Overview

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

calendar icon Public holidays calendar

Taxes

Employer
23.75% - Social Security
1.75% - Labor Accident Insurance
1.00% - WGF (wage guarentee fund)
Employee
11.00% - Social Security
14.50% - Up to 7,091
23.00% - 7,091 - 10,700
28.50% - 10,700 - 20,161
35.00% - 20,161 - 25,000
45.00% - 25,000 - 36,856

Termination

Termination Process
Regulations vary depending on reasoning for termination, however, notice must be provided in writing. In fixed term contracts, if chosing not to extend one party must inform the other of intention to terminate 15 days before expiration.
Advance Notice
Employees must provide 1 week notice in the first 6 months. Following, until 2 years, 30 days notice is required. From the 2 years 60 days notice is required.
Severance Pay
Employees are entitled to severance payment equal to the amount of 18 days of regular wages per year employed by the company (salary ceiling is 11,600 EUR). The global compensation amount cannot exceed 12 monthly salaries or 139,200 EUR.

Minimum Wage

General
The minimum monthly wage is 676.7 EUR (or 580 EUR based on 14 payments).

Working Hours

General
Full time employment is considered 40 hours weekly and 8 daily. By collective bargaining agreement this amount can be increased to up to 4 hours daily as long as weekly hours do not exceed 60.
Overtime
Overtime is paid at 125% for the first additional hour. All additional hours follow are paid at 137.5% regualr wages. Work during weekly rest days and holidays are paid at 150% regular wages.

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%

Payment

Payroll Frequency
Salaries are paid monthly for work between the first and last day of the month, paydays are usually between the 10th and 20th of the following month.

Mandatory Benefits

Pension Fund
Both employees and employers are charged flat rate for social security taxes and pension. There is no salary ceiling.
Social Security
Employers contribute 23.75 of workers payoll, and employees contribute 11% of their wages. Both make contributions financing old-age benefits, diasbilitiy benefits, survivor benefits, employers additionally contribute to funds for sickness, maternity, occupational disease and unemployment.
Additional Pay
Holiday pay: Equal to one months salary paid before holiday leave period. Christmas bonus: equal to one months salary paid by December 15th.
WGF – WAGE GUARANTEE FUND (FUNDO DE GARANTIA SALARIAL)
Employer mandatory contribution for all employment contracts signed after 01.01.2013 and aims to ensure the payment of the debts of the employers to their workers, when they cannot pay them, because the employer is in a situation of insolvency or in a difficult economic situation. The fund is owned by the Portuguese government through Social Security. In practical terms it is an extra contribution to Social Security. It’s 1% on top of the base gross salary (13th and 14 month salary are not subject to the WGF contribution, neither bonus or allowances).