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Portugal
Employing people in compliance with regulations and expanding your business in Portugal can be a challenge.
To assist you, we are offering an overview of key information in Portugal, covering all aspects from national public holidays to employee benefits.
Expanding into Portugal
Key facts
Contract Types
In Portugal contracts can be Permanent (for an indefinite duration), Fixed Term (for a minimum of 6 months and a maximum of 3 years) Indefinite fixed term (e.g. for a project, for a maximum of 6 years) Very Short Term (e.g. seasonal work, for a maximum of 70 days) Part Time, Intermittent (full time for a minimum of 6 months, 4 months being consecutive) Teleworkers (with the same rights as permanent employees but the contract must mention the teleworking arrangements and hours) or Temporary via an agency.
Probation
Probation can be between 90 and 240 days for permanent contracts depending on the role, or from 15 to 30 days for fixed term contracts. A probation period may be excluded by written agreement from both parties, or reduced by collective bargaining agreements.
Working Hours
40 hours, 5 days of 8 hours.
Overtime
125% for the first hour and 137.5% of salary thereafter. Overtime is paid at 150% on holidays and weekends. It should not exceed 2 extra daily working hours with a maximum of 48 weekly hours and 150 hours per year for companies with at least 50 employees, 175 hours per year for companies with more than 50 employees or up to 200 annual overtime hours with a collective labour agreement or force majeure.
Other
New rules were introduced in 2022, with regard to remote working. There must be an agreement in place covering the remote working arrangements and employers should ensure that employees meet management face to face every 4 months. and employers should refrain from contacting employees during rest periods except in case of force majeure.
A workplace evaluation is required in order to ensure that safety, health and hygiene standards are adequate. This is required even if the employees are working from home.
Employees must have a medical check up once they are onboarded. This is usually required every two years. Additionally all employees are entitled to 40 hours of training per year. This can either be provided by an approved external agency or can be done internally but in this case a certification process must be followed involving an approved external agency.
Other Financial
Employees receive a bonus equal to 1 months’ salary in June and November, known as 13th and 14th month bonus which can be paid over the year in 12 instalments with salary. No legal date for payroll, but it must be paid monthly.
Employers are required to pay a tax free allowance to cover the expenses of remote working (eg, internet and electricity). Typical daily rates paid are:
- Electricity Euro 0.10
- Internet Euro 0.40
- Computer cost
- (if not provided) Euro 0.50
Corporation Tax 2024
21%. 14.7% in Madeira and the Azores
Consumption Tax
23% in Continental Portugal, 22% in Madeira and 16% in Azores.
Employers’ Social Security
23.75%
Employers must purchase insurance to cover workplace accidents
Employees’ Contributions: 11%
Income Tax Rates
- Up To 7,703 EUR – 13.25 %
- 7,703 to 11,623 EUR – 18%
- 11,623 to 16,472 EUR – 23%
- 16,472 to 21,321 EUR – 26%
- 21,321 to 27,146 EUR – 32.75%
- 27,146 to 39,791 EUR – 37%
- 39,741 to 51,997 EUR – 43.5%
- 51,997 to 81,199 EUR – 45%
- Over 81,199 EUR – 48%
Additional Solidarity Surcharge
- 2% on incomes over EUR 80,000
- 5% on incomes over EUR 250,000
- For married couples, taxable income is divided by 2
Notice
The notice period required rises with tenure, for example:
- 15 days for less than 1 year
- 30 days for 1 year to 5 years
- 60 days for between 5 and 10 years’ service
- 75 days for over 10 years’ service
For Fixed Term contracts notice of termination of contract must be given by the employer 15 days before expiry or 8 days before expiry date by the employee.
Payment in lieu of notice is allowed.
Termination Process
The reasons for dismissal have to be given in writing. The employee has 10 days to acknowledge or challenge the dismissal and may challenge the dismissal in court. The dismissal notice must be sent to the relevant service under the Ministry of Labour and to the workers’ representative.
For subjective reasons (e.g. gross misconduct) no compensation is required, for objective reasons (economic or structural) compensation is mandatory and equal to 12 days’ base remuneration for each complete year of service, subject to certain caps. Compensation cannot exceed 240 times the minimum wage.
During Probation
After 60 days, notice must be given. If an offer of employment is made which is subsequently rescinded then compensation must be paid.
National Public Holidays: 12
January 1st – 1st Jan
No day given in lieu
Good Friday – 29th March
Day given in lieu N/A
Freedom Day – 25th April
No day given in lieu
Labour Day – 1st May
No day given in lieu
Corpus Christi (Thursday after Trinity Sunday) – 30th May
Day given in lieu N/A
Portugal Day – 10th June
No day given in lieu
Assumption of the Virgin Mary – 15th August
No day given in lieu
Republic Day – 5th October
No day given in lieu
All Saints Day – 1st November
No day given in lieu
Restoration of Independence – 1st December
No day given in lieu
Immaculate Conception – 8th December
No day given in lieu
Christmas Day – 25th December
No day given in lieu
Comment:
Additional holidays are celebrated in different regions.
Paid legal entitlement
22 working days (20 during the first year of employment, but many employers give 22 days). At least 15 must be taken in the year accrued and at least 10 days must be taken consecutively.
Carry over permitted
Employers must allow employees to carry over unused leave until June 30th of the following year and if the leave is still unused then payment must be made in lieu.
Timings
The holiday year runs from January to December and the right to holiday begins on 1 January after employment, though most employers will allow holiday to be taken during the first year.
Payment in lieu allowed
Yes
Sick
After 6 months’ service, employees are entitled to sick leave paid by Social Security. This amounts to 55% – 75% of salary for 1,095 days with the first 3 days being unpaid. Payment rates are 55% for 30 days, 60% for 31 – 90 days, 70% for 91 – 365 days and 75% thereafter. Employers often top this up to 100%. To be entitled to statutory sick pay the employee must have contributed to social security for at least 6 months.
