Government Offers Civil Servants 5 Percent More for Work Travel From November, a Rise That Usually Lifts Private Employers' Tax-Free Per Diems Too

The government has offered public-sector unions a 5 percent rise in the allowances civil servants are paid when they travel for work, starting this month. The Ministério das Finanças (Finance Ministry) put the proposal to the three union fronts on Friday, it said in a communiqué (in Portuguese) published that evening.

The offer covers the ajudas de custo (daily subsistence allowances, or per diems, which pay for meals and lodging on official trips) and the transport allowances, such as the rate per kilometre for using your own car. The ministry says the rise responds to the higher cost of travelling on duty.

What the allowances are now

The daily amounts for trips within Portugal were last raised in January 2025, when Decreto-Lei n.º 1/2025 (Decree-Law 1/2025, PDF in Portuguese) lifted them by 5 percent from the figures set in Portaria n.º 1553-D/2008 (PDF in Portuguese). Working from those two texts, the full daily allowance for a civil servant is now:

• 65.89 euros for staff paid above level 18 of the single public pay scale;
• 53.60 euros for staff paid between levels 9 and 18;
• 49.20 euros for everyone else.

The rate for using your own car on duty is set in the same 2008 ordinance at 0.40 euros a kilometre; the 2025 decree did not change it.

The communiqué gives no new figures. A straight 5 percent on today's amounts would take the three daily rates to about 69.18, 56.28 and 51.66 euros, and the car rate to 0.42 euros a kilometre. That is our arithmetic, not the government's, and the final amounts will only be known when the rise is published in the Diário da República (the official gazette).

Why it matters outside the civil service

The public-sector figures also set the tax-free ceiling for private employers. Under the IRS code (article 2, on the tax authority's website, in Portuguese), per diems and car-mileage payments are taxed as salary only in the part that exceeds the "legal limits" or when they are paid without meeting the conditions that apply to state employees. Paragraph 14 of the same article says those limits are the ones "fixed annually" for state employees.

So a company that pays staff 0.40 euros a kilometre, or a per diem within the public-sector rates, pays it free of income tax. If the public rates go up, so in principle does the ceiling. One question remains open: the law speaks of figures fixed annually, and in 2017, when a public-sector allowance changed during the year, the budget law added a transitional rule saying the January value counted for the whole year. Whether a rise from November applies to private-sector payments this year will depend on how the new instrument is written.

What else was on the table

The proposal came in the annual pay talks with the Frente Sindical, FESAP (the federation of public administration unions) and the Frente Comum. The ministry said it would keep to the timetable of the 2026 to 2029 multi-year pay agreement, with the general careers and a new performance appraisal system (SIADAP) as the priorities for 2027. It counts 57 agreements so far covering 39 special careers and more than 350,000 workers.

"This increase follows the rise in the cost of living for public administration workers," the Finance Minister, Joaquim Miranda Sarmento, said in the communiqué.

The offer lands days before the 20 November public-sector strike. Earlier this week, the planned rise in the public-sector meal allowance pushed up the tax-free limit for meal cards for 2027, and official figures put civil servants' average base pay at 1,967 euros a month.