While there's no obligation to tip in Portugal, it's also important to remember that when you do leave a tip, it's essential to use cash euros (the European currency), so the recipient of your tip can easily use the money without having to make a special trip to a bank (and then pay a transfer fee).
Tip in the local currencyOtherwise you'll leave your service providers with cash they can't use without paying high fees on currency exchange. Prepare some small change in the local currency before leaving the airport if you can, to tip drivers and hotel porters.
Tipping is not mandatory, and you should only do so if you feel comfortable about it and if you want to reward truly exceptional service. Tipping for great service is very much appreciated.
The currency for Portugal is the Euro. In the ALGARVE region you can buy/exchange Euros very easily at Cambios (Bureaux de Change or Change Shops), Hotels and even shops. Many banks no longer offer foreign exchange however. The best rates and commissions are normally found at the bureaux in larger towns.
Dinner Time in Portugal (7 p.m. to 10 p.m.)The best time to have dinner in Portugal is between 8 p.m. and 9 p.m. While some restaurants will open at 7 p.m., most of them will still be empty at that time. There are a few exceptions of course, especially if it's a famous restaurant like Cervejaria Ramiro.
It's generally safe and healthy to drink the public tap water across Portugal. Get a water filter such as TAPP 2 to improve the taste and reduce the risk of contaminants. Avoid plastic bottled water in Portugal as most plastic doesn't get properly recycled. Get a high quality reusable water bottle like TAPP.
Tipping servers in restaurants and cafés in Spain, while appreciated, isn't mandatory. It's tough for Americans to get used to not leaving a tip, but locals generally don't leave anything extra at all in more casual eateries. In fine-dining restaurants, a tip may already be included in the check.
You should tip your taxi driver at least 15 to 20% of your trip fare. If you think of giving anything less than 10%, you might as well leave without tipping at all. If your fare is less than $10, leave a tip of not less than a dollar. Something like a 50-cent tip is insulting and more of a hassle to come up with.