Hire and pay employees in
Portugal, hassle-free

The annual minimum wage for employees in Portugal is 11,480 EUR. This includes the mandatory 13 and 14 month salary payments.

A time table exemption agreement is in place for Deel EOR Employees in Portugal. This agreement exempts remote employees from overtime on their regularly scheduled working days in exchange for a 20% increase to base pay. For Deel EOR Employees the minimum annual wage is 13.776 EUR

Taxes are collected by the Portal das Finanças according to progressive tax tables, ranging from 0 to 47.17%. The rates are set annually by the Portuguese government. 

The scope of individual taxation depends on various factors including income, region of residence, marital status, residency status, disability status, and number of dependents.

The employer cost is generally estimated at 26.9% of the employee salary:

- Social Security* - 23.75%
- Work Accident Insurance* - 3.15%
- Telework Allowance - €50
- 13th month salary - 1/12 of 1 month basic salary 
- 14th month salary - 1/12 of 1 month basic salary
- Mandatory meal allowance - €6 per working day

Annual Costs
- Health and Safety at work - EUR 150

*Social Security, Work Insurance Policy, and Labor Accident Insurance are calculated on the employee's salary + telework allowance. 
Please note that 13th and 14th month salaries are paid to the employee in monthly instalments and are included in the total annual salary. Standard social security contributions apply.

These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for this country, please contact our Sales team for a quote.

Standard working hours are 8 hours per day and 40 hours per week. The standard work week is from Monday to Friday.

Overtime pay is mandatory and is not included in the salary. Worked hours outside of standard work hours are considered overtime. Employees can work a maximum of 2 hours of overtime per day. For overtime hours, employees are paid:

• 125% of the hourly rate for the first hour.
• 137.5% of the hourly rate for the following hours.
• 150% of the hourly rate for weekends and bank holidays.

Pregnant employees who have contributed to Social Security for the past six months are entitled to 120 or 150 days of paid leave. 30 days are usually taken before the child's birth. The remaining days can be divided into two periods of time. The employee will receive 80 - 100% of the salary during this period depending upon the length of leave. Social Security will be responsible for this pay.

The employee can extend leave additional 90 days at 25% pay.

Employees who have contributed to Social Security for the past 6 months are entitled to 20 days of paid paternity leave and 5 additional days of optional leave - as long as they are taken at the same time as the mother's initial parental leave. The first 5 days must be taken after the child's birth and the remaining 15 days, consecutive or not, must be taken within the following 6 weeks. The employee will receive 100% of their regular salary during this period. Paternity Leave is funded by Social Security.

Employees are entitled to 120 working days of parental leave. Both parents can decide how to distribute the time off, which should be taken 30 days after maternity leave. Either parent can take parental leave. Social Security will pay 80-100% of the salary during this period, depending on how the leave was distributed between the partners.

Employees are entitled to paid sick leave for up to 1095 days if they have contributed for the past 6 months to Portuguese Social Security. The first 3 days are unpaid and considered as a qualifying period. This leave is paid at different rates and by different payers depending upon the length:

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Termination in Portugal can be complex and must be based on performance or redundancy reasons (e.g. serious cause, unfit for the role, extinction of the role).

Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer based on:
  • Objective grounds.
  • Disciplinary dismissal
  • Unsuitability for the job position.
• By the expiration of the contract

It is not possible to terminate a contract when the employee takes parental leave, is pregnant, or breastfeeding.

Notice will depend on the nature of termination, length of employment, and the contract term.

• During the probation period

  • None, if the probation period is < 60 days 
  • 7 days, if the probation period has lasted more than 60 days and less than 120 days
    
  • 15 days, if the probation period has lasted more than 120 days
    

• Termination due to redundancy or unsuitability for the job by the employer:15 days if the length of service is less than one years.15 days if the length of service is less than one years.
  15 days if the length of service is less than one years.
  30 days if the length of service is less than five years.
  60 days if the length of service is less than ten years.
  75 days if the length of service is ten years or more.
  
  
• Voluntary termination by the employee:
  • 30 days if the length of service is less than two years.
  • 60 days if the length of service is two or more years.
• Termination with cause
  • The notice period is not mandatory.
• Non-renewal of a fixed term contract:
  • 15 days for the employer.
  • 8 days for the employee.

In Portugal, employees who are terminated based on redundancy or unsuitability for the job are entitled to severance pay.

• For indefinite-term contracts, severance pay is 14 days of salary per year of service up to 12 months of base pay
• For fixed-term contracts, severance pay is 24 days per year of service
  
  

Portugal celebrates 14 national holidays and one regional holiday based on the employee's location.

National public holidays include:

1. New Year's Day
2. Good Friday
3. Easter Sunday
4. Freedom Day Portugal
5. Labour Day
6. Corpus Christi
7. Portugal Day
8. Assumption Day
9. Republic Day Portugal
10. All Saints day
11. Independence Day Portugal
12. Immaculate Conception
13. Christmas
14. Shrove Tuesday

Contracts must be in Portuguese and can be bilingual. They must be in writing and signed by both parties.

The contract must include:

• Name
• Start date
• Length of the employment
• Job description
• Trial period conditions
• Termination conditions
• Payment conditions for the holiday and Christmas bonus
• Remote work clause

Probation periods are not mandatory. The maximum probation period is 240 days. The length depends on the type of contract and seniority of the employee:

Indefinite contracts:

• 90 days for regular workers
• 180 days for workers who hold positions of technical complexity, high degree of responsibility, perform managerial functions, or require special qualifications.
• 240 days for workers in directorship or senior executive positions.