Employer cost
Total monthly cost of employment
Gross monthly salary costs
Estimated taxes and contributions
Employee cost
Net monthly salary
GBP 5,137
Gross monthly salary
GBP 8,334
Estimated taxes & social security
GBP 8,334
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Portugal
Portugal, a member of the European Union, offers a strategic location, skilled workforce, and a favorable climate for business operations. In 2025, the country continues to enhance its economic environment, making it an attractive destination for companies seeking to expand in Southern Europe.
Currency
Euro (EUR)
Payroll Frequency
Monthly
Employer Taxes
26.50%
Back to Country Guide
Overview
Payroll
Taxation
Tax Calculation
Onboarding Process
Holidays / PTO
Termination
Overview
Population
~10.3 million
Language
Portuguese
Capital
Lisbon
Currency
Euro (EUR)
Country code
+351
Min wage
870 EUR / month
Working hours
8
Weekdays
Monday to Friday
Work hours per week
40 hours
Payroll
Salaried Employees
Time-Based Employees
13th Salary
- Mandatory; paid in June and December
Avg employer tax
26.50%
Tax Breakdown
Personal Income Tax (IRS):
Up to €8,059
13%
€8,060 – €12,160
16.5%
€12,161 – €20,300
26.5%
€20,301 – €25,000
35%
€25,001 – €36,800
37%
€36,801 – €80,000
45%
Over €80,000
48%
Corporate Income Tax (IRC):
Standard Rate
20%
Reduced Rate
16% on the first €50,000 of taxable income for small and medium-sized enterprises (SMEs)
Social Security Contributions:
Employee Contribution
11%
Employer Contribution
23.75%
Total Contribution
34.75%
VAT
VAT
- 23%
PT
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Top Countries
Employer cost
Total yearly cost of employment
Gross yearly salary costs
Estimated taxes and contributions
Employee cost
Net yearly salary
GBP 5,137
Gross yearly salary
GBP 8,334
Estimated taxes & social security
GBP 8,334
How it works
Onboarding Process
Employment Contract
Must be in writing; include job title, duties, salary, working hours, leave entitlements, and termination conditions
Registration with Authorities
Register the employee with the Social Security Institute (Segurança Social)
Payroll Setup
Ensure accurate calculation and withholding of taxes and social security contributions
Employee Documentation
Collect personal identification, bank account details, and tax information
Workplace Policies
Provide access to company policies, health and safety guidelines, and any applicable collective agreements
Employee Leave Policies
Sick days
- Paid by employer for the first 30 days; thereafter, by Social Security
Maternity leave
- 120 days (fully paid)
Paternity leave
- 20 days (fully paid)
Parental Leave:
- Up to 180 days; can be shared between parents
Annual Leave
- 22 working days per year
- 1 Jan: Friday, New Year's Day
- 2 Apr: Friday, Good Friday
- 4 Apr: Sunday, Easter Sunday
- 25 Apr: Sunday, Liberty Day
- 1 May: Saturday, Labor Day / May Day
- 3 Jun: Thursday, Corpus Christi
- 10 Jun: Thursday, Portugal Day
- 15 Aug: Sunday, Assumption of Mary
- 5 Oct: Tuesday, Republic Implantation
- 1 Nov: Monday, All Saints' Day
- 1 Dec: Wednesday, Restoration of Independence
- 8 Dec: Wednesday, Feast of the Immaculate Conception
- 25 Dec: Saturday, Christmas Day
Termination Process
_'s Booming Remote Workforce
Challenges of Remote Hiring in _
Simplifying Remote Hiring in _ with RemotePass
Hear what teams love
about using RemotePass.
Love it! It has been an essential tool for us, the perks of having everything at the point of my fingers. Using RemotePass has been super efficient. The platform is user-friendly and fast, and communication with customer service is truly a "gold standard".
