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Hiring in Portugal‌

Hiring employees compliantly in Portugal‌ means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Portugal‌ so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Portugal‌; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Need assistance hiring in Portugal‌? Contact us about our International EOR  Service

Labor Laws in Portugal‌

Employment laws in Portugal‌ are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Portugal‌ employment laws and Portugal‌ policies here.

Employee Probation Period

  • In fixed-term contracts of employment for 6 months or more the probation period is 30 days. 
  • In fixed term contracts of employment for less than 6 months or for an unspecific term if it does not exceed that limit, the probation period is 15 days.
  • For senior executives and managers, the probationary period may be extended to 240 days.

Annual Leave in Portugal‌

  • Statutory minimum is 22 work days (20 in the first year of employment with the company).  
  • At least 15 days of annual leave must be taken in the year accrued; the remainder can only be taken until April of the following year.
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Holidays in Portugal‌

Portugal‌ celebrates nine national public holidays as well as additional public holidays that vary by state:

New Year’s Day 1st January
Good Friday 10th April
Freedom Day 25th April
Labor Day 1st May
Portugal Day 10th June
Assumption Day 15th August
Immaculate Conception Day 8th December
Christmas Eve 24th December
Christmas Day 25th December


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Maternity Leave Portuga

  • The maternity leave in Portugal is part of initial parental leave and is 120 or 150 days, depending on the payment level.
  • Mother may take up 30 days' parental leave before birth.
  • Six weeks' post-natal leave is obligatory for new mothers.
  • In the case of multiple births, initial parental leave is extended by 30 days for each additional child.

Paternity Leave Portugal‌

  • Fathers in Portugal are entitled to 25 working days of paternity leave
  • This is increased by 2 days per child in case of multiple births.

Sick Leave in Portugal‌

  • Employees are entitled to 30 days of sick leave in a 12 month period

Working Hours in Portugal‌

  • A typical working day in Portugal starts at 9am until 1pm with a two-hour break for lunch, and then resumes at 3pm until 7pm. 
  • The maximum legal working week in Portugal is 40 hours.

Overtime in Portugal‌

  • Overtime work is paid at the normal hourly rate plus 25% for the first hour or part thereof, and plus 37.5% for every subsequent hour or part thereof, on working days 
  • 50% for the first hour or part thereof, on weekly rest, compulsory or complementary, or on bank holiday

Termination of Employment in Portugal‌

  • In addition to other procedures provided for by law, an employment contract may terminate due to:
    • Expiration
    • Revocation
    • Dismissal for cause attributable to the employee
    • Collective dismissal
    • Dismissal due to elimination of job
    • Dismissal for inability to adapt
    • Unilateral termination of the contract by the employee without just cause
    • Unilateral termination of the contract by the employee with just cause.
  • Dismissal of the employee without just cause or for political or ideological reasons is forbidden
  • There are 3 methods of terminating employment agreement in Poland:
    • termination by mutual consent
    • termination with notice
    • termination without notice

Notice Period in Portugal‌

  • Termination notice by the employee is dependent upon the number of years of service.
    • 15 days is required for employees with less than 1 years’ service
    • 30 days for those between 1 and 5 years’ service
    • 60 days for those between 5 and 10 years’ service
    • 75 days for employees with over 10 years’ service

Severance in Portugal‌

  • Disciplinary dismissals do not give rise to severance pay. 
  • Severance pay is as follows: -
    • 12 days' basic remuneration and seniority payments for each full year's employment. (i.e. for ndefinite term contracts).
    • 18 days' of basic salary plus seniority allowance for each year of service (i.e. for fixed term contracts).

