The Meal-Allowance Fight in the 2027 Budget Also Decides How Much of a Private-Sector Meal Card Escapes Tax

Portugal's three main public-administration union federations go into October's pay negotiation demanding more than the multi-year deal already promises, and one of their demands reaches a long way past the people they represent. The daily meal allowance paid by the state is the reference the tax code uses to decide how much of a private-sector meal card escapes IRS. Move it, and the exempt ceiling moves with it.

The mechanism, in one paragraph

Under the IRS Code, the subsídio de refeição (meal allowance) counts as taxable income only in the part that exceeds the legal limit set for the public administration. Where it is paid by meal card or voucher, the threshold is that limit plus 70 percent. In 2026 the state's allowance rose from €6 to €6.15 a day, which put the card exemption at €10.46 a day.

The multi-year accord already schedules €6.30 for 2027, which on the same arithmetic would lift the card ceiling to roughly €10.71. FESAP and STE intend to ask for €10 a day instead. If the government conceded that, the tax-free ceiling on a meal card would jump to €17 a day, for every private-sector worker who is paid that way.

Why the unions say the accord is not enough

The Acordo Plurianual de Valorização dos Trabalhadores da Administração Pública 2026 to 2029 was signed by FESAP and STE, both aligned with the UGT confederation. The Frente Comum, aligned with the CGTP, stayed out. For 2027 the pact sets a rise of €60.52 a month or 2.30 percent, whichever favours the worker, and the same formula runs through 2029. The meal allowance climbs 15 cents a year to €6.60 by 2029.

All three federations now call that a floor rather than a settlement. FESAP secretary-general José Abraão describes it as "an agreement of minimums" that will not recruit the best or stop existing staff leaving, and points to the accord's own inflation safeguard clause. Consumer prices rose 3.0 percent in July, with core inflation at 2.6 percent, against an agreed 2.30 percent raise. STE president Rosa Sousa uses the same phrase and argues the economic context has changed enough to justify more.

Last year's opening bids give the measure of what is coming: FESAP asked 6.5 percent with a floor of €95, STE 6.4 percent, and the Frente Comum 15 percent with a floor of €150. Abraão also notes that the meal-allowance increase was not in the accord originally and was added during negotiation, which is his argument that the trajectory can be reopened. The unions first signalled this in July.

The state's minimum wage keeps pulling ahead

A second front is the Base Remuneratória da Administração Pública (BRAP), the state's own minimum. It is set at €934.99 in 2026 against a national minimum wage of €920 in the private sector. The scheduled path takes it to €995.51 in 2027 against €970, and €1,056.03 in 2028 against €1,020. The gap widens from €14.99 to €25.51 to €36.03 across those three years, and FESAP wants it wider still.

Beyond pay, the federations want the general-career review that the accord itself schedules from 2027 actually delivered, changes to the SIADAP performance-appraisal system, which the Frente Comum wants scrapped entirely, and completion of the promised overhaul of travel allowances. The annual negotiation opens in October, before the 2027 State Budget is filed.

What This Means for Expats

• You do not need to work for the state to be affected. If your employer pays a meal allowance by card or voucher, the tax-free ceiling is derived from the public-sector figure. It is €10.46 a day in 2026.
• Watch October, not the Budget. The general annual negotiation runs before the 2027 Budget is tabled, and that is where any increase above €6.30 would be agreed.
• A raise above the accord is possible but not scheduled. The government presents the pact as a guaranteed minimum rather than a ceiling, and the meal allowance itself was added to it mid-negotiation last year.
• Public-sector pay sets a floor others follow. The BRAP is now running ahead of the national minimum wage and widening, which matters to anyone benchmarking a salary offer in Portugal.