Portuguese Workers' Average Pay Beat Inflation by 1.5 Percent in the Third Quarter, Down From 2.7 Percent a Year Earlier, as Prices Catch Up

Average gross pay in Portugal rose 4.9 percent in the year to the third quarter of 2026, to 1,696 euros a month per job, and 1.5 percent once inflation is taken out, the national statistics institute (INE) reported on Friday. Pay is still beating prices, but by less: a year earlier the real gain was 2.7 percent.

INE puts the slowdown down to both sides of the sum. Consumer prices rose 3.3 percent over July to September, against 2.6 percent in the same quarter of 2025, while nominal pay growth eased from 5.4 percent to 4.9 percent.

Regular and base pay

The 1,696 euro figure is total gross pay, which includes holiday and Christmas bonuses and other irregular payments. Regular pay, which leaves those out, rose 5.1 percent to 1,434 euros, and base pay (the contractual salary before allowances) rose 5.2 percent to 1,342 euros. In real terms both grew 1.8 percent. By our own calculation from INE's figures, the average total pay packet is 79 euros a month higher than a year ago.

The data come from social security and civil service pension fund (Caixa Geral de Aposentações) returns and cover 5.0 million jobs, 1.4 percent more than a year earlier. INE counts jobs, not people, so someone with two employers appears twice. The release does not give a median or a regional breakdown.

Who gained most

• By sector: farming, forestry and fishing led with 7.7 percent, followed by construction at 6.9 percent. Electricity and gas supply, the best paid sector at 3,076 euros, grew only 1.2 percent and lost 2.1 percent in real terms. Pay in health and social care was flat after inflation. Hotels and restaurants remain the lowest paid sector, at 1,199 euros.
• By firm size: workers at firms with one to four staff saw the biggest rise, 6.1 percent, though they still earn the least, 1,238 euros on average. The smallest rise, 3.7 percent, was at firms with 500 or more staff.
• Public and private: private sector pay, covering 84.4 percent of jobs, rose 5.1 percent to 1,605 euros (1.8 percent in real terms). Total pay in public administration rose 4.1 percent to 2,186 euros, a real gain of only 0.9 percent, although base pay there grew 5.8 percent. INE notes that public sector staff are, on average, more highly qualified.

Those INE figures cover the whole public administration sector and are a different measure from the civil service base pay data we reported on Thursday.

Labour costs for employers

A second INE release out the same day, the Labour Cost Index, shows employers' costs per hour actually worked rose 5.3 percent in the third quarter, down from 5.6 percent in the second. Wage costs and other costs, such as social security contributions, both rose 5.3 percent. The average cost per worker rose 5.0 percent, while hours worked per worker fell 0.1 percent. Construction saw the steepest increase, 6.9 percent; public administration had the smallest rise in cost per worker, 4.7 percent.

What it means for you

If your pay rose in line with the average, it went further than a year ago, but the margin over prices is narrowing. Inflation reached 3.8 percent in October, INE confirmed on 11 November, up from the 3.3 percent average of the third quarter. In our own comparison, nominal pay growth of about 5 percent is still above that rate, but any raise below the inflation rate means a fall in real pay. Anyone negotiating pay for 2027 can use INE's sector figures as a benchmark.