Your quick guide on talent and labor compliance norms in Portugal
Capital
Lisbon
Currency
Euro (EUR)
Languages
Portuguese
Payroll Frequency
Monthly
GDP per Capita
$29,992.94
Employer Tax
26.5%
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
Local: 1
World : 203
Local: 2
World : 246
Local: 3
World : 386
Local: 4
World : 571
Local: 5
World : 586
Salary Data
Below are the average monthly salaries for some jobs in Portugal:
| Job Title | Average Monthly Salary (EUR) | Average Monthly Salary (USD) |
| Technical Product Engineer | 2,500 | 2,808 |
| Developers/ Programmers | 2,520 | 2,830 |
| Data Analyst | 2,480 | 2,785 |
| UX Designer | 2,250 | 2,527 |
| Project Manager | 2,920 | 3,280 |
| Sales Executive | 3,450 | 3,875 |
| Chief Accountant | 2,760 | 3,100 |
Talent Sourcing Tips
Indeed Portugal, Adecco Portugal, Net-Empregos, BonsEmpregos
4,560,000
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.
Employment contracts in Portugal can either be written or oral which includes everything within the provision of Portugal’s Labor Law.
The probationary period for employees is a minimum of 3 months to a maximum of 8 months.
| Date | Name | Type | Details |
| 1 Jan | New Year’s Day | National holiday | |
| 19 Mar | St. Joseph’s Day | District Holiday | Santarém |
| 29 Mar | Good Friday | National holiday | |
| 31 Mar | Easter Sunday | National holiday | |
| 16 Apr | Our Lady of Mércoles | District Holiday | Castelo Branco |
| 25 Apr | Liberty Day | National holiday | |
| 1 May | Labor Day / May Day | National holiday | |
| 9 May | Ascension Day | District Holiday | Beja |
| 12 May | St. Joana’s Day | District Holiday | Aveiro |
| 20 May | Azores Day | Regional Holiday | Azores |
| 22 May | Leiria Day | District Holiday | Leiria |
| 23 May | Portalegre Day | District Holiday | Portalegre |
| 30 May | Corpus Christi | National holiday | |
| 10 Jun | Portugal Day | National holiday | |
| 13 Jun | St. Anthony’s Day | District Holiday | Lisbon, Vila Real |
| 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 | Madeira |
| 4 Jul | St. Elizabeth’s Day | District Holiday | Coimbra |
| 15 Aug | Assumption of Mary | National holiday | |
| 20 Aug | Our Lady of Sorrows | District Holiday | Viana do Castelo |
| 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 |
| 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.
Minimum Wage
The National Minimum Wage in Portugal is 760 EUR/ month. A minimum wage is also set for the Autonomous Region of Azores at 798 EUR/ month and for the Autonomous Region of Madeira at 785 EUR/month.
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. Below is the percentage of additional pay.
Bonus
It is mandatory to provide a 13th month salary for employees in Portugal. It is paid annually by 15th December of each year.
Below are some of the benefits that are offered for Portuguese employees:
Taxes
| Tax Rate (Commercial Entity) | Contribution |
| 23.75% | Social Security |
| 1.75% | Labor Accident Insurance |
| 1.00% | WGF (wage guarantee fund) |
| Tax Rate (Commercial Entity) | Contribution |
| 11% | Social Security (also covers family, pension and unemployment benefits) |
| Taxable income (EUR*) | Tax rate (%) | Deductible Amount (EUR) | |
| Over | Below | ||
| 0 | 7,479.00 | 14.5% | 0 |
| 7,479.00 | 11,284.00 | 23% | 604.86 |
| 11,284.00 | 15,992.00 | 26.5% | 980.63 |
| 15,992.00 | 20,700.00 | 28.5% | 1,284.99 |
| 20,700.00 | 26,355.00 | 35% | 2,565.21 |
| 26,355.00 | 38,632.00 | 37% | 3,066.79 |
| 38,632.00 | 50,483.00 | 43% | 5,455.84 |
| 50,483.00 | 78,834.00 | 45% | 6,176.56 |
| 78,834.00 | – | 48% | 8,426.51 |
The VAT rates depend on the location inside Portugal but they have three different rates for three different regions shown in the table below.
| Region | 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
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.
The notice period for employees in Portugal is in the range of 7 to 30 days.
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.
These are the documents required for applying for visas to Portugal whether employed or self-employed.
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. Below is the percentage of additional pay.
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.
These are the documents required for applying for visas to Portugal whether employed or self-employed.
| 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 |
