The essentials in 30 seconds

In Portugal, overtime refers to hours worked beyond the agreed normal schedule. They must be paid with a premium (or compensated with rest), are subject to legal limits, and must be recorded. The employer cannot simply ask for 'a bit more' without formal consequences.

What counts as overtime

• Contract provides for 8h/day, worked 9h → 1 hour overtime
• Normal 40h week, worked 45h → 5 hours overtime
• Mandatory public holiday worked → counts as overtime with a special premium
• Weekly rest day (typically Sunday) → special premium

For a solid grounding in what the law requires, read Article 202 and time tracking.

Legal limits

Up to 50 employees: 175h/year | Medium/large: 150h/year | Collective agreement: up to 200h/year | Per normal day: 2h | Weekly max (normal + overtime): 60h

Exceeding these limits is a serious administrative offence for which the employer is responsible.

How to calculate payment

Hourly rate formula: Hourly rate = Monthly salary ÷ (52 × weekly hours ÷ 12)

Example: Salary of €900/month, 40h/week → 900 ÷ 173.33 = €5.19/hour

Legal premiums:

1st overtime hour (normal day): +25% | Subsequent hours (normal day): +37.5% | Supplementary rest day (Sat): +50% | Mandatory rest (Sun) or holiday: +100%

Example: 1 overtime hour on a normal day at €5.19 = 5.19 × 1.25 = €6.49

The alternative: compensatory rest

Instead of payment, compensatory rest may be granted — especially useful in companies with a time bank

• Sunday/public holiday work → compensatory rest of equal duration
• Overtime on a normal day → 25% compensatory rest (4 overtime hours = 1 rest hour)

Compensatory rest must be taken within the following 3 months.

When the employee may refuse

• The annual legal limit has been reached
• Compelling family reasons are invoked
• Adequate advance notice was not given
• An approved schedule reduction or exemption is in place

To learn more about this right, read what happens when an employee refuses overtime

The role of time tracking

Without a record there is no proof. If overtime was worked and there is no record, claiming payment is very difficult. To correctly calculate the hour balance at month-end, read how to calculate your employees' hour balance

With Picco, the system automatically identifies hours beyond the normal schedule and generates reports broken down by overtime type — ready to use in payroll.