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Portugal

Basic Economic Summary

Overview

Portugal’s industrial structure heavily focuses on foreign trade as they leverage agricultural exports. But as they open the country to more investors, they have also expanded in more sectors. Tech start-ups have been opening all over the country, offering more opportunities to the Portuguese talent pool. In fact, Portugal has been ranked 32nd among the 158 countries in the Readiness for Frontier Technologies Index.

  • Local Languages: Portuguese
  • Capital: Lisbon
  • Currency: Euro
  • Population: 10.1 million (2021)
  • Date Format: dd/mm/yyyy

Useful Information

  • GDP Per Capita (in USD): 23,600 (2021)
  • Exchange Rate (EUR/USD): 1.12
  • PISA Ranking (2018): 27
  • Number of University Graduates (2018): 79,800*

*Base on the latest data available

Local Universities

Top Local Universities

University Rankings
Universidade do Porto Ranking in Portugal: 1, World Ranking: 195
Universidade de Lisboa Ranking in Portugal: 2, World Ranking: 218
Universidade de Coimbra Ranking in Portugal: 3, World Ranking: 355
Universidade Nova de Lisboa Ranking in Portugal: 3, World Ranking: 386
Universidade do Minho Ranking in Portugal: 5, World Ranking: 482

Salary Data

Average Salary of Jobs (Per Month)

Job Title Salary Range (in EUR) Salary Range (in USD)
Technical Product Engineer 1,150 - 3,980 1,289.86 - 4,464.05
Software Developer 1,280 - 4,060 1,435.67 - 4,553.78
Data Analyst 1,290 - 3,800 1,446.89 - 4,262.16
UX Designer 1,100 - 3,510 1,233.78 - 3,936.89
Project Manager 1,430 - 4,560 1,603.92 – 5,114.59
Sales Executive 1,590 - 5,490 1,783.38 – 6,157.69
Chief Accountant 1,150 - 5,690 1,289.86 - 6,382.02


More information about average salaries in Italy can be found on salaryexplorer.com

Talent Sourcing Tips

Taxes

Employer Payroll Tax

Employers need to contribute 23.75% of the wages to social security contributions.

Employee Monthly Income Tax

Employees pay 11% of their wages for social security contributions. This covers their family, pension and Unemployment benefits

Income Tax

The Income tax bracketing in Portugal is as follows :

Taxable income (EUR*) Tax rate (%) Deductible Amount (EUR)
Over Not over
0 7,112 14.5 0
7,112 10,732 23.0 604.54
10,732 20,322 28.5 1,194.80
20,322 25,075 35.0 2,515.63
25,075 36,967 37.0 3,017.27
36,967 80,882 45.0 5,974.54
80,882 48.0 8,401.21


Minimum Wage & Payroll

Minimum Wage

The minimum wage in Portugal is averaged at 775.83 EUR per month.

Payroll Cycle

Workers in Portugal are paid on a monthly basis. Wages are released a day before the end of the month.

Bonus

13th month salary

Portuguese employees are given two bonuses each year: one in June and the other in December. Each bonus is equal to the employee’s monthly salary. 

Working Hours & Statutory Leave

Working hours

The general work hours are 8 hours a day or 40 hours a week. Work hours should not exceed 12 hrs per day or 60 hours a week.

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 are the percentage of additional pay 

  • For working days - 25% of salary will be added for the first hour; 37.5% for every subsequent hour
  • For non-working days (holidays or weekends): 50% of the salary will be added for each hour

Public Holidays

There are a total of 13 public holidays in Portugal and 8 regional ones. You may check all these holidays here.

Leaves

Annual Paid Leave

Employees are to 22 business days of paid vacation leave per year. In cases of temporary contracts (up to 6 months), employees are given 2 days of leave for each completed month. 

Sick Leave

Employers are obligated to cover the first 3 days of the employee’s sick leave. Beyond that time, the employee will be receiving a sick leave allowance from their social security system.

‍Parental Leave

  • Maternity Leave

The minimum mandatory paid leave for new mothers will be six weeks following birth. Female employees will also get to enjoy up to 30 days of parental leave before delivery.

  • Paternity Leave 

Male employees have a mandatory paternity leave of 15 days within the first 30 days after delivery. Five days from it must be used following the date of birth

Offboarding & Termination

Termination Process

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 for 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.

Notice Period

Employee’s notice period varies according to his years of service with the company:

  • 15 days - less than one year of service
  • 30 days - one to five years of service
  • 60 days - five years or more and up to ten years of service
  • 75 days - more than ten years of service

‍Severance Pay

The calculation for the employee’s severance pay is based on their seniority period. Basically, regular employees that are 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. For employees who have less than 3 years of work in the company, they will be given a fraction of the 18 day-salary. You may read more about it here.

Probation period

Probation period varies according to an employee’s new role within the company. Generally, employees are given 90 days. But it may be stretched to 180 days for complex and high trust roles and even 240 days for managerial or directorate positions. 

Insurance

Employers are mandated to provide work accident insurance coverage for their employees. This is in part of their obligation to keep a risk-free, safe and healthy workplace for their people. For more details on the insurance coverage that the employers should observe, you may refer here.

VAT

The Sales Tax rate in Portugal for 2021 is 23% and is projected to trend around the same value up until 2022. 

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