What Should I Know About Hiring in Portugal?
Understanding Portugal’s labor laws and regulations are crucial if you plan to expand your business or start a new venture there. A written employment contract is mandated by law in Portugal. Jobs, hours worked per week, pay rate, and length of employment should all be spelt out in such agreements.
An additional requirement of Portuguese law is that an employee receives a copy of the employment contract on the first day of work. Companies must deduct and pay over-employee tax withholding to the appropriate authorities. The amount of withholding will vary depending on the employee’s salary and tax situation.
The government of Portugal mandates that businesses pay into the social security system on behalf of their employees. Health care, parental leave, and unemployment insurance are just a few of the perks paid for by these premiums.
Why Is Portugal a Good Choice for Finding Remote Employees?
Many people are drawn to Portugal as a remote work location because of its positive attributes. Portugal’s first and primary advantage is its highly educated and trained labor force. There are many highly regarded educational institutions in the country that provide programs in areas including engineering, computer science, and business.
This means that many businesses may find highly trained employees with the necessary technical know-how and a preference for remote work in Portugal. This means many companies can find skilled people with the necessary technical abilities and expertise in Portugal.
Several new enterprises and startups have emerged in recent years, demonstrating Portugal’s thriving culture of entrepreneurship. Many Portuguese professionals value the freedom and independence that working from home provides, reflecting their innate entrepreneurial drive.
How Can Native Teams Help You Hire in Portugal
When demand increases, it’s possible that you’ll need to hire more workers. However, if you’re unfamiliar with the Portuguese job market, it can be challenging to know where to start. Native Teams can be helpful when looking for new employees in Portugal. We are familiar with the local job market and can assist you in finding qualified applicants. Having the assistance of Native Team can also be beneficial in ensuring that your company follows all applicable laws and regulations in Portugal when hiring new employees.
Hire your first Portuguese employee with Native Teams.
Legal Requirements for Hiring in Portugal
To calculate the salary and taxes in Portugal please click here.
Portugal’s national minimum wage was set at EUR 886.7 per month in 2023.
Contributions & Taxes
How much are the contributions & taxes?
The cost to the employer is computed as 27.9% of the employee’s compensation.
Companies with their tax home in mainland Portugal pay a uniform CIT rate of 21% on their taxable revenue.
The Overall Employee Cost is 11%.
Tax rates on personal income might range from 14.5% to 48%. Income tax is computed using a progressive rate structure.
What is the payroll cycle?
Wages are typically distributed in Portugal on the final working day of each month, following a monthly payroll cycle.
Is there a 13th salary in Portugal?
In Portugal, a 13th paycheck is given out in June for the summer holidays, and a 14th salary is paid out in December for the winter holidays.
What are the main Labor Rules?
Permanent employees in Portugal have a 90-day probationary period, increasing to 180 days for highly technical or complex positions and 240 days for managerial, directorate, or equivalent positions. Probation periods for both temporary contracts with a set duration and those without a set duration are shorter.
In Portugal, notice periods are often outlined in an employment contract or collective agreement and are proportional to the employee’s term of service.
- If you have been with the company for less than 6 months, the notice period is 7 days;
- If your employment has lasted between 6 months and 48 months, there is 1 month’s notice;
- In the event of employment termination after 2 years, 2 months’ notice is required.
In Portugal, severance pay is determined by the employee’s position/role, the terms of their employment contract, and the cause for their termination.
Severance compensation is calculated as follows:
- 18 days’ salary for the first three years of service;
- 12 days’ salary for each additional year of service.
The Portuguese Labor Law sets a maximum of 8 hours per day and 40 hours per week. The CBA may stipulate fewer hours worked per week or day. The standard workweek schedule is Monday through Friday, 9 a.m. to 6 p.m. with a one-hour lunch break or 9 a.m. to 7 p.m. with a two-hour lunch break.
Leave and Benefits
Leave and Benefits rules
Depending on the employee’s location, Portugal observes one regional holiday in addition to its 14 national holidays.
National public holidays are:
- New Year’s Day
- Good Friday
- Easter Sunday
- Freedom Day Portugal
- Labour Day
- Corpus Christi
- Portugal Day
- Assumption Day
- Republic Day Portugal
- All Saints day
- Independence Day Portugal
- Immaculate Conception
- Shrove Tuesday
The Portuguese social security system pays sick leave benefits to workers who miss time from work due to illness or injury. For an employee to qualify for a sickness benefit, they must have worked for the company for at least 6 calendar months. Workers can take up to 1,095 sick days per year. Standard pay ranges from 55-75% of the employee’s salary.
Maternity leave & Paternity leave
Female employees are entitled to 6 weeks of paid maternity leave and 30 days of paid leave before having a kid. Maternity leaves in Portugal can be taken all at once or in two separate leaves, each lasting 90 days. If the employee gave birth to twins, she is entitled to an additional 30 days.
The employee might also choose a 150-day leave at 80% of pay.
Fathers are granted 10 days of paid paternity leave in Portugal but must use it within 30 days of the child’s birth. These five days must be taken consecutively.
In the event of a death in the employee’s immediate family, a Portuguese worker is eligible for up to five days of paid absence.
Employees who are getting married are eligible for 15 days of paid time off.
Family Care Leave
The law states that workers are entitled to 15 days of paid leave per year to care for a family member aged 65 or older and 30 days of paid leave per year to care for a family member under the age of 12.
What are the minimum vacation days?
Employees are entitled to a minimum of 22 working days of yearly leave every calendar year.
Health Security & Private Insurance
Anyone who has worked for an employer for at least three months within the previous fifteen months is entitled to free medical and dental care through the Social Security Administration.
*Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices.*
Relocation and Work Permits
Native Teams will apply for your work visa in the nation on your behalf and serve as your Employer of Record. All the required documents can be uploaded using our app. Until you have your work and residency visa, Native Teams will support you by providing you with frequent information on the progress.
How long is the Visa / Work Permit process?
Depending on the authorities and the given documents, 2 to 4 weeks.
Which documents do you need?
To apply for a visa/work permit in Portugal, upload the documents from our onboarding list (relocation to log in/pricing).
Why use Native Teams for Hiring in Portugal?
Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:
- No paperwork: We will handle all the necessary paperwork for you.
- Save on taxes: We help you handle your taxes.
- No company set up: You can expand your business using our company entitles.
- Online onboarding: We’re here to ensure your onboarding process is trouble-free.
- No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
- Increase your profit: We assist you in growing your business and maximizing your profits.
- Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
- Local support: We can assist you in understanding and complying with the relevant local laws.
*Note: The provided information was accurate at the time of writing.