Currency CurrencyEuro (EUR) Working Time Work Week40 hours Employer Taxes Employer Taxes approx. 26%

Hire in Portugal

Get the best talent in Portugal. Let Lano do the heavy lifting. We’ll help you hire the best full-time employees or contractors, saving you from the pain of establishing a legal entity. No need to worry about complex local laws or tax requirements. From compliant contracts to global payroll, we’ve got you covered. 

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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. 

Basic Facts about Portugal

  1. official state name Portuguese Republic (República Portuguesa)
  2. capital Lisbon
  3. population 10.18 million
  4. languages Portuguese
  5. currency Euro (EUR)
  6. time zone UTC
  1. Show public holidays
    01 Jan New Year
    02 Apr Good Friday
    04 Apr Easter Sunday
    25 Apr Freedom Day
    01 May Labour Day
    03 Jun Corpus Christi
    10 Jun Portugal Day
    15 Aug Assumption Day
    05 Oct Republic Day
    01 Nov All Saints’ Day
    01 Dec Restoration of Independence
    08 Dec Immaculate Conception
    25 Dec Christmas Day

Employment Contract

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

Working time

Working Hours and Breaks

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


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

Minimum Wage

As of February 2022, the national minimum wage in Portugal is fixed at EUR 705 per month when counting 14 salary payments per year. The government plans to raise minimum pay to EUR 750 by 2023. In some industries, collective agreements may provide for higher minimum wages.

Sick Pay

Employees who are unable to work because of illness or injury are entitled to sick leave during which they receive payments from the Portuguese social security. 

Rates of sick leave benefits are set as follows:

  • 0% during the first three days
  • 55% between days 4 and 30 
  • 60% between days 31 and 90
  • 70% between days 91 and 365 days
  • 75% for long-term incapacity to work exceeding 365 days

The period during which an employee can receive sick pay is limited to 1,095 days.


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.

Taxes and Social Security Contribution

Employees and employers in Portugal are subject to the following tax and social security contribution rates (as of February 2022):


21% corporate tax rate

23% VAT (standard rate) – except for Madeira region (22%) and Azores (18%)


Individual income tax rates range from 14.5% to 48% *

additional solidarity rates of 2.5% and 5% apply to income exceeding EUR 80,000 and EUR 250,000

social security

around 26% of employee’s gross salary including:

23.75% to social security including family, pension and unemployment benefits

1% to Portuguese Wage Guarantee Fund – applicable only to employees hired after 2013

plus additional insurance for occupational accidents


11% of employee’s gross salary to social security

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Individual income tax rates:

– up to EUR 7,116: 14.5%

– EUR 7,116 to EUR 10,736: 23%

– EUR 10,736 to EUR 15,216: 26.5%

– EUR 15,216 to EUR 19,696: 28.5%

– EUR 19,696 to EUR 25,076: 35%

– EUR 25,076 to EUR 36,757: 37%

– EUR 36,757 to EUR 48,033: 43.5%

– EUR 48,033 to EUR 75,009: 45%

– above EUR 75,009: 48%

Employee Benefits

Annual Leave

Employees in Portugal must receive at least 22 paid vacation days per year. During their first year at the company, employees receive two days of leave for each month they have worked – after having completed six months of service and limited to 20 days within the first year

In addition, Portugal observes 13 public holidays, plus one optional holiday as well as some municipal holidays.  

Maternity Leave and Paternity 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

Parental Leave

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.

Additional Leave and Benefits

In addition to the above mentioned leave entitlements, employees may take time off from work due to one of the following reasons:

  • necessity to care for sick or injured children and family members: 15 to 30 days of paid leave depending on the child’s age, severity of the injury etc. 
  • marriage: 15 days of paid leave
  • death of a close family member or spouse: two to five consecutive days of paid leave

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Employment termination

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 periods depend on the employee’s length of service and are set as follows:

Length of service Notice period
< 1 year 15 days
1 to 5 years 30 days
5 to 10 years 60 days
more than 10 years 75 days

For fixed-term contracts, employers have to respect notice periods ranging from 15 to 30 days, depending on the length of the contract.

No notice must be given during an employee’s probation period. Employees who are dismissed for objective reasons are entitled to severance pay which can be either 12, 18 or 20 days’ or even one full month’s salary for each year of completed service plus a seniority bonus where applicable. 

Hiring in Portugal?

Not sure if you should start with a contractor or go ahead and hire a full-time teammate in Portugal? The Lano platform makes it easy to go from freelance to full-time employee. Get expert guidance from the Lano team to compare your options and keep growing.