LAW NO. 42/2016, DECEMBER 28 

On December 28, 2016, Law no. 42/2016 was published in the Portuguese Official Gazette (Diário da República), approving the State Budget for 2017.

As set forth in Article 274 of such Law, in 2017 the fractioned payment of the Christmas and vacation allowances will remain in force, meaning that 50 % of those allowances must be paid in twelfths throughout the year, unless the employees expressly choose its full payment. 

In case the employees choose full payment of the Christmas and vacation allowances, such communication must be made within 5 days after the State Budget comes into force, i.e., until January 6, 2017. 

Regarding employees with term employment contracts and temporary employees, unless the fractioned payment is agreed in writing with the employer, the applicable regime is the full payment of the referred allowances.