Iyad A, Head of People
@Unico
Working with RemotePass has been extremely easy and effortless. The customer support team are second to none - always quick to respond, always helping with desire and delivering perhaps some of the best customer service we have ever encountered. Onboarding new contractors and employees is quick and easy, and we are happy to recommend RemotePass to others
Zorrie Dimitrova, COO
@GlycanAge
RemotePass has hands down been one of the best (useful and easy to use) platforms I've worked with in the past few years!
VJ, People & Talent Manager
@Invygo
RemotePass has been a great success partner for Amwal, it truly enabled us to be international talent friendly. Attracting top talent without the hassle of thinking how we would hire and pay abroad.
Reda Reda, CEO and Co-Founder
@Amwal
RemotePass has really helped us take the pain out of managing salary payments, contract managements, and admin work with our remote teams. They feel much more in control and more connected because of it.
Mohammad Absi-Halabi, CEO
@Swftbox
RemotePass is a game-changer for us. It has made managing our remote teams effortless and has greatly improved the process of hiring, managing and collaborating with our team remotely. Highly recommended
Salem Abu-Hammour, CEO & Co-Founder
@ERAD
We’re delighted to express our satisfaction regarding our collaboration with RemotePass. Their cutting-edge cloud-based platform has revolutionized our workforce and hiring procedures, enabling us to enhance efficiency and effectiveness in managing everything. It serves as a comprehensive solution that has greatly simplified our operations, making remote work effortless.
Kareem Masri, Accountant
@Alma Health
RemotePass has been so efficient for us as we have at least 60% of our team being remote. Especially for tracking if everyone has been paid out or if they have reimbursements, we don't have to manually do it one by one anymore. It's also really good since we are in compliance with each and every single one of our remote teams' place of residence.
Lorena A, HR
@NasDaily
Brilliant service. We love and we'd be using it for the years to come. Also great customer success management as well!
Badr A. CEO
@Soum
We love the entire system you guys have built, it's user-friendly and in particular we love the automated notifications part. Employees are automatically informed about the payment status and they receive the payment in a couple of hours after they get notified vs. manually asking us. Thanks for your ongoing support
Muhammed, CFO
@ShortPoint
Using RemotePass has been an absolute game-changer for our operations - knowing that we have a reliable partner on our side even in complex regions efficiently (this has previously been a big headache for us), allows our teams to focus exclusively on client service and product delivery
Nina, Associate VP
@Infomineo
We were looking for a simple and affordable product and RemotePass more than delivered. RemotePass helped us streamline and manage our remote teams. RemotePass understood us as a company and provided us the support and confidence that we are compliant with regulations, our remote teams have excellent support, and that we made the right choice
Preeta, HR Business Partner
@Eyewa
RemotePass has been very helpful as it streamlines the payment process to our consultants, with a simple 2 to 3 clicks the job is done. It is effortless and straightforward to use. The most important thing is that It eliminates any compliance risks we might face, and the lengthy verification process. Overall the system is excellent, and I would recommend it to other organizations.
Rafik, Head of HR
@Rizek
The product has been incredibly a game-changer for us as we scaled our team globally. Creating a great first impression when onboarding remote teams. Everything centralized in one place. Love it!
Roxana L, Chief People Officer
@Bankio
Our work with RemotePass is a partnership based on trust and credibility we are proud to have. With RemotePass services, onboarding and payroll for our global team is well managed and our employees feel safe and cared for.
Fahad A, HR
@Soum KSA
I was instantly impressed with the UI/UX of the RemotePass platform, it is incredibly user-friendly and the feedback I have received from the remote workers has been excellent. Having supplied contract and remote staff to clients in the Middle East for several years, I have been used to a very manual and labor-heavy process when it comes to payroll and compliance. After one demonstration from the team at RemotePass I switched from using an existing supplier, as I get better value and service using this platform.
David S, Practice Lead
@Salt
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© 2024 RemotePass. All rights reserved
English
Hiring in Portugal | Payroll, Tax & Employment Guide
With a thriving tech ecosystem in Lisbon and Porto, strategic EU time zone, and quality of life that helps retention, Portugal is a practical European hiring hub.