Portugal‌ Salary and Wages

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13th/14th Month Salary in Portugal‌

  • Yes (Mandatory)
  • There is a statutory requirement to pay the 13th month salary which is paid during the holidays.
  • There is a statutory requirement for a Christmas bonus is the 14th month.
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Income Tax in Portugal‌

  • Residents of Portugal are subject to tax on their worldwide income.
  • Nonresidents are subject to personal income tax on income arising in Portugal.
  • Personal income tax (IRS) is imposed on the earned income of employed individuals.
  • Taxable income includes all earned income of a professional individual, including commissions and profits from a trade.
  • Business and professional income is taxed at the personal income tax rates listed in Rates and may be subject to one of the following two regimes:
    • Simplified regime
    • Organized bookkeeping regime
  • Income may be taxed under the simplified regime if the taxpayer does not choose to use, and is not required to use, organized bookkeeping and if the annual gross business and professional income of the taxpayer did not exceed EUR 200,000 in the preceding year
  • The tax rates for 2023 are as follows: -

Taxable income (EUR*)

Tax rate (%)


Not over

0 7,479 14.5
7,479 11,284 21
11,284 15,992 26.5
15,992 20,700 28.5
20,700 26,355 35
26,355 38,632 37
38,632 50,483 43.5
50,483 78,834 45
78,834 - 48
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Social Security in Portugal‌

  • Social security contributions are payable on all salaries, wages, bonuses and other regular income, excluding lunch subsidies. 
  • No ceiling applies to the amount of wages subject to social security contributions for employers or employees, including members of the board. 
  • The employer’s share is 23.75%, and the employee’s share is 11%, of salaries. 
  • An employer must deduct an employee’s contribution and pay the total amount by the 20th day of the following month. 
  • A self-employed individual engaged in a business or professional activity is subject to monthly social security contributions. 
  • The basis for contributions corresponds to 70% of the total amount of services provided (20% for income from production and sale of goods) in the three preceding months, with a monthly cap of EUR5,229.12 (12 times EUR435.76). 
  • If the individual is taxed under the organized accounting, the relevant income is determined based on the profit of the previous year. 
  • Social security contributions are first due on the first day of the 12th month after the beginning of activity. Self-employed individuals should file a return to the social security authorities in the months of April, July, October and January, for the income earned in the previous three months.
  • The following are the contribution rates for self-employed individuals: 
  • 21.4% in general 
  • 25.2% for specific situations 
  • Entities contracting service providers may be subject to a 10% (when more than 80% of the services are rendered to the same entity) or 7% (when more than 50% but less than 80% of the services are rendered to the same entity) social security contribution rate levied on the amount paid for the services.


Group 1083

Social Security Contribution

Employer Group 1083 23.75%
Employee Group 1083 11%

Self Employed

Group 1083

21.4% to 25.2%

Immigration Portugal‌

  • Non-EU nationals must enter Portugal with the proper visas if they intend to carry out professional activities. 
  • The type of work permit and visa required and the required procedures to obtain these items differ depending on how the work relationship is classified (for example, as a self-employment activity, an employment activity or an activity considered to be a high qualified activity or research). 
  • The procedure for obtaining an employment visa for a foreign national is initiated by the prospective Portuguese employer (or the Portuguese entity for which the employees are assigned to work), which must first request a declaration to the Instituto de Empregoe Formação Profissional proving that the job offer is covered by the quota limits and has not been filled by a worker who enjoys preference. 
  • The approval and issuance of such declaration usually requires up to three months. 
  • This procedure is usually followed to fill available vacancies within the quota limits, which are established by a resolution taken by the Council of Ministers. 
  • The initial residence visa is issued for four months. 
  • As soon as the holder of the visa arrives in Portugal, he or she should apply to the immigration authorities in Portugal for a residence card (autorização de residência). 
  • The initial residence card is issued for one year and can be renewed for successive periods of two years.
  • Portugal is one of the countries that has implemented the EU Blue Card Directive, which enables companies to locally hire executives and high-skilled workers. 
  • To obtain the EU Blue Card, an individual must prove the following:
    • For regulated professions specified in the employment contract, the adequate professional certification document, if applicable 
    • For professions that are not regulated, proof of higher professional qualifications in the occupation or sector specified in the employment contract 
  • The application for the EU Blue Card should be submitted by a national of a third state or by the employer with the regional offices of the immigration authorities. 
  • The EU Blue Card is issued for an initial term of validity of one year, renewable for successive periods of two years. 
  • The renewal of the EU Blue Card must be requested by the interested party within 30 days before the expiration of its validity
  • The rules governing the granting of a Residence Permit for Investment (known as an ARI/Golden Visa), which entered into force on 8 October 2012, enable third-country nationals to obtain a temporary residence permit to conduct business activities with visa waiver to enter Portugal.
Need assistance hiring in Portugal‌? Contact us about our International EOR  Service

Type of Visa/Permit




Residence Card

  • Visa
  • Passport
  • Employment contract
  • Two passport photographs
  • Health insurance
  • Proof of sufficient finances
  • Proof of accommodation
  • Criminal record certificate

1 year

  • Non-EU nationals seeking employment in Portugal following a labor market test
  • Thus, foreigners can seek employment if the vacancies have not been filled by locals or EU citizens

Golden Visa/ ARI

  • Copy of valid passport and travel documents
  • Deed or contract of the purchased property
  • Proof of health insurance in Portugal
  • Criminal certificate
  • Declaration from you confirming compliance with the investment requirements
  • Documents showing a good standing with the Portuguese Tax and Customs Authority and Social Security system

5 years

One of the following: -

  • Capital transfer with a value equal to or above EUR1 million
  • The creation of at least 10 job positions
  • The purchase of real estate property with a value equal to or above EUR500,000
  • The purchase of real estate property that has construction dating back more than 30 years or that is located in urban regeneration areas, for refurbishing for a total value equal to or above EUR350,000
  • Capital transfer with a value equal to or above EUR350,000 for investing in research activities conducted by public or private scientific research institutions involved in the national scientific or technological system
  • Capital transfer with a value equal to or above EUR 350,000 for investing in artistic output or the support of the arts for the reconstruction or refurbishment of the national heritage

EU Blue Card

  • A valid travel document
  • Application for a visa or a visa (if necessary), and a valid residence permit or a national long-term visa (if appropriate)
  • A proof of sickness insurance (or a proof of having applied for it).
  • Bachelors or Master’s degree

1 year

  • High skilled workers
  • Hold a work contract or a binding job offer with a minimum duration of one year
  • The gross annual salary resulting from the monthly or annual salary specified in the work contract or binding job offer must be equal to or higher than at least 1.5 times the average gross annual salary in the Member State concerned).
  • For 2018, Portugal set the minimum salary threshold at: 580 EUR
  • Be registered with the social security
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Value Added Tax (VAT) in Portugal‌

  • The standard VAT rate in Portugal is 23%; with a reduced rate of 6% and intermediate rate of 13%. 
  • There are also different VAT rates applicable in the Portuguese Islands (Azores and Madeira). 
  • In Azores the standard VAT rate in Portugal is 18%, with reduced rate of 5% and intermediate rate of 10%.


Standard Rate

Group 1083


Reduced Rate Group 1083 13%
Reduced Rate Group 1083 6%
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Mandatory Benefits in Portugal‌

  • These are benefits as postulated by law
  • These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, notice period, severance period, 13th month and 14th month pay
  • Statutory benefits also include social security benefits
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Mandatory Benefits overview

  • Probationary period

  • Annual Leave

  • Public Holidays

  • Sick Leave

  • Maternity Leave

  • Paternity Leave

  • Notice period

  • Severance Pay

  • 13th month pay

  • 14th month pay

  • Social Security Benefits

Payments And Invoicing

  • The tax year in Portugal is the calendar year. 
  • However, it is possible to split the year for tax purposes. 
  • Residents, as well as nonresidents who have filing obligations, must file their personal income tax returns between 1 April and 30 June of the following year. 
  • Any balance of tax due or excess tax paid is payable or refundable when the Portuguese tax authorities issue the respective tax assessment. 
  • An extension to the filing of personal income tax returns with foreign tax credit is granted until 31 December of the year following the tax year. 
  • For that purpose, individuals must report the nature of the income and the country of source by the standard deadline for the personal income tax return filing (through Form 49) and subsequently file the return when the foreign tax assessment is available.
  • Nonresidents who receive rental income from Portugal or who realize a capital gain in Portugal that is not excluded from taxation must file tax returns between 1 April and 30 June of the year following the year of receipt.

