In 2026, violation of Article 202 of the Labour Code — the obligation to record working times — is a serious administrative offence. Fines start at €612 for micro-businesses acting negligently and can reach €9,690 for large companies acting with intent. The Reference Unit stands at €102 this year. In practice, a typical SME caught without records can expect a fine between €1,000 and €3,000 for a first offence. This article shows the exact figures and how to avoid them.

How fines are calculated

To understand the figures, you need to understand two things: the Reference Unit and the company size brackets.

The Reference Unit (UC) is the legal reference for all fines in Portugal. In 2026, it is set at €102 by Law no. 73-A/2025 which approved the State Budget. It has been frozen since 2023 and will remain so in 2026.

The company size brackets are divided by annual turnover:

• Under €500,000
• Between €500,000 and €2.5 million
• Between €2.5 million and €5 million
• Between €5 million and €10 million
• Over €10 million

In addition, each fine has two possible values: negligence (what happens when the company forgot, did not know, or had a procedural failure) and intent (intentional non-compliance, which is rare but does exist).

The fines table for 2026

For serious offences — which is where most time tracking violations fall:

For very serious offences — when there are aggravating circumstances (intentional alteration of records, for example):

Two traps in the size brackets

The law has two details that many companies are unaware of, which can push up the final amount.

First: if the company does not declare its turnover when the ACT requests it, the highest bracket (over €10M) is automatically applied, with the highest fines. In other words, trying not to cooperate with this information can be costly. Short answer: provide the actual turnover, with accounting proof.

Second: in the first year of activity, the limits of the smallest company bracket (under €500,000) always apply, regardless of projected turnover. Legal protection for start-up companies.

What costs more: negligence or intent

Negligence means: the company should have done it, did not, but it was not intentional. Forgetfulness, procedural failure, ignorance of the law. This is the case for most offences.

Intent means: the company knew it was violating the law and did it anyway. Altering records after an ACT visit, falsifying documents, employees declared as trainees when they are permanent staff. Serious cases.

The difference between the two, in practice, is values two to three times higher. For an SME with turnover under €500,000:

• Negligence: €612 to €1,224
• Intent: €1,326 to €2,652

It is double for the same offence, just because the ACT managed to prove intent.

Three real calculation examples

To make this concrete, three common scenarios:

Scenario 1: Bakery with 8 employees, turnover €350,000, no records for the past 3 years

First offence, presumed negligence. Bracket: under €500,000. Expected fine: €612 to €1,224, probably near the minimum if they cooperate and correct quickly.

Scenario 2: Workshop with 25 employees, turnover €900,000, incomplete records in a shared Excel with subsequent edits

Here the ACT can classify it as very serious (due to record alteration) or as serious with an aggravating factor. Bracket: €500,000 to €2.5M. If classified as serious: €714 to €1,428. If it becomes very serious, it rises to €3,264 to €8,160. The difference depends on what the ACT decides, which largely depends on your behaviour during the inspection.

Scenario 3: Logistics company with 80 employees, turnover €2.8M, accumulated missing mandatory training and unrecorded overtime

Two serious offences in parallel. Bracket: €2.5M to €5M. For each offence: €1,020 to €2,040 for negligence. Possible total between €2,040 and €4,080, plus the aggravation for multiple offences.

Reductions and increases

Two legal mechanisms alter the final fine amount.

25% reduction for voluntary payment. When you receive the fine notification, you have 15 days to pay with a 25% reduction. If payment is made within this period, you waive the right to defence but pay less. For low fines, it is worth paying and forgetting about it. For high fines, it may be worth contesting.

Increase for repeat offending. If in the previous 5 years there was already a conviction for a serious or very serious administrative offence, the minimum and maximum limits rise by 1/3. In addition, the new fine cannot be lower than the previous one. Repeat offending is costly.

The hidden cost: far beyond the fine

The fine is what you see. But there are additional costs that many companies only discover afterwards:

• Manager's time. An inspection followed by administrative proceedings takes between 20 and 60 hours of management time (gathering documents, responding, following up). At €25/hour of internal cost, that is €500 to €1,500 additionally.
• Consultancy or lawyer costs. If the case is complex or the fine is high, legal advice typically costs between €1,000 and €5,000 to see a process through to the end.
• Internal reputation. The team knows when the company was fined for labour matters. The atmosphere changes. Employees start questioning other practices. It is difficult to quantify but it is real.
• External reputation. ACT decisions are published. They appear in public databases. Competitors know. Institutional clients doing due diligence know too.

To understand exactly what the law requires, read what Article 202 says about time tracking. If you have already received a letter, see how to prepare your company for an ACT inspection.

Adding everything up, a €2,000 fine rarely costs just €2,000. Typically it costs between €4,000 and €8,000 in total impact.

The prevention calculation

Against all of this, the cost of an automated time tracking system for the same SME is around €118 per year on the simplest plan. The maths is obvious.

But even ignoring the cost of the fine itself, there are obvious benefits to having automatic digital records: the time saved in monthly consolidation, transparency with employees, the ease of exporting to the accountant. Compliance is the bonus, not the main goal.

Picco solves all three points at once: tamper-proof records, stored for the legal 5 years, exportable at any time. For most Portuguese SMEs, it costs less than an average fine. You can learn more at picco.damastor.com

In summary

ACT fines for time tracking failures in 2026 range from €612 to €9,690 for serious offences, and can exceed €30,000 for very serious ones. Most SMEs that pay fines in these matters receive amounts between €1,000 and €3,000, depending on size and cooperation during the inspection.

The comparative calculation is simple: a year of an automated system typically costs less than the minimum fine. Without considering the hidden costs of time, consultancy, and reputation.

If you still think the ACT 'won't show up', the maths is no longer in your favour in 2026.

Figures based on Article 554 of the Labour Code and Law no. 73-A/2025 (State Budget 2026). This article is for informational purposes only and does not replace specialist legal advice.