1.75% - Labor Accident Insurance
1.00% - WGF (wage guarentee fund)
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
In Portugal, there are 3 different minimum wages based on the region:
- Mainland Portugal - €600
- Madeira - €615
Azores - €630
Paid Time Off
Every calendar year employees are entitled to 22 days paid vacation. The period begins and ends begins and ends on January 1 and vacations should be taken within this time slot, but they may be taken up until April 30th.
New employees receive 2 days paid vacation each month with a limit of 20 days but can only be used after 6 months of work. If the calendar year ends before 6 months the vacation days can be used until June 30th.
Employees can receive sick leave benefits through social security for up to 1,065 days. The worker receives 55% of their average daily earnings for the first 30 days, 60% from the 31st day till the 90th, 705 from the 91st day to the 365th, and 75% from then on.
Maternity leave is a period of 120 or 150 days and can be taken by either parent except for the first 6 weeks of leave after the birth of the child which must be taken by the mother.
Fathers are required to take a compulsory leave of 15 days after the birth of the child with 5 days immediately after delivery and the other ten days within the first 30 days.
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%.
Work related injury leave: Employers are required to take out private insurance to cover employees in case or work injury. During the first 12 months of disability the worker receives 70% of their earnings and 75% thereafter. This benefit is paid until recover or permanent disability takes effect.
A full-time work week is 40 hours.
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%.
There are 3 standard/general VAT rates in Portugal – 23% in Continental Portugal, in Azores it is 18% and in Madeira it is 22%
Both employees and employers are charged flat rate for social security taxes and pension. There is no salary ceiling.
Pension contributions are made though the Segurança Social towards the centro nacional de Pensoes (CNP).
The age for retirement is 66 years and 5 months for both men and women.
From the combined social security contributions, 20.21% goes towards old-age benefits, 4.29% finances disability, and 2.44% goes towards survivor benefits.
In Portugal, there is a mandatory 13th and 14th salary which are paid out in June and December.
Holiday pay: Equal to one months salary paid before holiday leave period.
Christmas bonus: equal to one months salary paid by December 15th.
Wage guarantee fund: 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).
There is no official legal date that salaries must be paid, however, it must be paid at least once a month and by the last working day. It is also possible to pay employees bi-monthly.
Employers are required to provide notice to employees with fixed-term contracts or if the employer has decided to terminate an employee a trial period that has lasted over 60 days. In order to have grounds for dismissal an employer must have just cause, redundancy, closure, or the employees’ failure to adapt.
Notice periods depend on the employee’s seniority.
- 15 days for employees with less than one year of service
- 30 days for employees with one to five years of service
- 60 days for employees with five years or more and up to ten years of service
- 75 days for employees with more than ten years of service
Employees who are terminated due to collective dismissal or redundancy are entitled to severance. The amount an employee will be paid depends on their seniority within the company.