Hire employees and manage payroll in Portugal

Our guide to employing in Portugal.

Country Facts

The Portuguese Republic is an EU-member and also a member of the UN, the Schengen Area, the Council of Europe and the Eurozone, OECD and NATO.

By nominal GDP it is ranked as the 47th economy in the world and by Human Development Index it is categorized as very high, on 38th place globally.

country

Capital

Lisbon

Currency

Euro (EUR)

Languages spoken

Portuguese, Mirandese

Population size (2020)

10,3 million

Ease of doing business (world bank ranking)

40

Cost of living index(2021)

52,88

Payroll frequency

Monthly

VAT - standard rate

23%

GDP - real growth rate(2020)

-7,57%

Employing in Portugal

Much of the EU’s legal system with regards to employment is similarly applied in Portugal.

Also its directives regulating labour relations originate in the EU and are thus very similar to many EU neighbours. When it comes to the regulatory landscape surrounding collective labour, Portugal also uses collective employment contracts. Foreigners employed in Portugal have strong legal protection, and are on equal terms with local portuguese employees.

There is no law that states that employment contracts have to be in written, except for when it comes to foreign employees or contracts that are only part-time or fixed term. Portuguese is widely required, among public authorities,as the language that the local paperwork is done in, and so it is recommended to use this locally.

It is often the case that a range of obligatory statutory provisions are included in an employment contract, guided by collective bargaining agreements and the Portuguese Employment Code. The following components are obligatory in an employment contract:

  • Full identity of employer
  • Working periods
  • Applicable Collective Bargaining Agreements
  • Notice period for termination
  • Date of employment
  • Place of work
  • Employee’s professional category
  • Description of activities performed
  • Vacation duration
  • Salary amount

List of Public Holidays - 2024

Date Holiday Name

1 January

New Years Day

29 Mars

Good Friday

31 Mars

Easter Sunday

25 April

Freedom Day

1 May

Labour Day

30 May

Corpus Christi

10 June

National Day

15 August

Assumption Day

5 October

Republic Day

1 November

All Saints Day

1 December

Restoration of Independence

8 December

Immaculate Conception Day

25 December

Christmas Day

Minimum wage

The nationwide minimum wage in Portugal in 2021 is 665 euro / month. This applies both to locally hired Portuguese employees and employees working on a Temporary Stay Visa or a Residence Visa for Local Hires.

Salary payouts

Payroll in Portugal is usually run on a monthly basis and wages are paid out before the last day of every month. 
Portugal also has mandatory 13th and 14th salary payouts, which are to be paid to all employees in June and December.

Taxes in Portugal

Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Portugal

Employer

Corporate income tax rate : 21%

Family, Pension and Unemployment insurance : 23.75% of gross salary

Wage guarantee fund : 1% of gross salary

Labour accident insurance : Employers are obliged to purchase insurance premiums to cover occupational accidents for employees

Employee

Family, Pension and Unemployment insurance : 11% of gross salary

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