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Facts & Stats

Portugal, officially the Portuguese Republic (Portuguese: República Portuguesa) is a country located mostly on the Iberian Peninsula, in southwestern Europe. It is the westernmost sovereign state of mainland Europe, being bordered to the west and south by the Atlantic Ocean and to the north and east by Spain. Its territory also includes the Atlantic archipelagos of the Azores and Madeira, both autonomous regions with their own regional governments.

Capital city: Lisbon

Currency: Euro (€, EUR)

Population size: 10.31 million (2020 est.)

Languages spoken: Portuguese

Time zone: UTC 0

Ease of doing business: Very easy

Cost of living index: 56 of 139 nations

Payroll frequency: Monthly

VAT – standard rate: 23%

GDP – real growth rate: -7.6% (2020)

Employing in Portugal

Portuguese labour law is not contained under a single law. The main sources are the Portuguese Constitution which sets forth fundamental rights and principles regarding both employees and employers, European legislation, the Portuguese Employment Code and the Regulation of the Employment Code. Furthermore, collective bargaining agreements as well as individual agreements also play a role.

The vast majority of rules stipulated by the Portuguese Employment Code are mandatory and cannot be modified either by collective bargaining or agreement of the parties. All workers in Portugal are protected by Portuguese employment law.


Employees in Portugal must be paid at least once per month. However, pay dates are set by the employer.

Minumum Wage

As of February 2022, the national minimum wage in Portugal is fixed at €822,50 per month in 12 payments; €705 per month in 14 payments for all employees. The government plans to raise minimum pay to EUR 750 by 2023. In some industries, collective agreements may provide for higher minimum wages.


Employees in Portugal are not only entitled to a 13th but also to a 14th salary which are paid in form of a Christmas bonus – to be paid no later than the 15h of December – and a holiday bonus – to be paid in June.

Employment Contract Details

Employment contracts in Portugal are generally considered to be permanent and do not need to be in writing in order to be legally valid – except for some contract types such as fixed-term or part-time contracts. However, where no written contract is put in place, employers are obligated to provide their newly hired employees with at least a written document outlining the basic terms of employment including:

  • Date of commencement;
  • Workplace;
  • Job title, duties and responsibilities;
  • Basic salary as well as other compensation or benefits;
  • Working hours;
  • Total number of holidays;
  • Notice periods for employment termination;
  • Applicable collective agreements.

Similar minimum requirements apply in cases where the parties decide to put a written employment contract in place. Portuguese law does not require employment contracts to be in Portuguese. They may be composed in a foreign language as long as the employee understands what is said in the contract.

Probation Period

The length of an employee’s probation period depends on the position. While employees in normal positions are usually subject to probation periods of up to 90 days, probation periods for employees who exercise a high responsibility role or who occupy a management position can extend to up to 180 or even 240 days. 

Different probation periods apply for fixed-term contracts:

  • 15 days for temporary contracts of less than six months;
  • 30 days for temporary contracts of more than six months.

Onboarding time

The minimum onboarding time we need is only 2 working days!

Working hours and overtime

A standard working week in Portugal is 40 hours with five eight-hour days which is also the maximum employees are generally allowed to work. 

During an eight-hour day, the employee must have a break of at least one hour – but no more than two hours – after five hours of consecutive work. Rest periods between two working days cannot be shorter than eleven hours and an employee should get at least one rest day per week. 

Any work performed beyond 40 hours within one week is considered overtime and is only possible under certain conditions such as business-related emergencies. Where permitted, overtime work must not exceed two hours per day and is to be compensated as follows: 

  • on standard working days: 125% of normal pay rate for the first hour worked overtime and 137.5% of normal pay rate for every additional hour;
  • on rest days and public holidays: 150% of normal pay rate as well as an additional paid rest day.

Paid time off

Both full-time and part-time employees are entitled to 22 days of paid time off (PTO) a year. Employees are eligible for annual leave after 6 months of work. Part-time employees are entitled to the same leave as full-time employees. During the first year of employment, an employee is not allowed to take more than 20 days.

Public Holidays

Portugal celebrates 13 national and up to 4 regional holidays based on the employee’s location.

National public holidays include:

  • New Year’s Day
  • Good Friday
  • Easter Sunday
  • Freedom Day Portugal
  • Labour Day
  • Corpus Christi
  • Portugal Day
  • Assumption Day
  • Republic Day Portugal
  • All Saints day
  • Independence Day Portugal
  • Immaculate Conception
  • Christmas

Competitive Benefits Package in Norway

Swapp Agency can help employers provide a competitive and compliant benefits package for their employees in Portugal. If you have questions, let us know and we can help.

