Currency: Euro (EUR) (Rate)

Public Holidays: 13 National holidays plus regional holidays (see here)

Employer Taxes: Max. of 26% of gross salary

Official Language: Portugese

Payroll frequency: Monthly

13th / 14th Salary: Mandatory 13th (summer holiday) & 14th (Christmas)

3 things to know about employing in Portugal

  1. Portugal has mandatory 13th and 14th salaries which are two extra month's salary; one is paid at the time of the employee's summer holiday and one is paid at Christmas
  2. For 2020, with some restrictions, Portugal is offering returning emigrants a 50% break on employment taxes.
  3. Portugal has a comparatively low number of paid holidays for Europe with 22 days and an employee is not allowed to take more than 20 days of holiday in their first year of employment; however they have 13 national holidays as well as additional regional holidays

Employment in Portugal

Paid Holidays

Employees are entitled to have 22 days of paid vacation.

Sick pay and time off

Portuguese social security pays a sick leave benefit for employees who are absent from work as a result of illness or injury.

Employees can receive sick pay for up to 1,095 days. Pay is generally 55% to 75% of the employee’s salary.

Minimum Wage

The monthly minimum wage is 700 EUR per month.

Probation period

Probation period is typically:

Severance

The severance pay is determined according to the seniority and experience of the employee.

All employees who are terminated due to redundancy are entitled to severance pay.

Notice Period

Termination in Portugal is complex and must be based on performance or redundancy reasons.

Termination due to redundancy will have the following notice periods:

Termination notice by the employee is dependent upon the number of years of service.

Working Hours

Usual business hours are from 9am to 6pm.

The statutory maximum working week in Portugal is 40 hours and the statutory maximum working day is 8 hours.

Overtime

For overtime on working days the employee is paid 25% for the first hour and 37.5% for every subsequent hour.

Rate is 50% in case of holidays

Overtime should not exceed

Leave Policy

Female employees are eligible for 30 days of maternity leave at full pay before a child’s birth, and 6 weeks following.

Maternity leave in Portugal can be taken all at once or in two separate leaves of 30 days prior to the birth and 90 days after. If the employee has twins she’s entitled to an additional 30 days.

Alternatively, the employee can choose to take 150 days of leave at 80% of her salary.

Fathers in Portugal are entitled to 10 days of paid paternity leave to be taken within 30 days of the birth of the child. 5 of these days must be taken consecutively.

Non-compete policy

You are allowed to have non-compete contracts but compensation has to be paid whilst the non-compete is in place. The amount would have to be agreed beforehand and is typically 50% of the total compensation.

Allowances & Benefits

It is common for employees to receive a monthly lunch allowance or meal card. Allowance is paid as per the number of working days. The allowance amount is between EUR 4.77 - 7.63 per day.

Taxation

For 2019 and 2020, Portugal offers a 50% employment tax cut for returning Portuguese emigrants for 5 years after they return (providing they were not tax payers in Portugal for 3 years prior)

Employer taxes

Employee taxes