Overview

Capital
Lisbon
Currency
Euro (EUR)
Date Format
dd/mm/yyyy

COVID-19

Due to COVID-19, Portugal has made several changes in the labor code to accommodate the current situation:

  • Telework- Telework in Portugal is usually something that is agreed on by both employee and employer. Due to COVID-19, telework is now mandatory when:
    • An employee is certified as a person who is immunocompromised
    • Disabled and is considered at least 60% incapacitated
    • Children under 12 years of age who have experienced disruptions with school closures.  One parent is able to request telework.
    • When an employee is able to conduct their work outside of their workplace
  • Collective bargaining agreements may set daily or weekly telework rotations, work schedules, and even schedule lunch breaks.

Contributions

Employer

Employer Payroll Contributions

23.75%
Social Security
1.75%
Labor Accident Insurance
1.00%
WGF (wage guarantee fund)
26.50% Total Employment Cost
Employee

Employee Payroll Contributions

11.00%
Social Security
11.00% Total Employee Cost

Employee Income Tax

14.50%
up to 7,112.00 EUR
23.00%
7,113.00 EUR to 10,732.00 EUR
28.50%
10,733.00 EUR to 20,322.00 EUR
35.00%
20,323.00 EUR to 25,075.00 EUR
37.00%
25,076.00 EUR to 36,967.00 EUR
45.00%
36,968.00 EUR to 80,822.00 EUR
48.00%
80,823.00 EUR and above
Employer Taxes
3 HIGHEST
3 LOWEST
Mexico
China
South Korea
Portugal
South Africa
Georgia
Macedonia
43.72%
40.92%
34.84%
26.5%
2%
2%
0%
Employee taxes
3 HIGHEST
3 LOWEST
Romania
Macedonia
Netherlands
Portugal
Belarus
Ukraine
Cambodia
35%
28%
27.65%
11%
1%
0.6%
0%

Minimum Wage

General

The National Minimum Wage in Portugal is 665 EUR per month, based on a 14-months calculation. 

Minimum wage (per month)
$4000
$2663
$2518
$772
$36.80
$17.24
$2.33
Geneva
Luxembourg
Australia
Portugal
Angola
Tanzania
Venezuela
3 HIGHEST
3 LOWEST

Payroll

Payroll Cycle

The payroll cycle in Portugal is generally a monthly cycle, with wages paid before the last day of each month.

13th Salary

There are mandatory 13th and 14th salary payments in Portugal, which are paid out in June, for Holidays, and December, for Christmas. 

Working Hours

General

The standard working hours in Portugal are 40 hours per week, 8 hours per day. 

The maximum weekly and daily working hours can differ as stipulated in employment contract /collective bargaining agreements. 

Overtime

All work more than the standard 40 hours a week is to be paid as overtime and is regulated by the employment contract/collective agreements.  In general, overtime maximum limits are set weekly as 2 hours per day up to a maximum of 48 hours per week, and annually, as 150 hours per year for employees of a company with more than fifty employees, and 175 hours per year for companies with less than fifty employees.  As stipulated in employment contract/collective bargaining agreements, the maximum daily, weekly, and annual overtime hours can differ.  

Overtime payments are calculated as 125.00% of the usual salary rate for the first hour of overtime, increasing to 137.50% per hour for subsequent hours worked. Overtime worked on rest days/holidays is paid at 150.00% of the usual salary rate. 

Leave

Paid Time Off

Paid leave in Portugal is set in the employment contract as a minimum of 22 days paid holiday a year, following completion of 1-year service, in addition to public holidays.  

All paid time off requests must be applied for before the start of the leave and approved by the employer. The leave can be carried forward into the next year but must be used by 30th April. 

During the first year of employment, an employee is entitled to 20 days of leave, accumulated as two days per month.  If the employment starts in the first half of the year, the employee is entitled to eight days of vacation after completing 60 days of work, and if the calendar year ends before six months has been completed, the days are extended until 30th June the following year. 

Vacation days
Public holidays
3 HIGHEST
3 LOWEST
Spain
Brazil
Tanzania
Portugal
Michigan
China
Federal
30
14
44
30
13
43
28
15
43
22
13
35
2
11
13
5
7
12
10
10
Public Holidays

Portugal has 13 mandatory public holidays.

Sick Days

All employees with at least six months’ service are entitled to 370 days of paid sick leave per year and must provide a medical certificate within 48 hours of the first day of sickness.   

