Employer of Record in Portugal

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Effortless hiring in

Portugal

Portugal, located on the Iberian Peninsula, is known for its historic cities, dramatic coastlines, and rich maritime history. Lisbon, its capital, is famous for its colorful streets, Fado music, and tram rides. The Algarve region is renowned for its golden beaches, while Porto is the birthplace of Port wine. Portugal’s history as a global maritime power is reflected in monuments like the Belem Tower. Its cuisine, including pastel de nata and bacalhau, is beloved worldwide.

Languages

Portuguese

Population

10.2 Million

Capital City

Lisbon

Currency

Euro (EUR)

Cost of living ranking

50th

VAT (Value Added Tax)

23%

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 Management in

Portugal

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.

Taxation in

Portugal

Employee Contributions

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

Employer Contributions

Social Security: Employers contribute approximately 23.75% of the employee's gross salary.
Labor Accident Insurance: Approximately 1.75% of the employee's gross salary.
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.

Leave in

Portugal

Types of Leave in Portugal

Annual Leave

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

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.

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.

Paternity Leave

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

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.

Benefits in

Portugal

Mandatory Benefits

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

Termination in

Portugal

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.

ON THIS PAGE

Overview

Hiring

Payroll

Taxes

Leave

Benefits

Termination

Employment Contracts

Probationary Period

Payroll Frequency

Minimum Wage

Overtime

Employee Contributions

Employer Contributions

Personal Income Tax (IRS)

Types of Leave in Portugal

Mandatory Benefits

Notice Period

Severance Pay

Protected Employees

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