Employment in Portugal at a glance
Capital
Lisbon
Language
Portuguese
Remote workers
293,400
Currency
€ Euro (EUR)
Working hours
40 hours per week
Public holidays
13 days per year
Minimum monthly salary
€920
Tax year
Jan 1 - Dec 31
Date format
DD/MM/YYYY
Misclassification penalties
Fines between €2,040 and €9,690 plus retroactive social security contribution and risk of director's personal liability for each employee misclassification.
Fun fact
Portugal has a set list of approved names that parents can give their children.
Taxes in Portugal
Employer contributions
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Employer tax: 26.5%
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Social insurance: 23.75% (22.3% for nonprofit companies)
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Labour Accident Insurance: 1.75%
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Wage Guarantee Fund: 1%
Employee contributions
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Employee tax: 25.5% - 64%
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Social insurance: 11%
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Solidarity tax: 2.5% for taxpayers with an aggregated taxable income between EUR 80,000 and EUR 250,000
Income tax
Gross income: Up to €8,059
Tax rate: 12.50%
Gross income: €8,060 - €12,160
Tax rate: 16%
Gross income: €12,161 - €17,233
Tax rate: 21.50%
Gross income: €17,234 - €22,306
Tax rate: 24.40%
Gross income: €22,307 - €28,400
Tax rate: 31.40%
Gross income: €28,401 - €41,629
Tax rate: 34.90%
Gross income: €41,630 - €44,987
Tax rate: 43.10%
Gross income: €44,988 - €83,696
Tax rate: 45%
Gross income: More than €83,696
Tax rate: 48%
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Employer of Record in Portugal
What is an EOR?
An Employer of Record is the legal employer of a worker in Portugal. As such, the Employer of Record takes care of all Portugal compliance aspects of employment, including payroll, taxes, statutory benefits, employment contracts and more.
EOR responsibilities
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Ensuring their employment is compliant with local employment laws
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Processing local payroll
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Filing employment related taxes and returns
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Issuing payslips to the employee
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Distributing salary payments
How it works
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Company
Maintains a direct relationship with the employee, allocates them work tasks, and manages their performance.
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Boundless
Takes care of payroll, taxes, benefits, ensuring the employee and the company are compliant with all legal regulations.
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Employee
The third party to the agreement, the employee, fulfils all of their obligations as a worker for the company.
Benefits in Portugal
Statutory benefits in Portugal
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Christmas and holiday subsidies
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Basic insurance by the national system
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Wage guarantee fund
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Workers compensation insurance
Common non-mandatory benefits in Portugal
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Meal vouchers
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Public transportation allowance
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Supplementary pension
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Supplementary health & life insurance
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Commission
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Flexible working hours
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Covering phone bills
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Gym membership
Rights & protections in Portugal
Employment agreement signed by both the employer and the employee
Payslip
Special rights and protections during pregnancy
Safe place of work
Whistleblower protection
Redundancy payment
Professional training
Right to set up Works Council
Pay transparency
Leave in Portugal
Paid time off
22 days + public holidays
Sick leave
1,095 days
Maternity leave
between 120 and 150 consecutive days
Paternity leave
28 days
Parental leave
120-150 days
Employment conditions in Portugal
Probation
Typically 90 days but can be extended to a maximum of 240 days.
Payments in Portugal
Payment frequency
According to employment regulations in Portugal, the payment frequency is monthly.
Payday
Pay day is usually on the last working day of the month.
End of employment in Portugal
Employment terminations agreed upon between a Portugal employer and Portugal employees are relatively simple. Terminations initiated by employers are a bit more complicated and require a valid reason, disciplinary procedure and compensation corresponding to 12 days of basic pay and seniority allowances for each year of service. But most employees negotiate higher severance, especially in the case of a mass lay-off. There are different notice periods which depend on the number of years of service. Dismissed employees may file a claim before a labour court.
FAQs
There are four main routes to hiring in Portugal. You can run payroll from your HQ for short-term cases, engage contractors for project-based work, set up a local entity to hire directly, or partner with an Employer of Record. Each option carries different compliance, cost, and administrative effort. An EOR allows compliant Portuguese employment without setting up a local entity.
Contractors work well when the relationship is project-based and the person serves multiple clients. If an individual gives their full and undivided attention to your company in Portugal, employment is the right structure under Portuguese law, covering entitlements like paid annual leave, sick leave, and social security contributions. For project-based contractor engagements, Boundless’s Agent of Record (AOR) service handles classification, contracts, and payments compliantly in Portugal.
HR compliance in Portugal means your policies and procedures respect all applicable Portuguese employment laws and regulations. When you hire in Portugal, this matters both to safeguard employee rights and to reduce employer risk. Compliance covers labour law, sick leave, annual leave (22 days), minimum wage (€920/month), tax credits, and a 40-hour working week. Following these is fundamental for running the business well.
An Employer of Record is the legal employer of the individual in Portugal for government, tax, and employment purposes. It provides a locally compliant contract, runs payroll, files employment taxes, and manages statutory benefits such as 120-150 days of maternity leave and 22 days of annual leave. You remain responsible for sourcing workers, managing day-to-day work, and funding payroll each cycle.
Boundless partners with employment lawyers and advisers in each country we operate in, including Portugal. They ensure employment contracts and onboarding documents comply with the local jurisdiction. We hold detailed discussions on specific norms such as payroll, social protection, data protection, notice periods, and work-from-home regulations. When a sensitive issue arises, our internal team engages the relevant firm promptly.
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