RemotePass makes hiring in Portugal simple. We handle compliance, contracts, and payroll. You focus on building your business.
- Portugal uses a 14-month salary system: 12 regular monthly payments plus mandatory vacation and Christmas bonuses
- Employers contribute 26.5% to social security; employees contribute 11%
- Fixed-term contracts automatically renew if you don't provide 15 days' written notice before expiry
- Youth under 35 get partial income tax exemptions on earnings up to €28,737.50 for up to 10 years
Quick Facts For Hiring In Portugal
Continent
Europe
Capital
Lisbon
Currency
Euro (EUR, €)
Language
Portuguese
Payroll Cycle
Monthly (12 payments + two statutory bonuses = 14-month system)
Pay Date
27th of the month (1 banking day prior if the 27th falls on a weekend or public holiday)
27th of the month (1 banking day prior if the 27th falls on a weekend or public holiday)
Christmas bonus: by December 15
Portugal Employment Contract Overview
A clear written contract is essential when hiring in Portugal. Here’s a quick overview of the core terms that typically shape employment agreements.
Contract Type
Open-ended / Fixed-term contracts are only allowed for temporary needs and max out at 3 years including renewals
Local Language Required?
Yes
Bilingual?
Yes
Probation Period
Fixed-term contracts:
Up to 6 months: 15 days
More than 6 months: 30 days
Up to 6 months: 15 days
More than 6 months: 30 days
Indefinite contracts:
General roles: 90 days
Technical/trust roles: 180 days
Management: up to 240 days
General roles: 90 days
Technical/trust roles: 180 days
Management: up to 240 days
Minimum Paid Time Off
22 working days per year
Public Holidays
14 public holidays per year (eight national, plus regional and municipal holidays depending on location)
Notice Period
During probation:
≤ 60 days: No notice required
> 60 days: 7 days' notice
> 120 days: 15 days' notice
≤ 60 days: No notice required
> 60 days: 7 days' notice
> 120 days: 15 days' notice
After probation:
1-5 years service: 30 days
5-10 years: 60 days
10+ years: up to 75 days
1-5 years service: 30 days
5-10 years: 60 days
10+ years: up to 75 days
What Do You Need To Include In A Portuguese Employment Contract?
Make sure your contracts include all of these to comply with Portuguese labor law:
Employee Information
- Full name
- ID number
- Role / Job title
- Start date
- Contract duration
- Working hours
- Probation and notice conditions
- Termination provisions
- Compensation details
How Does Payroll and Taxation Work in Portugal?
Portugal's 14-month salary system is unique in Europe. Understanding how the vacation and Christmas bonuses work alongside monthly pay helps you budget correctly and stay compliant.
Payroll Setup
Salary currency
Euro (EUR, €)
Minimum Wage
Effective January 1, 2025:
-
Mainland Portugal: €870/month gross
-
Madeira Region: €915/month gross
Azores Region: €913.50/month gross
Hours per Week
40 hours per week / Eight hours per day
Payroll Frequency
Monthly (12 payments + two statutory bonuses = 14-month system)
Weekdays
Monday through Friday
Mandatory Bonuses
Portugal uses a 14-month salary system. Vacation bonus (subsídio de férias) and Christmas bonus (subsídio de Natal) are statutory.
Gross Salary Structure
Gross salary doesn't follow a standardized structure in Portugal.
What Payroll Taxes Do Employers Pay in Portugal?
Employer cost % (estimate):
Employer Cost %
Contributions Breakdown
Social Security (Segurança Social):
23.75%
Labour Accident Insurance:
~1.75%
Wage Guarantee Fund (FCT + FGCT):
1%
What Payroll Taxes Do Employees Pay in Portugal?
