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.


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 - 2022


Date	Holiday Name
1st January	New Years Day
2nd April	Good Friday
4th April	Easter Sunday
25th April	Freedom Day
1st May	Labour Day
24th May	Day of the Azores
3rd June	Corpus Christi
10th June	Portugal Day
24th June	Feast of St. John the Baptist
1st July	Madeira Day
5th October	Republic Day
1st November	All Saints Day
1st December	Restoration of Independence
8th December	Immaculate Conception Day
25th December	Christmas Day
26th December	Christmas Holiday


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

About Internago

Internago offers subsidiary management, HR and international payroll services combined with international payroll software and professional business advisory services.

Hire employees and manage payroll in Portugal

Country Facts

Employing in Portugal

List of Public Holidays - 2022

Minimum wage

Salary payouts

Taxes in Portugal

Employer

Employee

About Internago