The sick pay is paid by the employer for the first three days at a rate of 89.00% of the usual salary rate, then by the Social Security as follows: 

  • 55.00% of the average salary rate of pay for the next 30 days 
  • 60.00% of the average salary rate of pay between 31 and 90 days 
  • 70.00% of the average salary rate of pay between 91 and 365 days 
  • 75.00% of the average salary rate of pay between up to 366 days 
Maternity Leave

Eligible expectant mothers are entitled to 100.00% of their usual salary rate, paid for by Social Security for 120 days.  For an employee to be eligible, they must have been employed for at least 80 days of the preceding 12 months before the expected due date. 

Parental leave is granted for the birth of a child under Portuguese law, which may be shared between both parents (in which case the total parental leave period may be 180 days and paid at 83.00% of the usual salary rate of pay. The mother is entitled to 30 days of parental leave before delivery and a minimum of six weeks following the birth. 

 

PAID MATERNITY LEAVE (DAYS)
413
410
365
120
40
30
0
Norway
Bulgaria
Serbia
Portugal
Malawi
Tunisia
Federal
3 HIGHEST
3 LOWEST
Paternity Leave

The father is entitled to mandatory paternity leave of 15 days, to be used in the 30 days following the birth; 5 such days must be used immediately following the date of birth. This leave is paid by social security at 100.00% of the employees’ average salary in the last six months. 

Parental Leave

After the required six weeks of maternity leave and 15 days of paternity leave, the couple can decide who takes the next 78 or 108 days. If the couple takes a total of 150 days, the leave is 80.00% paid, and if they choose 120 days, they will receive 100.00%. 

Other Leave

In Portugal, employees are entitled to up to 5 consecutive days of paid leave in the case of a family bereavement.  

Employees are also entitled to 30 days of paid leave per year to provide urgent and essential care for a family member younger than 12 and 15 days for an older family member. 

In the case of an employee getting married, the employees are entitled to 15 consecutive days of paid leave. 

Termination

Termination Process

The termination process is standard in Portugal, with notice periods required unless an employer can provide sufficient cause for dismissal without notice, usually due to misconduct or disobedience. The lack of notice of termination must be in writing and sent to the relevant service under the Ministry of Labour, except in discipline dismissal. 

Notice Period

In general, notice periods in Portugal are stipulated within the employment contract/collective agreement and are linked to the employee’s length of service, as below: 

  • Seven days’ notice if employed less than six months service   
  • One month notice if employed between 6 months & 48 months                         
  • Two months’ notice if employed for more than two years                                                
Severance Pay

Severance pay in Portugal depends on several factors, including the terms of the employment contract, the position/role of the employee, and the reason for termination. 

The minimum amount of severance pay due (if applicable) is 18 days of the usual salary rate for the first three years of service and 12 days’ salary for each subsequent year of service. 

Probation Period

Portugal’s probation period for permanent employees is 90 days, 180 days for high technical/complexity roles, and 240 days for management, directorate, and equivalent responsibility roles. Fixed and unfixed term temporary contracts are subject to shorter probation periods. 

 

VISA

VISA

Any foreigners coming to work in Portugal for longer than six months need a Residence Certificate (Certificado de Registo). Most non-EU nationals will also need a Portuguese work permit before they can undertake employment in Portugal. In most cases, a Portuguese work permit is only granted when a job offer is confirmed, and once approved, they can continue the process of obtaining a Portuguese work visa or residence permit.  After five years of residence in Portugal, you can claim Portuguese permanent residence, and after six years, Portuguese citizenship.  

Portugal has quotas to limit the number of jobs that go to third-country nationals to improve employment opportunities for EU nationals. Most jobs need to be advertised to Portuguese and EU/EFTA citizens for 30 days before the Institute for Employment and Vocational Training in Portugal (IEFP) will classify them as jobs that non-EU employees can freely fill. 

VAT

General

The standard rates of VAT in Portugal are 23.00% in Continental Portugal, in Azores, it is 18.00% and in Madeira, it is 22.00% 

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    Questions & Answers

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    P. Dawson
    P. Dawson
    11 months ago

    Hi, was wondering if there have been any changes regarding unemployment due to covid-19?

    Erez Greenberg
    Admin
    11 months ago
    Reply to  P. Dawson

    Hi, thanks for the question. Unemployment benefits have changed. Those that were due to end in 2021 have been extended for 6 months. The process of extending unemployment benefits is automatically carried out from February onwards, so those who are unemployed and whose benefits end during the month of January will receive the days missing in January along with the February benefit.

    From February onwards, unemployment benefits will normally be paid for another 6 months after their expected end date.