Individual Income Tax
Progressive rates apply based on taxable income. A solidarity surcharge of 2.5% applies to income between €80,000-€250,000, and 5% above €250,000. The minimum subsistence threshold is €12,180 for 2025—individuals earning up to this amount are exempt.
Youth PIT Regime:
Taxpayers up to 35 years old benefit from partial IRS exemption on income up to €28,737.50/year for up to 10 years:
-
Year 1: 100% exemption
-
Years 2-4: 75% exemption
-
Years 5-7: 50% exemption
-
Years 8-10: 25% exemption
Social Contributions
Social Security (Segurança Social):
11%
This funds pensions (old-age, disability, survivors), unemployment benefits, maternity, paternity and adoption benefits, illness and medical support, and family allowances.
Progressive Income Tax Rates for 2025 (Mainland Portugal)
| Taxable Income (€) | Tax Rate (%) | Deductible Amount (€) |
|---|---|---|
| Up to 8,059 |
12.5% |
12.5% |
| 8,059–12,160 |
16.0% |
282.07 |
| 12,160–17,233 |
21.5% |
950.91 |
| 17,233–22,306 |
24.4% |
1,450.67 |
| 22,306–28,400 |
31.4% |
3,011.98 |
| 28,400–41,629 |
34.9% |
4,006.10 |
| 41,629–44,987 |
43.1% |
7,419.54 |
| 44,987–83,696 |
44.6% |
8,094.51 |
| Above 83,696 |
48.0% |
10,939.90 |
Non-residents are taxed at a flat rate of 25% on Portuguese-source income. Non-Habitual Residents (NHR) may be taxed at 20% on eligible jobs or receive exemptions on foreign income.
Hiring cost calculator
PT
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Top Countries
Employer cost
Total monthly cost of employment
Gross monthly salary costs
Estimated taxes and contributions
Employee cost
Net monthly salary
GBP 5,137
Gross monthly salary
GBP 8,334
Estimated taxes & social security
GBP 8,334
Employer cost
Total yearly cost of employment
Gross yearly salary costs
Estimated taxes and contributions
Employee cost
Net yearly salary
GBP 5,137
Gross yearly salary
GBP 8,334
Estimated taxes & social security
GBP 8,334
Employee Benefits and Mobility in Portugal
Employment of expats is supported in Portugal.
| Benefits | Provider | Funded Through | Notes |
|---|---|---|---|
| Health Insurance | Government |
Payroll Contributions |
Social Security contributions cover health and medical support, including primary healthcare via the public system. |
| Pension/Social Security | Government |
Payroll Contributions |
Basic pensions are funded via Social Security, contributed to by both employer and employee. Covers unemployment benefits, old-age, disability, and survivor pensions, family allowances and welfare supports. |
| Other Statutory Benefits | Employer |
Additional Cost |
Portugal uses a 14-month salary system. Vacation bonus (subsídio de férias) and Christmas bonus (subsídio de Natal) are statutory. |
Leave And Holiday Entitlement In Portugal
Annual leave
Statutory annual leave (Férias) is 22 working days per year.
New employees can only start using accrued leave after six months of service, except by agreement. In the first year, leave accrues at two days per month, up to a maximum of 20 days, and is usable after six months. If the first calendar year ends before six months of service, the remaining leave can be carried until June 30 of the next year.
From year two onward, the full 22 days are granted as of January 1, based on the prior year's service.
At least 10 consecutive days of leave must be granted between May and October. Unused statutory leave can be carried over until April 30 of the following year. No cash-out is permitted (it must be taken).
Public holidays
There are 13 national mandatory holidays in Portugal, including New Year, Freedom Day (April 25), Labour Day, Portugal Day (June 10), Restoration Day (December 1), and Christmas. Regions may grant additional municipal holidays.
