The cost of employing a worker in Madeira climbed 7.0% in the third quarter of 2026, compared with the same quarter of 2025. The Regional Directorate of Statistics of Madeira (DREM) released the figure on Friday. The index is based on the region's Labor Cost Index, adjusted for the number of working days.
Two components drove the increase. Wage costs, measured per hour actually worked, climbed 7.0% over the year. Non-wage costs, also measured per hour worked, rose slightly more, at 7.1%.
| Component | Madeira (RAM) | Portugal |
|---|---|---|
| Overall labor cost index | +7.0% | +5.3% |
| Wage costs per hour worked | +7.0% | +5.3% |
| Non-wage costs per hour worked | +7.1% | +5.3% |
Non-Wage Costs Climb 7.1 Percent, Just Ahead of Wages
Wage costs cover base pay, regular bonuses and subsidies, and irregular ones such as the holiday and Christmas subsidies. They also include year-end profit-sharing, overtime pay and payment in kind.
Non-wage costs cover severance payments and employers' legal contributions, such as social security and workplace accident insurance. They also include voluntary benefits like supplementary pensions, health insurance and sick-pay top-ups.
DREM said the year-on-year change was explained by two factors. Average costs per worker rose, while the number of hours actually worked per worker fell.
National Labor Cost Index Rises Only 5.3 Percent
Nationally, the labor cost index rose 5.3% over the same period. That is more than a percentage point below Madeira's increase. Portugal's wage costs and non-wage costs both rose 5.3%, unlike in Madeira, where the two components moved at slightly different speeds.
Average Monthly Pay Reaches €1,558 in Madeira
DREM published a second, related release on Friday, covering average pay in the region for the same quarter. Workers in Madeira earned €1,558 a month on average, 5.0% more than a year earlier.
Regular pay, which excludes irregular bonuses, rose 5.5% to €1,375. Base pay climbed 5.4% to €1,320. After accounting for inflation, the real gains were smaller: total pay rose 0.5%, regular pay 1.0% and base pay 0.9%.
| Value | YoY Nominal | YoY Real | |
|---|---|---|---|
| Total pay | €1,558 | +5.0% | +0.5% |
| Regular pay | €1,375 | +5.5% | +1.0% |
| Base pay | €1,320 | +5.4% | +0.9% |
The figures cover 112,700 jobs in the region, 0.2% more than a year earlier. The count includes Social Security beneficiaries and Caixa Geral de Aposentações subscribers at companies based in Madeira.
Madeira Pay Stays 8.1 Percent Below Mainland Average
Madeira's average pay remained well below the national figure of €1,696, a gap of 8.1%. Pay grew at a similar pace on both sides. The national average rose 4.9% in nominal terms, or 1.5% once inflation is factored in.
Electricity, gas, steam and air conditioning supply paid the most of any sector, both regionally and nationally. Average pay there reached €3,502 in Madeira and €3,076 across Portugal.
Firm size also mattered. Madeira employees at companies with 100 to 249 workers earned the most, €1,816. Nationally, the best-paid bracket was companies with 250 to 499 workers, at €1,945.
Private Sector Pay Rises 5.6 Percent, Ahead of Public Wages
Pay in Madeira's private sector rose 5.6% to €1,397. That was faster than the 4.0% increase in public administration, where average pay stood at €2,033.
Nationally the pattern was similar. Private pay rose 5.1%, while public pay rose 4.1%.
Administrative Services Pay Surges 9.2 Percent Annually
By economic activity, the steepest pay increases were in administrative and support services, up 9.2%. Construction followed, up 7.7%.
Among companies grouped by size, those employing 50 to 99 workers posted the largest gain, 8.9%. Firms with 5 to 9 workers rose 6.6%.
Pay in low-technology industrial firms rose 7.4%. In firms providing less knowledge-intensive services, it rose 6.8%.
| Category | Change |
|---|---|
| Administrative & support services | 9.2% |
| Firms with 50-99 workers | 8.9% |
| Construction | 7.7% |
| Low-tech industrial firms | 7.4% |
| Low-knowledge-intensity services | 6.8% |
| Firms with 5-9 workers | 6.6% |
| Private sector | 5.6% |
Source: estatistica.madeira.gov.pt
Source: estatistica.madeira.gov.pt
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