Average Salary in Portugal: Everything Foreigners Need to Know

According to the latest OECD data, the average annual salary in Portugal is $37,500.

Considering that the average annual U.S. salary sits at $66,621 (as per the Social Security Administration), it’s easy to see why so many Americans have decided to relocate to Portugal in recent years.

Average Americans have a high purchasing power in Portugal, especially if they continue to work for the United States while living in the country. 

 

This also means they can benefit from investing in the booming local real estate market, as buying a property in Portugal is easier for the average American than it is for the average Portuguese.

 

Here’s how Portugal’s average salary compares to the salaries of the U.S. and other OECD countries (in US dollars):

 

Country	Average annual salary	Per month (est.)	Per hour (est.)
Switzerland	$87,421	$7,285	$48
Denmark	$69,525	$5,793	$38
United States	$66,621	$5,551	$37
Canada	$66,211	$5,517	$36
France	$59,087	$4,923	$32
Spain	$51,336	$4,278	$28
Portugal	$37,500	$3,125	$20
Mexico	$20,474	$1,706	$11

Portugal’s average salary compared to the average salaries of other countries.

 

Even though the average monthly salary in Portugal is estimated to sit above $3,000, more than 50% of Portuguese workers earned less than €1,000 per month (roughly $1,049) as of October 2023. 

According to the European Union, more than 20% of the Portuguese population is at risk from poverty or social exclusion. This is reflected in Portugal’s comparatively low basic salary.

How Much is the Basic Salary in Portugal?

The basic salary in Portugal, also known as the minimum wage, is €822 (roughly $862).

While many Portuguese are forced to live on a minimum wage salary, Americans looking to relocate to Portugal can still find several high-paying job opportunities in the country. These are the 10 best-paid jobs in Portugal (converted into US dollars):

 

1. General Director (Industry & Services): up to $136,000
2. Industrial Director: up to $136,000
3. Procurement Manager: up to $125,000
4. Financial Director: up to $104,000
5. Commercial Director: up to $104,000
6. DevOps engineer: up to $104,000
7. SAP consultant: up to $94,000
8. Cybersecurity expert: up to $94,000
9. Cloud architect: up to $89,000
10. Software engineer: up to $78,000

Portugal’s tax income is also comparatively higher than the tax income in the United States, with tax brackets ranging from 10% to 37%. In Portugal, the tax income can be as high as 48%, depending on the annual salary (in US Dollar):

 

Annual income ($)	Incomes Tax rate
Up to $8,000	13.25%
Up to $12,000	18%
Up to $17,000	23%
Up to $22,000	26%
Up to $28,000	32.75%
Up to $41,500	37%
Up to $54,500	43.5%
Up to $85,000	45%
$85,000 and higher	48%

 

Portugal’s income tax rates per salary.

 

Even though tax income rates in Portugal are quite high, foreigners moving to Portugal can find ways around it by accessing specific tax schemes such as the Non-Habitual Resident status, with taxation or income exemptions of up to 10 years.

Average Portuguese Salary per District

The average salary in Portugal varies according to district (Portugal’s main administrative areas), with Lisbon taking the lead. This is how much the average Portuguese citizen makes in each of the eight cities highlighted in our article on the best places to live in Portugal:

 

District	Average monthly salary ($)
Lisbon	$1,696
Porto	$1,482
Coimbra	$1,421
Madeira	$1,420
Azores	$1,403
Aveiro	$1,396
Braga	$1,346
Faro (Algarve)	$1,314

Average monthly salary per Portuguese district according to Segurança Social.

 

It’s important to keep in mind that the average Portuguese salary per district doesn’t always reflect the average property price. Buying a property in Braga, for example, is usually more expensive than buying a property in the Azores, where the average salary is higher.

If you’re considering working in Portugal, Lisbon is the city where you’ll have a better chance to get a high-paying salary. Before relocating, consider the different advantages of each Lisbon neighborhood.

Why are these salary averages inferior to the ones reported by the OECD?

While the OECD calculated salary averages “by dividing the national-accounts-based total wage bill by the average number of employees in the total economy”, Segurança Social’s numbers are solely based on the social security contributions made by Portuguese workers. This means that, while the OECD took all the wages paid in a given country into consideration, Segurança Social only analyzed salaries as per their corresponding social security contributions.

 

Advantages of Moving to Portugal on a U.S. Salary

All things considered, moving to Portugal as an American citizen can be incredibly beneficial. These are the main pros of relocating to Portugal on a U.S. salary:

• Low cost of living: While the average cost of living in the United States sits between $2,500 and $3,500 per month, a single person can live in Portugal with as little as $715 per month;
• Affordable housing: Rent and property prices are much cheaper in Portugal than in the United States, especially for foreigners who find ways of lowering their mortgage rates;
• Free healthcare: Americans living in Portugal can potentially save thousands by enjoying the country’s free healthcare services;
• Tax benefits: Americans relocating to Portugal can access several tax benefit programs such as the NHR scheme.

 

So, are you ready to make the most of your U.S. salary in sunny, peaceful Portugal?

If the answer is yes, CAFIMO can help you find the real estate loan you need to relocate to one of Europe’s most desirable destinations: