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Portugal

Introduction
 

General overview & country facts, as well as labour regulations.
Employer Contributions
 

These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Employee Contributions
 

These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Employment Terms
 

All you need to know about salary & bonuses, working hours & overtime, probation period, notice period & severance pay, as well as all leave types.

COUNTRY PLAYBOOK

Portugal
Everything you need to know about payroll, benefits & hiring top talent in Portugal

Currency

Euro (EUR)

Salary payment frequency

Monthly

Capital

Lisbon

Time Zone

GMT - 1:00

Official Languages

Portuguese

Is English spoken?

Yes
Women With A Hat, Smiling, Holding The Portuguese Flag | Portugal | Global Employment

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Introduction

General Overview & Economic Facts
  • Portugal, officially known as the Portuguese Republic (República Portuguesa) is a country located in southwestern Europe on the Iberian Peninsula
  • Its territory also includes the Atlantic archipelagos of the Azores and Madeira, both autonomous regions with their own regional governments
  • Portugal spans an area of 92 212 km² (35 560 sq mi) and has a population of 10.31 million
  • Portugal’s economy ranks 47th by nominal GDP (2020) and 52nd PPP (2021)
  • It ranks 38th on the HDI
Why Employ In Portugal?
  • The main exports from Portugal are cars, vehicle parts and petroleum
  • 10.94% of the population is between the ages of 15 and 24 years, with 41.49% of the population being between the ages of 25 and 54. Portugal has a fairly youthful population, making it a favourable country to employ young, energetic employees
Overview Of The Labour Law
  • Portuguese labour law is contained in multiple sources. This includes the Portuguese Constitution, which sets out the basic rights and responsibilities of both employers and employees, the Portuguese Employment Code, the Regulation to the Employment Code and European Union legislation. Collective bargaining agreements as well as individual agreements also play a role
  • Many rules in the Portuguese Employment Code are mandatory and cannot be modified either by collective bargaining or agreement of the parties
  • Portuguese employment laws are generally known for their high degree of employment protection
Fun Country Facts
  • Portugal is the oldest country in Europe
  • The oldest bookstore in the world is in Lisbon, Portugal
  • The government keeps an 80-page guide to which baby names are allowed and which are forbidden
Why Use Playroll Services For Portugal?
  • Employing in Portugal requires companies to have their own legal entity in the country as well as managing payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in Portugal
  • With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
  • We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing your business
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Employer Contributions

These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.

Unemployment Insurance Fund
Calculated on gross remuneration

Fundo de Compensacão do Trabalho (FCT)
0.925% 


Fundo de Garantia de Compensacão do Trabalho (FCGT)
0.075%

Social Security
Called Segurança Social in Portugal
Calculated on gross remuneration

23.75%

Work Accident Insurance

Average insurance premiums are 1% of the income to be insured. Premium varies according to work and risk classification

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Employee Contributions

These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.

Social Security

Called Segurança Social in Portugal
Calculated on gross remuneration

11.00%

Income Tax

Called Personal Income Tax (PIT)
Income tax is ‘Pay as You Earn’ 

Income bracket per annum

0.00 – 7,116.00
14.50%

7,117.00 – 10,736.00
23.00%

10,737.00 – 15,216.00
26.50%

15,217.00 – 19,696.00
28.50%

19,697.00 – 25,076.00
35.00%

25,077.00 – 36,757.00
37.00%

36,758.00 – 48,033.00
43.50%

48,034.00 – 75,009.00
45.00%

75,010.00 or more
48.00%

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Employment Terms

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General

Minimum Wage
  • EUR 705.00 per month
Working Hours
  • Maximum of 48 hours per week and 8 hours per day
  • Employees are entitled to a break of a minimum of 1 hour and a maximum of 2 hours after 5 consecutive hours of work
  • Typical working hours are 09h00 to 18h00 Monday to Friday
Overtime
  • Maximum overtime is 2 hours per day
Notice Period
  • Employed between 0 and 1 year- 15 days’ notice
  • Employed between 1 and 5 years- 30 days’ notice
  • Employed between 5 and 10 years- 60 days’ notice
  • Employed for 10 or more years- 75 days’ notice
Severance Pay
  • 0 – 3 years of employment – 18 days’ salary
  • 3 or more years employment – 12 days’ salary for every subsequent year, subject to limits
Probation Period
  • There is no statutory probation period in Portugal 
  • Employees can expect a minimum probationary period of 90 days and a maximum of 240 days 
Bonus
  • Employees receive a bonus equal to one month’s salary in June and in December
Public Holidays

Public holidays 2022

  • January 1st – New Year’s Day
  • April 15th – Good Friday
  • April 17th – Easter Sunday
  • April 25th – Liberty Day
  • May 1st – Labor Day / May Day
  • June 10th – Portugal Day
  • June 16th – Corpus Christi
  • August 15th – Assumption of Mary
  • October 5th – Republic Day
  • November 1st – All Saints’ Day
  • December 1st – Restoration of Independence
  • December 8th – Feast of the Immaculate Conception
  • December 25th – Christmas Day
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Leave

Paid Leave / Vacation Days
  • Paid leave
  • Paid by employer
  • 22 working days per year
  • 2 working days per month in the first year of employment to a maximum of 20 working days per year
Sick Leave
  • Paid leave
  • Paid by employer and Social Security
  • Minimum of 30 days, maximum of 1095 days during period of employment
Maternity Leave
  • Paid leave 
  • Paid by Social Security 
  • Minimum of 120 days, maximum of 180 days 
  • Mothers receive an extra 30 days for each additional birth 
Paternity Leave
  • Paid leave
  • Paid by Social Security
  • 20 mandatory days, 5 optional days per birth
Parental Leave
  • Paid leave
  • Paid by Social Security
  • Minimum of 3 months per year
Study Leave
  • Unpaid leave
  • 2 days per test/examination per year
Family Responsibility Leave

Called Bereavement Leave in Portugal

  • Paid leave
  • Paid by employer
  • 5 days per year for the death of a spouse, parent, stepparent, child, or domestic partner
  • 2 days per year for the death of a sibling, grandparent, or grandchild
Family Care Leave
  • Paid leave
  • Minimum 15 days per year, maximum 30 days per year
Marriage Leave
  • Unpaid leave 
  • 15 days
Adoption Leave
  • Paid leave
  • Paid by Social Security
  • 120 days per year at 100% pay or 150 days per year at 80% pay
Long-Term Care Leave

Leave to Take Care of a Child with Chronic Illness, Disease, Cancer, or Disabilities

  • Unpaid leave
  • Maximum of 6 years

Start hiring in Portugal today!