Payroll Cycle
Minumum Wage
Overtime Pay
  • ~For working days 
  • ~~25% of the salary will be added for the first hour
  • ~~37.5% for every subsequent hour
  • ~For non-working days (holidays or weekends) 
  • ~~50% of the salary will be added for each hour
Visa Immigration
Employed Self-Employed
Employment contract A copy of your business license
Income Tax Return (ITR) form Company bank statement of the latest 6 months
Leave permission from the employer Income Tax Return (ITR)
Current bank statement of the latest 6 months

Talent Wiki - Portugal

Your quick guide on talent and labor compliance norms in Portugal
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Capital
Lisbon
Currency
Euro (EUR)
Languages
Portuguese
Payroll Frequency
Monthly
GDP per Capita
$24,400
Employer Tax
23.75%

Supplementary Guide for Employment and Expansion in Portugal

Talent Overview

Portugal is ranked 32nd among the 158 countries in the Readiness for Frontier Technologies Index. Tech start-ups are opening all over the country which in turn strengthens their IT sector. This has led to more opportunities for the Portuguese talent pool and for investors. 

Aside from Portugal’s IT industry, their industrial structure focuses more on foreign trade as they leverage agricultural exports.

Major Economic Hubs:

Lisbon, Madeira

Skills in Demand:

ICT professionals, Marketing, creative and Design professionals, Hospitality, Teaching professionals, health-related occupations, Tourism professionals

Local Universities

The top local universities in Portugal include:

Universidade do Porto

RANKING

Portugal : 1

World : 195

Universidade de Lisboa

RANKING

Portugal : 2

World : 218

Universidade de Coimbra

RANKING

Portugal : 3

World : 355

Universidade Nova de Lisboa

RANKING

Portugal : 4

World : 386

Universidade do Minho

RANKING

Portugal : 5

World : 482

Salary Data

No. Job Title Salary Range (in EUR) Salary Range (in USD)
1 Technical Product Engineer 1,150 - 3,980 1,289.86 - 4,464.05
2 Software Developer 1,280 - 4,060 1,435.67 - 4,553.78
3 Data Analyst 1,290 - 3,800 1,446.89 - 4,262.16
4 UX Designer 1,100 - 3,510 1,233.78 - 3,936.89
5 Project Manager 1,430 - 4,560 1,603.92 – 5,114.59
6 Sales Executive 1,590 - 5,490 1,783.38 – 6,157.69
7 Chief Accountant 1,150 - 5,690 1,289.86 - 6,382.02

Talent Sourcing Tips

Employing in Portugal

You must know Portugal’s employment laws, benefits, payroll, and taxes to successfully onboard employees for your company. To avoid disputes and problems in hiring, the section below will provide you with the needed information to onboard employees, problem-free.

Employee Contract

Employment contracts in Portugal can either be written or oral which includes everything within the provision of Portugal’s Labor Law.

Probation Period

The probationary period for employees is a minimum of 3 months to a maximum of 8 months. The notice period before termination is seven days.

Public and Provincial Holidays

Date Name Type
1 Jan New Year's Day National holiday
1 Mar Carnival / Shrove Tuesday / Pancake Day Optional Holiday
19 Mar St. Joseph's Day District Holiday (Santarém)
15 Apr Good Friday National holiday
17 Apr Easter Sunday National holiday
25 Apr Liberty Day National holiday
1 May Labor Day / May Day National holiday
3 May Our Lady of Mércoles District Holiday
12 May St. Joana's Day District Holiday (Aveiro)
22 May Leiria Day District Holiday (Leiria)
23 May Portalegre Day District Holiday (Portalegre)
26 May Ascension Day District Holiday (Beja)
6 Jun Azores Day Regional Holiday
10 Jun Portugal Day National holiday
13 Jun St. Anthony's Day District Holiday (Lisbon, Vila Real)
16 Jun Corpus Christi National holiday
24 Jun St. John's Day District Holiday (Braga, Porto)
29 Jun St. Peter's Day District Holiday (Évora)
1 Jul Madeira Day Regional Holiday
4 Jul St. Elizabeth's Day District Holiday (Coimbra)
15 Aug Assumption of Mary National holiday
20 Aug Our Lady of Sorrows District Holiday
22 Aug Our Lady of Graces District Holiday (Bragança)
7 Sep Faro Day District Holiday (Faro)
15 Sep Birth of Bocage District Holiday (Setúbal)
21 Sep St. Matthew's Day District Holiday (Viseu)
5 Oct Republic Day National holiday
1 Nov All Saints' Day National holiday
27 Nov Foral of Sancho I District Holiday (Guarda)
1 Dec Restoration of Independence National holiday
8 Dec Feast of the Immaculate Conception National holiday
25 Dec Christmas Day National holiday