Sick Leave
Sick leave (Baixa Médica) begins after a three-day unpaid waiting period (which you may choose to pay). Social Security benefits begin on day four:
-
55% of reference salary for days 4-30
-
60% for days 31-90
-
70% for days 91-365
-
75% beyond 365 days, up to a maximum of 1,095 days (3 years)
To qualify, the employee must have contributed at least six months, with at least 12 days worked in four of the last six months. No waiting period is required in cases of hospitalization, chronic disease, or pregnancy-related conditions.
Maternity Leave
Options:
-
120 days at 100%
-
150 days at 80%
-
180 days shared at ~83% pay (when both parents share the leave)
Mothers must take at least 42 days after birth and may begin up to 30 days before.
Paternity Leave
Mandatory 28 working days: seven must be taken immediately after birth (consecutive). The remaining 21 days can be taken within the six weeks following birth, consecutive or not. An additional seven optional days may be taken within the first six weeks.
Other Types of Leave
-
Parental Leave: Additional shared leave may be granted, part-paid, extending beyond standard periods under Social Security rules
-
Bereavement Leave: 20 consecutive days for death of spouse or child; five days for first-degree relatives (parents); two days for second-degree relatives (siblings, grandparents)
-
Marriage Leave: 15 consecutive days
-
Care/Family Medical Leave: 30 days per year to care for a child under 12 or someone with disability/chronic illness; 15 days per year for older dependents
-
Study/Exam Leave: Up to four days per subject per year for exams (day of exam or day before)
Termination and Offboarding in Portugal
Ending employment in Portugal requires careful attention to notice periods, severance calculations, and documentation. Here's how to handle each termination type compliantly.
| Type | Possible? |
|---|---|
| Termination for Cause (poor performance, misconduct, etc.) | Yes |
| Termination without Cause | Yes |
| Mutual Termination Agreement (MTA) | Yes |
| Redundancy | Not possible under the EOR setup |
Employee
Resignations
Termination
with Cause
Termination
without Cause
Mutual Termination
Agreement
Fixed Term
Contract
_'s Booming Remote Workforce
Challenges of Remote Hiring in _
Simplifying Remote Hiring in _ with RemotePass
FAQs About Hiring in Portugal
What's the 14-month salary system?
Portugal requires employers to pay 14 months of salary per year: 12 regular monthly payments plus a mandatory vacation bonus (typically paid in June) and a Christmas bonus (paid by December 15). This is statutory, not optional.
What happens if I don't give 15 days' notice before a fixed-term contract ends?
The contract automatically renews for the same term. You must provide written notice of non-renewal at least 15 days before expiry, or the contract continues.
What's the Youth PIT Regime?
Taxpayers up to 35 years old get partial income tax exemptions on earnings up to €28,737.50/year for up to 10 years: 100% exemption in year one, decreasing gradually to 25% in years 8-10. This makes Portugal attractive for younger talent.
How much annual leave do employees get?
22 working days per year. New employees can only start using leave after six months of service (except by agreement). At least 10 consecutive days must be taken between May and October.
When do I owe severance pay?
For termination without cause based on objective reasons (market, structural, or technological factors), you owe 12 days' base salary per year of service, capped at 12 times monthly salary or 240 times minimum wage. For fixed-term contracts that end normally or early, you owe 24 days' pay per year of service.
What's required for dismissal with cause?
You must follow a formal disciplinary procedure:
- Issue an Accusation Note (Nota de Culpa) detailing facts and evidence
- Allow employee 10 working days to respond in writing
- Issue final dismissal decision based on findings
Grounds must be serious breaches like theft, violence, or gross insubordination.
Do mutual termination agreements require a notary?
Yes. MTAs must be executed in the presence of a public notary to be valid.
When must I pay final wages after termination?
By the employee's last working day. This includes outstanding salary, unused leave, and pro-rated 13th and 14th month payments. Delays result in administrative fines.
Hear what teams love
about using RemotePass.
Love it! It has been an essential tool for us, the perks of having everything at the point of my fingers. Using RemotePass has been super efficient. The platform is user-friendly and fast, and communication with customer service is truly a "gold standard".