    Francesco
    Francesco
    9 months ago

    Hello,
    I may be starting a 2 year contract in Portugal soon, from 1st June 2021 to 30th May 2023. Should I expect/ask for the holiday payment (13th salary instalment) be made in my first month of employment this June?

    Erez Greenberg
    Admin
    9 months ago
    Reply to  Francesco

    Hi Francesco, 13th and 14th-month salaries in Portugal can be paid in 2 ways: Either paid in June and December or paid in twelves (1/12) each month along with the base salary. Since you will be beginning in June, your 13th and 14th months’ salaries will most likely be prorated (bonus will be proportionate to the time you’ve worked).

    Adnan
    Adnan
    5 months ago
    Reply to  Erez Greenberg

    Hi
    Could you please tell me if my employer can keep 13th , 14th months salaries and my food cost in my basic salary ? As I know that the basic salary in Portugal is 665 euro monthly and food cost , 13th & 14th month salary should be added with amount of 665 euro but I noticed my employer calculated the following way
    My salary at my work : 700 euro
    In this 700 euro my employer keep food cost and 1/12 of 13th and 14th month salary
    So it means my basic salary goes below 665 euro. Is not breaking the law ?
    As I understand that if employer pay me for food and 1/12 of 13th and 14 then it should be like 700 euro + food cost + 1/12 of 13th and 14th month salaries and equal should be around 800 euro.
    Does by employer has right to keep my 13th and 14th month salaries and food cost in the basic salary ?
    I’m looking forward to hearing from you. Thank you so much

    Erez Greenberg
    Admin
    5 months ago
    Reply to  Adnan

    Hi Adnan, as stated above, 13th and 14th-month salaries in Portugal are mandatory and can be paid in 2 ways: Either paid in June and December or paid in twelves (1/12) each month along with the base salary. For specific legal questions, I recommend reaching out to an attorney.

    João C.
    João C.
    8 months ago

    Hi there,

    Are you sure about those Employee taxes you mention? Are there different taxes IF the company is international?
    According to this document, the taxes are different: https://s.economias.pt/docs/tabelas_irs_2021.pdf

    Thanks,
    João

    Erez Greenberg
    Admin
    8 months ago
    Reply to  João C.

    Hi, just to clarify, are asking about total employee taxes or employee personal income tax?

    Richmond M.
    Richmond M.
    8 months ago

    How often do you have to conduct skill development training? 

    Emily Kuhnert
    Admin
    8 months ago
    Reply to  Richmond M.

    Hi, skills development training should happen at least once a year or can be split up into several training events. |Alternatively, an employee should be granted time off to attend training outside of your organization. Each employee is required to receive a minimum of 35 hours of training per year with exception to fixed-term contracts of less than 3 months.

    Anonymous
    Anonymous
    8 months ago

    Hi,
    Just wanted to ask how much social security tax (in cash or percentage) should an employee pay, who is working as a domestic worker with a contract of €750 per month ? Cause I heard that the domestic tax is less.

    Would greatly appreciate it.

    Thanks.

    Emily Kuhnert
    Admin
    8 months ago
    Reply to  Anonymous

    Hi, thank you for your question. Unfortunately, this is out of the scope of information we are able to offer. I would suggest checking out Portugal’s Tax Authority website https://www.portaldasfinancas.gov.pt/at/html/index.html.

    Mohamed Ali Mezni
    Mohamed Ali Mezni
    7 months ago

    Hi i’m going to be working at portugal with a salary of 1250 gross i was wondering can someone tell me what’s the net amount ? and will it be enough for me to live in there ? and thank you!

    Emily Kuhnert
    Admin
    7 months ago

    Hey Mohamed, thank you for your question. You can find the employee taxes at the top of the page and can get a rough estimation of your net salary.

    Joy Myers
    Joy Myers
    7 months ago

    What are the number of time off days that can rollover to the next calendar year? When do the days from the previous year need to be used?

    Alex Margolin
    Admin
    7 months ago
    Reply to  Joy Myers

    Hi Joy, in Portugal, employees are entitled to at least 22 days of annual leave, and possibly more depending on collective bargaining agreements. If they don’t use all of those days in the calendar year in which they were earned, they can be used in the following year until April 30. However, no more than 30 days of leave can be taken in any given calendar year.

    Paul
    Paul
    6 months ago

    Do employment contracts have to be written in Portuguese to be legally binding?

