Hire employees and contractors in Portugal

Remote’s guide to employing in Portugal.

  • Capital city

    Lisbon

  • Currency

    Euro
    (, EUR)

  • Population size

    10,276,617
    (2018 est.)

  • Languages spoken

    Portuguese

Facts & Stats

Portugal, officially the Portuguese Republic (Portuguese: República Portuguesa) is a country located mostly on the Iberian Peninsula, in southwestern Europe. It is the westernmost sovereign state of mainland Europe, being bordered to the west and south by the Atlantic Ocean and to the north and east by Spain. Its territory also includes the Atlantic archipelagos of the Azores and Madeira, both autonomous regions with their own regional governments.

  • Capital city

    Lisbon

  • Currency

    Euro
    (, EUR)

  • Languages spoken

    Portuguese

  • Population size

    10,276,617 (2018 est.)

  • Ease of doing business

    Very easy

  • Cost of living index

    $$$ (56 of 139 nations)

  • Payroll frequency

    Monthly

  • VAT - standard rate

    23%

  • GDP - real growth rate

    2.145% (2018 est.)

Grow your team in Portugal with Remote

Employing in Portugal requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. The complexity of employment regulations in Portugal makes full compliance with employment laws a burdensome process.

Through Remote’s Global Employer of Record solution, your team is employed by our local legal entities in each country, and we take care of payroll, tax, benefits and compliance so you can focus on what matters most -- your people.

Risks
of misclassification

Portugal, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification.

Employing in Portugal

Portuguese labour law is not contained under a single law. The main sources are the Portuguese Constitution which sets forth fundamental rights and principles regarding both employees and employers, European legislation, the Portuguese Employment Code and the Regulation of the Employment Code. Furthermore, collective bargaining agreements as well as individual agreements also play a role.

The vast majority of rules stipulated by the Portuguese Employment Code are mandatory and cannot be modified either by collective bargaining or agreement of the parties. All workers in Portugal are protected by Portuguese employment law.

Public holidays

Date
Holiday Name
Extra information
Saturday, January 1, 2022New Year's Day
Wednesday, February 16, 2022Carnival DayObserved; however not an official holiday
Friday, April 15, 2022Holy FridayVary every year
Sunday, April 17, 2022Easter SundayVary every year
Monday, April 25, 2022Freedom Day
Sunday, May 1, 2022Labour Day
Friday, June 10, 2022Portugal Day
Thursday, June 16, 2022Body of God,Corpus Christi
Monday, August 15, 2022Assumption Day of Our Lady
Wednesday, October 5, 2022Implementation of the Republic
Tuesday, November 1, 2022All Saints Day
Thursday, December 1, 2022Restoration of Independence Day
Thursday, December 8, 2022Day of Immaculate Conception,Labour Day
Sunday, December 25, 2022Christmas Day

Minimum Wage

Minimum Wage: €741 per month in 12 payments; €635 per month in 14 payments for full-time workers, rural workers, and domestic employees ages 18 and older.

Payroll Cycle

For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.

In Portugal, employees get 14 months of salary payments each year:

  • 12 months of work
  • 1 Holiday allowance
  • 1 Christmas allowance

The allowances are paid with the same amount as a full month's salary.

Both the Subsídio de Férias (Holiday Allowance) and the Subsídio de Natal (Christmas Allowance) get taxed the same as any other payment for IRS & Social Security.

Employees can choose to earn their salary in 14 payments, with the holiday allowance being paid during Summer and the Christmas allowance being paid around the Christmas period.

Conversely, workers can elect to be paid 12 times ("duodécimos"), with those two extra payments being pro-rated throughout the year.

The payments have to be paid at least once a month and by the last working day. At Remote, this payment is made on the 25th of the month.

Onboarding Time

We can help you get a new employee started in Portugal fast. The minimum onboarding time we need is only 9 working days.

Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.

For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.

Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.

Competitive benefits package in Portugal

Besides providing your employees with all statutory benefits in Portugal, Remote can advise on and arrange for custom benefits and perks for your employees upon request.

  • Medical insurance plan
  • Dental insurance plan
  • Vision insurance plan
  • Additional paid holidays
  • Flexible work schedule
  • Pension scheme
  • Life insurance
  • Other insurance

Taxes in Portugal

Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Portugal.

  • Employer

    • 23.75% - Social Security

    • 1.75% - Labour Accident Insurance

    • 1.00% - Wage Guarantee Fund (WGF)

  • Employee

    • 11% - Social Security

    • 14.5% - Up to 7,112

    • 23.0% - 7,112-10,732

    • 28.5% - 10,732-20,322

    • 35.0% - 20,322-25,075

    • 37.0% - 25,075-36,967

    • 45.0% - 36,967-80,882

    • 48.0% - 80,882 and above

    • Portugal collects an additional solidarity rate between 2.5-5% on income that exceeds €80,000.

Types of leave

Statutory leave

By law, full-time workers in Portugal are entitled to 22 days of holiday leave per year.

Pregnancy and maternity leave

Expecting mothers are entitled to up to 30 days of pregnancy leave before the birth and at least 6 weeks mandatory weeks after the birth of the child, between 17 and 21 weeks, for which the first 6 weeks after the birth are mandatory for the mother. The remaining 11 or 15 weeks can be shared between the parents.

Parental/paternal leave

Partner/paternity leave is up to 20 days, of which 10 days are compulsory within 30 days of the birth of the child and 5 days mandatory immediately after birth.

Other leave

  • Adoption or foster leave: upon adoption of a child under the age of 15 or have taken in a foster child, employees are entitled to the same amount of leave as under parental/maternity/paternity/partner leave.
  • Emergency and short absence leave: intended for unforeseen personal circumstances for which an employee has to take time off immediately. Examples include making arrangements for the care of a sick family member or in the event of a death in the family.
  • Unpaid leave: the employee may take unpaid leave in consultation with the employer on a full-time or part-time basis. There is no legal requirements to unpaid leave.
  • Special or extraordinary leave: may include leave for giving official notice of an intended marriage, marriage of a family member, moving house, funeral of a family member, a service or wedding anniversary, an interview or for consulting a doctor.

Employment termination

Termination process

Termination of the employment relationship can happen in the following ways:

  • Voluntary termination by the employee (resignation);
  • Retirement as per the employment contract;
  • Non-renewal of the employment contract or expiry;
  • Termination with just cause and no indemnity, for example in the case of theft or any other serious misconduct;
  • Collective dismissal due to economic reasons (f.ex. bankruptcy, restructuring, etc.); or
  • Termination by mutual consent.

Notice period

For an employee that has worked for less than 6 months, the notice period is 15 days, for between 6 months and 2 years it is 30 days and for employment longer than 2 years it is 60 days.,

Probation periods

The duration of probation periods depends on the contract type. For contracts of indefinite duration, the statutory standard is 90 days. For positions that are technically complex, with high levels of responsibility, require special qualifications or in a position of trust it may be extended to 180 days. For fixed-term contracts probation periods are 30 days if contract duration is longer than 30 days and 15 days if shorter than six months.

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