employer declared you at the minimum wage while paying you more in cash, the fund will work from the declared figure.

What happens after you are paid

The fund steps into your shoes. It is legally subrogated to your rights and to your credit privileges to the extent of what it paid you, plus default interest accruing from then on. If the insolvent estate cannot cover all the labour credits, the fund's subrogated credits rank on equal footing with the remainder of the workers' credits rather than ahead of them.

Your former employer's debt to the fund is the gross value of what was paid, and it is notified to the employer at the same time as the payment is made. Collection is based on a certificate issued by the president of the fund's management board, and the debt can be settled in instalments by agreement.

None of that is your problem, and it is not a reason to hesitate. The fund recovering from the estate is a separate process that runs whether or not you claim.

A sequence to follow

1. Find out which procedure your employer is in. Insolvency, PER and the IAPMEI route all open the fund; an employer that is merely not paying does not. The insolvency administrator, the provisional judicial administrator or IAPMEI will be able to tell you which one applies.
2. Write down the date your contract ended. The one-year clock runs from the day after it, and you will need the date on the form.
3. Itemise everything you are owed, by month and by heading: base pay, holiday pay, holiday and Christmas subsidies, proportional amounts on termination, and any compensation.
4. Ask the insolvency administrator for the declaration. If there is no administrator yet, ask the employer. If neither responds, go to the labour inspectorate for the third-route declaration.
5. File at Segurança Social, in person at any service or through the portal, and keep proof of the filing date.
6. Check the compensation split. If your claim includes termination compensation, part of it may come through the FCT or FGCT rather than through this fund, and the fund will ask them directly.
7. Claim in the insolvency as well. The fund covers what it covers; anything above the ceiling remains a claim against the estate.

The mistakes that cost people money

Four recur. Waiting for the insolvency to finish before claiming, when the deadline is tied to the end of the contract and not to the end of the case. Assuming that unpaid wages alone qualify, when a formal procedure is the trigger. Expecting the fund to pay the whole termination compensation, when up to half of it sits with the FCT and FGCT. And submitting a bare total instead of an itemised list, which leaves the application incomplete and stops the 30-day clock from starting.

If your employer's collapse is heading towards a formal procedure, our guide to personal insolvency in Portugal explains how the insolvency process itself is structured, and the guide to closing a business in Portugal covers the same ground from the employer's side. If you are also facing enforcement of your own debts while your pay has stopped, the rules on what a creditor can reach set out the protected minimum. For the benefit side after the job ends, see drawing the subsídio de desemprego, and if you need a lawyer and cannot pay for one, apoio judiciário is means-tested through the same social security system.

This is not a hypothetical risk. When a Gaia shoe factory founded in 1948 collapsed in August, 54 workers were left without their pay, and Portugal logged 375 collective redundancy procedures by July, the most since the pandemic. The fund exists for exactly those weeks, and the people who get paid from it are the ones who file on time with a complete file.

Sources

This guide is written from official Portuguese and EU sources.

• Diário da República, Decreto-Lei n.º 59/2015, de 21 de abril, novo regime do Fundo de Garantia Salarial, consolidated text (Portuguese only)
• Diário da República, Código do Trabalho, Artigo 336.º, Fundo de Garantia Salarial (Portuguese only)
• Diário da República, Código do Trabalho, Artigo 366.º, compensação por despedimento colectivo (Portuguese only)
• Diário da República, Decreto-Lei n.º 139/2025, de 29 de dezembro, retribuição mínima mensal garantida de 920 euros a partir de 1 de janeiro de 2026 (Portuguese only)
• EUR-Lex, European Union, Directive 2008/94/EC on the protection of employees in the event of the insolvency of their employer