Effortless Hiring in Portugal

Employment Contracts

• While not mandatory, it is advisable for employers to provide written employment contracts that detail:
• Job responsibilities.
• Compensation.
• Working hours.
• Leave entitlements.
• Termination conditions.
• Employers must provide a written statement of core terms within five days of the employee starting work, with a comprehensive contract provided within one month.

Probationary Period

• The probationary period typically lasts up to 90 days for most employees and can extend to 180 days for positions of technical complexity or high responsibility. During this period, either party can terminate the employment without cause, provided a seven-day notice is given.

Payroll Frequency

• Employees are generally paid on a monthly basis, with payments made before the last day of each month.

Minimum Wage

• As of 2024, the national minimum wage is set at €820 per month, based on a standard 40-hour workweek.

Overtime

• Standard working hours are typically eight hours per day and 40 hours per week. Overtime is compensated as follows:
• 125% of the regular hourly rate for the first hour on a working day.
• 137.5% for subsequent hours on a working day.
• 150% for each hour worked on a rest day or public holiday.

Employee Contributions

1. Social Security: Employees contribute approximately 11% of their gross salary to social security.

Employer Contributions

1. Social Security: Employers contribute approximately 23.75% of the employee's gross salary.
2. Labor Accident Insurance: Approximately 1.75% of the employee's gross salary.
3. Wage Guarantee Fund (WGF): Approximately 1% of the employee's gross salary.

Personal Income Tax (IRS)

• Portugal employs a progressive income tax system with rates ranging from 13.25% to 48% depending on income levels.

Types of Leave in Portugal

1. Annual Leave

• Employees are entitled to a minimum of 22 working days of paid annual leave per year.

2. Sick Leave

• Employees are entitled to paid sick leave, compensated by Social Security as follows:
• 55% of the salary for up to 30 days of sick leave.
• 60% for sick leave from 31 to 90 days.
• 70% for sick leave from 91 to 365 days.
• 75% beyond one year.

3. Maternity Leave

• Female employees are entitled to 26 weeks of maternity leave after one year of service, with at least 15 weeks paid by social security and the remaining unpaid. For service less than one year, entitlement is typically 15 weeks of paid leave.

4. Paternity Leave

• Male employees are entitled to up to 5 days of paid paternity leave.

5. Other Leave

• Employees are entitled to:
• 15 consecutive days of paid marriage leave.
• Up to 5 consecutive days for bereavement due to the death of a close family member.

Mandatory Benefits

1. Christmas and Holiday Bonuses: Employees are entitled to a 13th and 14th salary, paid respectively in June and December.
2. Health Insurance: While not mandatory, many employers offer private health insurance as an additional benefit.

Notice Period

• The notice period required for termination varies based on length of service:
• Less than 1 year: 15 days' notice.
• Between 1 and 5 years: 30 days' notice.
• More than 5 years: Notice periods can extend up to 75 days.

Severance Pay

• In cases of redundancy or unsuitability, employees are entitled to severance pay equivalent to:
• Twelve days' base salary per year of service, with specific caps based on length of service.

Protected Employees

• Pregnant women, recent mothers, and employees on parental leave have additional protections against dismissal.