Employee Leaves

Type of leave Time period Mandatory
Annual leave/Earned Leave 22 days Yes
Sick Leave 370 days Yes
Maternity Leave 16 weeks Yes

Payroll

Payroll Cycle

Workers in Portugal are paid on a monthly basis. Wages are released a day before the end of the month.

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Minimum Wage

The National Minimum Wage in Portugal is 705 EUR/ month. A minimum wage is also set for the Autonomous Region of Azores at 740.25 EUR/ month and for the Autonomous Region of Madeira at 722.00 EUR/month. 

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Overtime pay

Overtime work may be required for employees when it becomes necessary by the company. However, employees are compensated for the extra hours they have rendered outside their normal working time. Click on the link below to get more details about the percentage of additional pay. 

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Health Examination Clause

Bonus

13th month salary

It is mandatory to provide a 13th month salary for employees in Portugal. It is paid annually by 15th December of each year.

Employee Benefits

Below are some of the benefits that are offered for Portuguese employees:

  • ~Work Accident Insurance
  • ~Social Security
  • ~Healthcare Insurance
  • ~Pension
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Taxes

Employer Payroll Tax

Tax Rate (Commercial Entity) Contribution
23.75% Social Security

Employee Payroll Tax

Tax Rate (Commercial Entity) Contribution
11% Social Security (also covers family, pension and unemployment benefits)

Employee Income Tax

Taxable income (EUR*) Tax rate (%) Deductible Amount (EUR)
0 - 7,116.00 14.5% 0
7,116.00 - 10,736.00 23% 604.86
10,736.00 - 15,216.00 26.5% 980.63
15,216.00 - 19,696.00 28.5% 1,284.99
19,696.00 - 25,076.00 35% 2,565.21
25,076.00 - 36,757.00 37% 3,066.79
36,757.00 - 48,033.00 43% 5,455.84
48,033.00 - 75,009.00 45% 6,176.56
75,009.00 and above 48% 8,426.51

VAT

The VAT rates depend on the location inside Portugal but they have three different rates for three different regions shown in the table below.

Type Standard Intermediate Reduced
Portugal 23% 13% 6%
Autonomous Region of Madeira 22% 12% 5%
Autonomous Region of the Azores 18% 9% 4%

Offboarding & Termination

Termination Process

In Portugal, terminating an employee’s contract has many occurrences. It could be a collective dismissal due to a company that is downsizing, an employee’s retirement, an employee’s unsuitability for the current role, etc. 

Employers are responsible to give their employees a notification in writing not less than ten days before the effective date of termination. During the ten days, the employee or other personnel may express their opposition to the decision in writing. Employers will then have time to evaluate and reach a decision.

Notice Period

The notice period for employees in Portugal is in the range of 7 to 30 days.

Severance Pay

The calculation for the employee’s severance pay is based on their seniority period. Regular employees in service for 3 years will receive 18 days of their salary. For every year in excess of the 3 years, they will get an additional pay of 12 days. 

Employees who have less than 3 years of work in the company, will be given a fraction of the 18 day-salary. 

The base salary and seniority are taken into account to calculate the pay which may not be over 20 times the guaranteed minimum salary. The overall amount of the severance pay may also not exceed 12 times the employee’s salary and seniority.

Visa and Immigration

Since Portugal is a member of the EU, immigration in the country follows the rules surrounding Schengen Visa. The same follows for work visas, tourist visas, etc. 

To get more details about the documents required for applying for visas to Portugal whether employed or self-employed, click on the link below.

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