Iyad A, Head of People
@Unico
Working with RemotePass has been extremely easy and effortless. The customer support team are second to none - always quick to respond, always helping with desire and delivering perhaps some of the best customer service we have ever encountered. Onboarding new contractors and employees is quick and easy, and we are happy to recommend RemotePass to others
Zorrie Dimitrova, COO
@GlycanAge
RemotePass has hands down been one of the best (useful and easy to use) platforms I've worked with in the past few years!
VJ, People & Talent Manager
@Invygo
RemotePass has been a great success partner for Amwal, it truly enabled us to be international talent friendly. Attracting top talent without the hassle of thinking how we would hire and pay abroad.
Reda Reda, CEO and Co-Founder
@Amwal
RemotePass has really helped us take the pain out of managing salary payments, contract managements, and admin work with our remote teams. They feel much more in control and more connected because of it.
Mohammad Absi-Halabi, CEO
@Swftbox
RemotePass is a game-changer for us. It has made managing our remote teams effortless and has greatly improved the process of hiring, managing and collaborating with our team remotely. Highly recommended
Salem Abu-Hammour, CEO & Co-Founder
@ERAD
We’re delighted to express our satisfaction regarding our collaboration with RemotePass. Their cutting-edge cloud-based platform has revolutionized our workforce and hiring procedures, enabling us to enhance efficiency and effectiveness in managing everything. It serves as a comprehensive solution that has greatly simplified our operations, making remote work effortless.
Kareem Masri, Accountant
@Alma Health
RemotePass has been so efficient for us as we have at least 60% of our team being remote. Especially for tracking if everyone has been paid out or if they have reimbursements, we don't have to manually do it one by one anymore. It's also really good since we are in compliance with each and every single one of our remote teams' place of residence.
Lorena A, HR
@NasDaily
Brilliant service. We love and we'd be using it for the years to come. Also great customer success management as well!
Badr A. CEO
@Soum
We love the entire system you guys have built, it's user-friendly and in particular we love the automated notifications part. Employees are automatically informed about the payment status and they receive the payment in a couple of hours after they get notified vs. manually asking us. Thanks for your ongoing support
Muhammed, CFO
@ShortPoint
Using RemotePass has been an absolute game-changer for our operations - knowing that we have a reliable partner on our side even in complex regions efficiently (this has previously been a big headache for us), allows our teams to focus exclusively on client service and product delivery
Nina, Associate VP
@Infomineo
We were looking for a simple and affordable product and RemotePass more than delivered. RemotePass helped us streamline and manage our remote teams. RemotePass understood us as a company and provided us the support and confidence that we are compliant with regulations, our remote teams have excellent support, and that we made the right choice
Preeta, HR Business Partner
@Eyewa
RemotePass has been very helpful as it streamlines the payment process to our consultants, with a simple 2 to 3 clicks the job is done. It is effortless and straightforward to use. The most important thing is that It eliminates any compliance risks we might face, and the lengthy verification process. Overall the system is excellent, and I would recommend it to other organizations.
Rafik, Head of HR
@Rizek
The product has been incredibly a game-changer for us as we scaled our team globally. Creating a great first impression when onboarding remote teams. Everything centralized in one place. Love it!
Roxana L, Chief People Officer
@Bankio
Our work with RemotePass is a partnership based on trust and credibility we are proud to have. With RemotePass services, onboarding and payroll for our global team is well managed and our employees feel safe and cared for.
Fahad A, HR
@Soum KSA
I was instantly impressed with the UI/UX of the RemotePass platform, it is incredibly user-friendly and the feedback I have received from the remote workers has been excellent. Having supplied contract and remote staff to clients in the Middle East for several years, I have been used to a very manual and labor-heavy process when it comes to payroll and compliance. After one demonstration from the team at RemotePass I switched from using an existing supplier, as I get better value and service using this platform.
David S, Practice Lead
@Salt
© 2024 RemotePass. All rights reserved
English