Maternity
New mothers are entitled to 120 days maternity leave, plus 30 days for each additional child born. This is paid at 100% of salary by Social Security. Maternity leave can be extended to 150 days, or 180 days if shared between both parents. The mandatory minimum maternity leave is 6 weeks.
Paternity
New fathers are entitled to 20 days mandatory leave with an additional 5 optional days, which must be taken within 6 weeks from the birth of the child. At least 5 of these days must be taken consecutively immediately after the birth. Paid at 100% by Social Security.
Parental
After the required 6 weeks of maternity leave and 20 days of paternity leave, parents can decide who takes the next 78 – 108 days. If they take 150 days total leave they receive 80% of salary, whilst they receive 100% of salary if the couple take 120 days.
Study
Leave is given for those studying for exams. Employees are entitled to 2 days (the day before and the day of the exam itself).
Marriage
Employees can take 15 calendar days’ paid leave after getting married.
Bereavement
Bereavement leave is 5 calendar days for relatives in 1 degree of relationship and 2 days for 2 degrees of relationship. Paid by the employer.
Other
Employees can take 30 days’ paid leave for urgent care for a child up to 12 years old and 15 days to care for an older family member.
Medical
Competitive employers will provide private medical insurance for employees which complements the state provision.
Life
Group life including long and short term disability are usually provided with a death benefit typically of 24 months’ salary
Pension
Pensions supplementary to the state provision are sometimes provided.
Meal vouchers
Many employers provide a meal allowance. These are tax free up to Euro 6 per day if paid in cash or Euro 9.60 when vouchers are provided.
We make expansion in Portugal simple
Employing people compliantly across international borders can be challenging but we make it simple, bringing down barriers and making light work of the complexities. We offer the full range of compliant global expansion solutions so that wherever, whenever and however you want to employ people, we can support you.
EOR Services
Employ people compliantly in 180+ countries – without setting up new entities. We’ll shoulder responsibility as Employer of Record (EOR), making sure all your international employment is fully compliant.
We can also take care of your global HR from multi-country payroll to onboarding and offboarding.
Payroll Solutions
Getting global payroll right is one of the hardest challenges for any business expanding into new countries. We can shoulder this burden, freeing up valuable in-house resource to focus on growing your business.
Consider us an extension of your HR team, ready to answer all your questions large and small.
Global Mobility
Mobilise your people across borders with ease. Relocating to work abroad can feel daunting. But with Leap29 at your side, your employees can feel safe and supported.
We’ll guide your employees through the complexities of working in another country, helping them settle in fast.
Entity Services
Follow the opportunities to grow your business – wherever they take you.
We lighten the load of establishing and managing foreign entities and can help you solve all your entity challenges from running compliant, accurate multi-country payroll to local accounting and financial reporting.
PEO Solutions
Employ international talent wherever and whenever you need it – and enjoy the peace of mind of knowing you’re fully compliant. Our Professional Employer Organisation (PEO) services allow you to focus on growing your business while we handle compliance, multi-country payroll and your global HR.
Support & Advisory
The help you need to make your global growth effortless – trusted guidance and advice on your expansion challenges large and small.
HR Support
When you’re employing people in lots of different countries, answering just a simple query can take a disproportionate amount of time for your in-house HR team. Our HR Support service reduces this burden, saving you time and money and giving you the confidence of knowing your employees are well looked after, whatever their location.
Contractor Payroll
Enjoy compliant contractor payroll that meets all local requirements for tax, social security and employment legislation. We understand the importance of compliant contractor payroll to the success of your business and will pay your contractors on time, every time.
Start hiring today – and onboard within hours.
Pricing
Budget confidently with transparent, competitive fees and no hidden costs.
Want us to shoulder employer liability and take care of your global HR through our EOR solution? No problem. Just want global payroll? You can have that too. Pick the solutions that your individual business needs.
We’re a people business with employee management software, not a software business that works in employee management!
At Leap29 we offer access to the latest technology and software to easily and effectively manage your employees from anywhere in the world.
Our bespoke online portal LeapForward helps ensure a smooth onboarding process, manages monthly payroll and easily facilitates additional bonuses and expenses. By streamlining your processes through our online portal, it will help you attract and retain great talent and take the pain out of payroll management.
Integrated fully with our global EOR services, LeapForward comes at no additional cost to you but is guaranteed to save you time and money whilst simplifying your employee management procedures.
Portugal
Expansion Resources
Want to learn more about employment and expansion into Portugal?
Check out our Portugal resource pages below for more information about the employment market in Portugal.
Our Recruitment Services
A global recruitment partner you can trust
We solve global recruitment challenges for businesses large and small. Whether you’re building out a new team, expanding into another country or looking for a confidential executive level hire, you can trust us to deliver.
Need 80 contractors in Brazil? Looking for just one very special permanent hire? Want us to take care of your global HR? It’s all in a day’s work at Leap29.
Whatever and wherever your mandate, we can help.
Permanent Recruitment
Connect with great permanent talent to drive your business forward. We help you find both key strategic hires to lead organisational growth and project specialists to deliver on deadlines and budgets.
Workforce Management
Reduce the complexity of managing workers in different countries and save yourself time, energy and money.
Local expertise, global reach
Employ people compliantly in 180+ countries – with or without your own foreign entities. We can help you set up and manage foreign entities – or act as an Employer of Record. We can also help with multi-country payroll and all your HR management. Wherever, whenever and however you want to employ people, we can help.
180+
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Talk to an expert today
Whatever stage you’re at in your global expansion journey, we can help.
Contact us today to see how Leap29 can be the trusted partner that supports your global expansion.