Overview

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

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.

Taxes

Employer

Employer Payroll Tax

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

Employee Payroll Taxes

11.00%
Social Security
11.00% Total Employee Cost

Employee Income Tax

14.5%
0 – 7,112
23.0%
7,112 – 10,732
28.5%
10,732 – 20,322
35.0%
20,322 – 25,075
37.0%
25,075 – 36,967
45.0%
36,967 – 80,822
48.0%
80,822 and up
Employer Taxes
3 HIGHEST
3 LOWEST
Brazil
China
Slovakia
Portugal
South Africa
Georgia
Macedonia
82.39%
41.12%
37.2%
26.5%
2%
2%
0%
Employee taxes
3 HIGHEST
3 LOWEST
Romania
Macedonia
Netherlands
Portugal
Georgia
Belarus
Ukraine
45%
28%
27.65%
11%
2%
1%
0%

Minimum Wage

General

740.8 EU per month (considering 12 installments)

or

635EU per month (considering 14 installments- including holiday and Christmas bonus).

Minimum wage (per month)
$4000
$2663
$2491
$709
$47
$36.80
$2.33
Geneva
Luxembourg
Australia
Portugal
Malawi
Angola
Venezuela
3 HIGHEST
3 LOWEST

Payroll

Payroll Cycle

There is no official legal date that salaries must be paid, however, it must be paid at least once a month.

13th Salary

Portugal has 14 salaries; 12 months, holidays, and Christmas allowances.

Working Hours

General

A full-time work week is 8 hours per day and 40 hours per week.

Industry-specific legislation can require reduced working hours.

Overtime

Overtime should not exceed:

  • 2 extra daily working hours with a maximum of 48 weekly hours
  • 150 hours per year for employees at companies with at least 50 employees
  • 175 hours per year employees at companies with at less 50 employees
  • Up to 200 annual overtime hours can be performed if within collective labor agreement or force majeure.

Calculation for overtime pay:

  • 1st hour is hourly rate plus 25% and hourly rate plus 37.5% for the following hours.
  • Overtime on rest day or holiday is normal working hour plus 50%.

Payroll Contributions

13th Salary

In Portugal, there is a mandatory 13th and 14th salary which are paid out in June and December.

Leave

Paid Time Off

After 6 months of employment, the employee shall be entitled to 2 business days off per month of work performed. In the first year of employment, the employee shall not take more than 20 business days off. In the following year, the employee shall not take more than 30 business days off. In the following years, from January 1st of every year, the employee shall be entitled to 22 business days off + the proportional of the outgoing year.

Vacation days
Public holidays
3 HIGHEST
3 LOWEST
Brazil
Peru
Albania
Portugal
Michigan
China
Federal
30
13
43
30
12
42
28
14
42
22
13
35
2
11
13
5
7
12
10
10
Public Holidays

Portugal has 13 mandatory public holidays.

Sick Days

The minimum requirement is 4 days leave and is paid by Social Security as follows:

55% – for first 30 days

60% – between 31 and 90 days

70% – between 91 and 365 days

75% – up to 366 days

Maternity Leave

The maternity leave is paid by social security.

  • 120 days (just mother) – pay 100%
  • 150 days shared leave (120 for mother +30 for father) – pay 100%
  • 180 days shared leave (150 for mother +30 for father) – pay 83%
  • 150 days – pay 80%
PAID MATERNITY LEAVE (DAYS)
410
365
365
120
45
30
0
Bulgaria
Serbia
Albania
Portugal
United Arab Emirates
Tunisia
Federal
3 HIGHEST
3 LOWEST
Paternity Leave

The paternity leave is 20 days mandatory with an additional 5 optional days. Leave is paid by social security at 100% of the employees average salary in the last 6 months.

Parental Leave

After the required 6 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% paid, and if they choose 120 days, they will receive 100%.

Other Leave

Bereavement Leave: Employees are entitled to five consecutive days of paid leave following the death of a spouse, parent, stepparent, child, or domestic partner. They are entitled to two days of paid leave following the death of a sibling, grandparent, or grandchild.

Family Care Leave: Employees are entitled to 30 days of paid leave per year to provide urgent and essential care for a family member younger than 12 years of age and 15 days for an older family member.

Marriage Leave: Employees are entitled to 15 consecutive days of paid leave after getting married.

Study Leave: on the day of a test and the day before.

Termination

Termination Process

The grounds for termination include collective dismissal, dismissal due to abolition of the position, unsuitability for the job, disciplinary dismissals.

The process changes according to the reason for dismissal but either way, the reason for the dismissal should be notified to the employee prior to dismissal. In case of dismissal due to discipline issues, a hearing should be conducted and allow the employee to respond.

Dismissal notice should be in writing. Notification of the dismissal should be sent to relevant service under the Ministry of Labour (except in discipline dismissal) and to the workers’ representative.

Accrued and untaken vacations are also due to the worker, regardless of the cause and form of termination

Notice Period

A fixed-term employment contract expires at the end of the stipulated term, or the end of its renewal provided that the employer or the employee notifies the other party in writing of its desire to terminate either 15 or 8 days before the deadline expires, respectively.

An unfixed-term employment contract expires when the employer foresees an end to the term and notifies the worker of said expiration, at least 7, 30, or 60 days in advance, depending on whether the contract has lasted up to six months, from six months to two years, or for a longer period of time.

Severance Pay

In the event of expiration of a fixed-term contract due to declaration by the employer, the employee is entitled to compensation corresponding to 18 days of base salary and seniority for each full year of work.

Probation Period

Every contract has an experimental period.

Depending on the type of contract the number of days varies, up to 8 months.

For indefinite employment contract, the trial period can last as follows:

  1. a)   90 days for most employees.
  2. b)  180 days for employees who:
  3. hold positions of technical complexity, a high level of responsibility, or which requires a special qualification.
  4. in trust positions.

III. are seeking their first job and are long-term unemployed.

  1. c)   240 days for workers engaged in senior management positions.

For a fixed-term employment contract, the trial period can last as follows:

  1. a)   30 days for a contract lasting six months or more.

b)   15 days for a fixed-term contract lasting less than six months

VAT

General

There are 3 standard/general VAT rates in Portugal – 23% in Continental Portugal, in Azores it is 18% and in Madeira it is 22%

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    Questions & Answers

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    P. Dawson
    P. Dawson
    3 months ago

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

    Erez Greenberg
    Admin
    3 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
    1 month 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
    1 month 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).

    João C.
    João C.
    20 days 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
    16 days ago
    Reply to  João C.

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

    Richmond M.
    Richmond M.
    16 days ago

    How often do you have to conduct skill development training? 

    Emily Kuhnert
    Admin
    16 days 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
    13 days 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
    7 days 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.

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