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An employer in Portugal can reimburse employees for using a personal vehicle for business journeys. An example of a business journey is a client visit.

There is a maximum mileage allowance per kilometer that the employer can reimburse tax free. This maximum amount depends on the type of vehicle and is defined by the Decree-Law no. 106/98 of 24 AprilOrdinance no. 1553-D/2008, of 31 December, article 4, no. 4 of Decree-Law no. 137/2010, of 28 December and Circular DGCI 19/93, of 20 August. The last update to the maximum rates was in 2010.


Type of transport Per kilometer allowance
Car €0,36
Non-automotive motor vehicle €0,14
Public transport €0,11
Rental car (1 employee) €0,34 (each)
Rental car (2 employees) €0,14 (each)
Rental car (3 employees) €0,11 (each)


The employer can decide to pay a higher rate per kilometer. However, the part exceeding the defined rates will be considered part of the employee’s taxable income.

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