Social Security

Medical insurance plan

Dental insurance plan

Vision insurance plan

Additional paid holidays

Flexible work schedule

Pension scheme 

Life insurance

Other insurance

Taxes in Portugal

Learn how employment taxes and statutory fees affect your payroll or employees’ paychecks in Portugal.


  • 23.75% – Social Security
  • 1.75% – Labour Accident Insurance
  • 1.00% – Wage Guarantee Fund (WGF)


11% – Social Security

Employee Income Tax:

  • 14.5% – Up to 7,112
  • 23.0% – 7,112-10,732
  • 28.5% – 10,732-20,322
  • 35.0% – 20,322-25,075
  • 37.0% – 25,075-36,967
  • 45.0% – 36,967-80,882
  • 48.0% – 80,882 and above

Portugal collects an additional solidarity rate between 2.5-5% on income that exceeds €80,000.

Types of leave

Sick Leave

Employees are entitled to paid sick leave for up to 1095 days if they have contributed for the past 6 months to Portuguese Social Security. The first 3 days are unpaid and considered as a qualifying period. This leave is paid at different rates and by different payers depending upon the length:

  • From 3 to 30 days – 55% of base salary;
  • From 31 to 90 days – 60% of base salary;
  • From 91 to 1 year – 70% of base salary;
  • Over 1 year – 75% of base salary.

Parental Leave

There are no specific maternity or paternity leave regulations included in Portuguese labour law. Instead, both parents are entitled to so-called initial parental leave which can be either 120 or 150 days – an extension of another 30 days is possible if both parents share the leave or in case of multiple births. Pregnant employees are allowed to take up to 30 days of leave before birth and must take at least 42 days of leave after birth.

20 to 25 days of this initial parental leave are exclusively reserved for the father. Five days must be taken immediately after birth and the rest within the following six weeks. The remaining parental leave can either be taken solely by either mother or father or be shared between both parents.

During initial parental leave, parents receive benefits from Portuguese social security equal to:

  • 100% of their normal wages for parental leave extending to 120 days;
  • 80% of their normal wages for parental leave extending to 150 days;
  • 83% of their normal wages for shared parental leave extending to 180 days.

After the initial parental leave is used up, parents are entitled to further parental leave until the child is six years old under one of the following schemes:

  • three months of parental leave taken in one block;
  • reduction of daily working hours to part-time standards during twelve months;
  • a combination of both which, in sum, cannot be more than three months of parental leave.

While on extended parental leave, mothers and fathers receive statutory benefits from social security amounting to 25% of their usual wages.

Other Leave

In Portugal, employees are entitled to up to 5 consecutive days of paid leave in the case of a family bereavement.  

Employees are also entitled to 30 days of paid leave per year to provide urgent and essential care for a family member younger than 12 and 15 days for an older family member. 

In the case of an employee getting married, the employees are entitled to 15 consecutive days of paid leave.

Employment termination

Termination Process

In addition to employment termination by default – i.e. in case of a fixed-term contract – resignation and mutual agreement, employment in Portugal may be terminated due to one of the following reasons (non-exhaustive list):

  • collective dismissal or other business-related reasons such as staff reduction or liquidation;
  • redundancy;
  • breach of employment contract;
  • employee’s underperformance – must be continuous;
  • employee’s incapability to adapt to new role; 
  • summary dismissal due to gross misconduct.

Notice Period

The minimum notice period is 1 month, and the maximum is 4 months. The length will depend on the nature of termination, length of employment, and the contract term.


In Portugal, employees who are terminated based on redundancy or unsuitability for the job are entitled to severance pay.

For indefinite term contracts, severance pay is 12 days of salary per year of service up to 12 months of base pay.

For fixed-term contracts, severance pay is 18 days per year of service.

Hire Employees in Portugal

Hire Employees in Portugal

Portugal’s low employment costs and the country’s strategic position in proximity to other EU markets make the small republic situated in the West of the Iberian Peninsula a very attractive destination for international companies looking to recruit remote workers. Especially in engineering and business, the country offers foreign recruiters a large talent pool to choose from.

With Swapp Agency, your business can easily hire employees in Portugal. No more worrying about complex tax systems, managing international payroll, or local laws. No entity needed. Swapp Agency takes care of everything in +170 countries.

Usually, to hire in Portugal your business needs an entity. That means a local office, an address registered as a subsidiary, and an account with a local bank. All of this, plus navigating regional benefits, payroll, tax, and HR laws, can take months. Swapp Agency lets you hire employees in Portugal quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more.

Risks of Misclassification

Portugal, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification.

Grow your Team in Portugal with Swapp Agency

Common questions that could come up during the hiring process include the minimum wage, overtime rates, and guaranteed paid time off. 

Swapp Agency can help you offer a complete, competitive, and compliant benefits package to your employees in Portugal.

Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information.