New analysis from the Bank of Portugal shows that the national minimum wage reached 91% of the median salary in 2025, leaving a difference of less than €90 between the two figures.

The median salary, the point at which half of workers earn more and half earn less, stood at €958.80 in 2025, while the minimum wage rose to €870 following a 6.1% increase.

Over the past decade, Portugal’s minimum wage has generally grown faster than typical earnings, steadily narrowing the gap between lower-paid workers and the middle of the wage scale.

According to data cited by the Bank of Portugal, the ratio between the minimum wage and the median wage has risen from 87% in 2019 to 91% this year.

The trend has contributed to a significant reduction in wage inequality. The central bank noted that Portugal has seen a marked narrowing in the difference between the country’s highest and lowest earners over the last 15 years.

Figures show the gap between the top 10% and bottom 10% of earners has fallen substantially since 2010, helping place Portugal among the Eurozone countries with the lowest levels of wage inequality.

However, the Bank of Portugal has also highlighted potential challenges associated with an increasingly compressed wage structure.

While higher minimum wages can improve living standards and social cohesion, the bank warned that reducing the distance between entry-level pay and median earnings may raise questions about career progression, incentives and long-term productivity growth.

The report suggests policymakers will need to balance efforts to improve wages with measures that support skills development, innovation and economic competitiveness.

Portugal already records one of the highest minimum wage-to-median wage ratios in the euro area, reflecting the country’s strategy of steadily increasing lower incomes while seeking to reduce disparities across the labour market.

The debate now centres on how to continue improving living standards while encouraging productivity gains that can support sustainable wage growth across all sectors of the economy.