Payroll Accrual in Portugal‌

Country Accruals Additional Information

Social Security 23.75%
Maternity leave 16-18 weeks
Christmas Bonus 8.33%
Vacations 9.59%
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Social security contributions are shared by the employee and the employer. The contributions are due on the employee’s gross remuneration at rates of 11% and 23.75% by the employee and the employer, respectively. These contributions cover family, pension, and unemployment benefits.

Foreign residents may be exempt from social security in Portugal if they contribute to a compulsory social security system in a European Union (EU) country or a country that has a bilateral social security agreement with Portugal, provided they are in possession of the relevant certificate of coverage.

In addition to social security contributions at a general rate of 23.75%, employers must buy an insurance premium to cover occupational accidents. The premium varies according to work and risk classification.

Regarding members of the board, the social security rates correspond to 9.3% with respect to the individual contributions and 20.3% for employer contributions. However, the contribution rate applicable to members of statutory boards who are considered as managers or administrators is set at rates of 23.75% and 11% to employers and members of statutory boards, respectively. The contributions of members of statutory boards are based on their effective remuneration but subject to a monthly minimum income level of EUR 438.81.

Members of statutory boards who are considered as managers or administrators, and some types of self-employees, become entitled to protection in the event of unemployment.

The contributions rate applicable to self-employees corresponds to 21.4%. The monthly contribution basis for self-employees corresponds to 1/3 of the relevant remuneration determined in each reporting period and produces effects in that month and in the following two months. For the determination of the relevant remuneration of the self-employee, it is considered the income received in the three months previously to the reporting month. The relevant remuneration corresponds to 70% of the amount of services rendered and to 20% of the income related to the production and sales of products.

Portugal Individual - Other taxes Last reviewed - 20 January 2021

A 10% contribution rate is due by employers if 80% or more of the fees earned by the self-employee come from services for the same company, for the same person with a business activity, or to the same group. A 7% contribution rate is due by employers when the economic dependence of the self-employee varies between 50% and 80%. The contribution is payable upon the issue of a tax assessment by the social security authorities.

In 2020, the Portuguese monthly minimum wage is EUR 635.

Payroll Accruals Additional Information

    Employment Accruals
Annual Leave Statutory minimum is 22 work days (20 in the first year of employment with the company). This equals 6% (22/365 days) of annual income
Maternity Leave Female employees are eligible for 30 days of maternity leave at full pay before a child’s birth, and 6 weeks following. This equals 8.22% (30/365 days) of annual income
Paternity Leave Fathers in Portugal are entitled to 10 days of paid paternity leave to be taken within 30 days of the birth of the child. This equals 2.7% (10/365 days) of annual income
Overtime Overtime work is paid at the normal hourly rate plus 25% for the first hour or part thereof, and plus 37.5% for every subsequent hour or part thereof, on working days
50% for the first hour or part thereof, on weekly rest, compulsory or complementary, or on bank holiday
Depends on the number of overtime hours worked
Severance Severance pay amounts to one-month basic salary for each full year of seniority, with a minimum three-month payment. This equals 8.33% (1/12 months) of annual income
Social Security Social security contributions are payable on all salaries, wages, bonuses and other regular income, excluding lunch subsidies. The employer’s share is 23.75%, This equals 23.75% of annual income

Accrued Benefits in Portugal‌

Christmas Bonus %

Based on one month bonus (paid in December)

Christmas Bonus Over Vacations % 0%
Severance per Year%

*Only if dismissal is sussessfully challanged in court, can range from 15 to 45 days per completed year, with a minimum of three months.

Vacations %

Employees are entitled to 22 days of annual leave (6.04% of annual salary)

Notice %

Employees are entitled to a 15 day notice period for one year of service or more (4.28%)

Christmas Bonus Over Notifications % 0%
Vacations Plus %

Based on one month bonus (holiday bonus) 8.33%


Total percentage of Salary (yearly)

The total employment accruals as a percentage of salary per anum are equal to 26.98%


Why use Global Expansion to hire in Portugal‌

Establishing a branch office or subsidiary in Portugal‌ can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Portugal‌ labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Portugal‌ law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Portugal‌. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Portugal‌ Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.


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