    Alex Margolin
    Admin
    6 months ago
    Reply to  Paul

    Hi Paul, contracts do not have to be in Portuguese in order to be legal, but they do have to be in a language that both parties (employer and employee) understand. It is also a good idea to have a Portuguese translation for both parties so that neither party could claim that they misunderstood the original.

    Christopher Deaton
    Christopher Deaton
    5 months ago

    Hi, must a Portugal software development industry employer, with less than 50 full-time employees, all working remotely during COVID-19, pay the employee for time off to get a COVID-19 vaccination?

    Erez Greenberg
    Admin
    5 months ago

    Hi Christopher, The labor code in Portugal does not require employees paid time off to be vaccinated, but the Labor Conditions Authority (ACT) has clarified that absence from work to receive the Covid-19 vaccine “is justified and should not determine loss of pay.” Because of this, it’s best to speak directly to your employer to clarify their protocol.

    OP DE beeck bART
    OP DE beeck bART
    5 months ago

    Can we give a net fixed amount extra when peole work at home?

    Emily Kuhnert
    Admin
    5 months ago

    Hi, thank you for your question. This is possible, however, you would have to calculate the gross amount first.

    Ivan
    Ivan
    2 months ago

    Is it possible for you to hire a non-EU, Portuguese resident via a non-Portuguese entity? (Citizen of Russia, moved to Portugal on a Digital Nomad/Remote work visa D7 that comes with work authorization.)

    Emily Kuhnert
    Admin
    2 months ago
    Reply to  Ivan

    Hi Ivan, there shouldn’t be any limitations on hiring a foreigner so long as they have obtained the right visas to be able to work. Any employing entity must report the hiring of a foreign worker to the Autoridade para as Condições do Trabalho (ACT) (Work Conditions Authority).

    Chandrashekar
    Chandrashekar
    2 months ago

    I joined in October, should I receive Christmas allowance in December (additional one month full salary)

    Emily Kuhnert
    Admin
    2 months ago
    Reply to  Chandrashekar

    Hi, the 13th salary you will receive will be prorated from your start date, you will not receive the full amount as you have yet to complete a full year of employment.

    Carolyn
    Carolyn
    1 month ago

    Hi, I was wondering if an employee quits, does she get paid for unused vacation time? For example, if the employee gives notice on January 1st, does she get paid for 22 days of vacation for that year?

    Emily Kuhnert
    Admin
    1 month ago
    Reply to  Carolyn

    Hi Carolyn, thank you for your question. In Portugal, leave is accrued based on a monthly basis and not given as a lump amount to be used throughout the year. The only leave that would need to be paid out if an employee resigns would be any unused leave that has already been accrued.

    Carolyn
    Carolyn
    1 month ago
    Reply to  Emily Kuhnert

    Thanks for your response! I have a related question: if an employee takes multiple weeks of leave in January and then quits in February, does the employee have to pay the company for the leave they took that was not accrued yet?

    Emily Kuhnert
    Admin
    1 month ago
    Reply to  Carolyn

    Hi Carolyn, my pleasure. If an employee takes multiple weeks of leave and then quits, then the negative leave balance is settled upon termination in the final payslip, usually as a deduction.

    Andy
    Andy
    14 days ago

    Hi, regarding this point “If the employment starts in the first half of the year, the employee is entitled to eight days of vacation after completing 60 days of work, and if the calendar year ends before six months has been completed, the days are extended until 30th June the following year.”

    Could you confirm if the 8 days are applicable after 60 days or 6 months of employment?
    Thank you!

    Emily Kuhnert
    Admin
    14 days ago
    Reply to  Andy

    Hi Andy, you are entitled to 8 days of vacation after 60 days of work if the you have started in the first half of the year (January–June).

    Andy
    Andy
    13 days ago
    Reply to  Emily Kuhnert

    Thanks! Just a follow-up question, are those 60 days working days or consecutive (2 months)?

    Emily Kuhnert
    Admin
    12 days ago
    Reply to  Andy

    Working days

    Lana
    Lana
    13 days ago

    Hi, I have a question. Do Portuguese payslip need to be itemized? So all additions and deductions separately from the base salary? Or can an employer lower the base salary itself because of, for example, sick days?

    Emily Kuhnert
    Admin
    13 days ago
    Reply to  Lana

    Hi Lana, thank you for your question. In short, yes, your employer is required to give you a breakdown of your salary remuneration. You can find a sample here https://papayaglobal.com/blog/portuguese-payslip-explained. Sick leave is paid at a different rate than your regular pay rate (a medical certificate must be submitted to your employer within 48 hours of being sick). Please see the sick leave section on this page for more information.

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