Employer of Record in Portugal: Hire, Manage, and Pay Talent Seamlessly

Agreements in Portugal

• Contracts in Portugal can be either verbal or in writing, but some types, including temporary, part-time, remote work, and contracts with non-EU workers, must be in writing.
• Contracts are typically open-ended, but temporary contracts may be used for short-term projects or to replace absent employees.
• Fixed-term contracts can be signed for up to 2 years and renewed twice after the expiration date.
• A contract should include details such as employee name, commencement date, duration and type of employment, trial period conditions, termination clause, payment and bonuses, and a remote work clause.

Visa in Portugal

Minimum Wage in Portugal

Annual Bonus in Portugal

• The Annual Bonus of the 13th month is paid by 15 December every year.
• Employees receive an additional holiday bonus equal to one month's pay before vacation leave.

Health Benefits in Portugal

• Serviço Nacional de Saúde (SNS) provides health benefits in Portugal.
• It covers all medical institutions under the Ministry of Health.
• Besides, it provides universal coverage, special occupation-based health schemes, or voluntary private health insurance.
• SNS is generally free and promotes equal access to all Portuguese residents.
• The following receive SNS services in Portugal.

  • Portuguese Nationals
  • EU Nationals
  • Portugal Residents
  • Asylum seekers and refugees
  • Stateless people residing in Portugal.

Working Hours and Overtime in Portugal

• Work hours: In Portugal, the standard workweek is from Monday to Friday, consisting of 8 hours per day and 40 hours per week.
• Break: Employers are allowed about 1-2 hours of a break after 5 hours of continuous work.e is more than 9 hours.
• Overtime: Overtime payment is mandatory.
• For 1st Hour = 125% of the hourly pay
• For hours followed by the first = 137.5% of the hourly pay
• Weekends and holidays = 150% of the hourly pay

Leaves in Portugal

Social Security in Portugal

• The Social Security system in Portugal looks over:

  • Unemployment compensation
  • Workers' retirement pension
  • Family benefits
  • Disability protection
  • Health Insurance
• The social security rate is as follows:

  • Employees = 11%
  • Employers = 23.7%
  • Individual Entrepreneurs = 25.2%

Taxes for Employers in Portugal

• The corporate tax rate in Portugal is 21% of the taxable profits.
• Similarly, the estimated employer cost is about 23.25%.
• In Portugal, the tax is charged on worldwide income.
• The country grants tax credits for foreign taxes paid on foreign source income.
• Besides, the employer needs to pay the taxes under the following headings;

  • Social Security = 23.75%
  • Wage Guarantee fund = 1.0%
  • Work-related injury = 1.4%
  • Labor accident insurance = 1.75%
  • Health at work = 120 Euros
  • Work Safety = 30 Euros
  • Work Medicine = 14.40 Euros

Probation in Portugal

• Probation periods in Portugal vary based on contract type and job position. Indefinite contracts have a 90-day probation period, while higher positions have a 180-day probation period.
• Managerial/executive positions have a 240-day period, and fixed-term contracts have 15-30 day periods depending on the duration of the contract. Probation periods are not typical in Portugal.

Termination in Portugal

• Termination of an employee in Portugal can happen:

  • Voluntarily by the employee
  • Upon Mutual Consent
  • Unilaterally by the Employer
  • Expiry of the contract
  • Misconduct by the employee
  • Collectively due to bankruptcy

Severance Pay in Portugal

Employees or Contractors in Portugal

• The Portuguese Labor Code (Código do Trabalho) distinguishes between employees and contractors.
• Employees and contractors are treated differently in benefits and tax schemes.
• Employers who misclassify employees and contractors face penalties and fines.