Portugal Employer of Record

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Portugal, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Portugal―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Portugal and how our employer of record service, Global Employment Outsourcing (GEO), and local HR experts can help you manage your international employment needs.

Hiring in Portugal

Employment law in Portugal, which is governed by the Portuguese Constitution and the Labor Code, seeks to balance employee rights with employer freedom, particularly concerning organized labor. As such, Portugal is considered more employer-friendly than many of its European neighbors.

Portugal has made several changes to its employment laws in the past few years, necessitating local labor expertise for compliant employment contracts. As your employer of record and PEO in Portugal, we can ensure that every contract, for every worker, meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up-to-date with employment regulations as they change.

Employment contracts in Portugal

As you look to hire employees in Portugal, here are some common regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours
The standard workweek is 40 hours, usually consisting of five eight-hour days; however, the Labor Code allows employers flexibility in extending or reducing the workday. Employment contracts in Portugal must include details regarding an employee’s work hours.

Compensation
As you consider the appropriate salary to offer new employees, keep in mind:

The regular minimum wage is 775.83 euros per month.
Any work beyond 40 hours in a week must be paid overtime at a 25% premium for the first hour and 37.5% for additional hours.
Employees required to work on their day off must receive a 50% hourly wage premium.
Wages must be paid at least biweekly—by check, money order or direct deposit.
Employers must provide a pay stub documenting the wage payment and any deductions.

As your employer of record in Portugal, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses
Employees in Portugal are entitled to a Christmas bonus, usually equal to one month of wages, which must be paid by December 15. Workers who start during the year receive a prorated bonus. Additionally, employees are entitled to a separate holiday bonus equal to a month of wages to be paid before they take vacation leave; this bonus is in addition to their paid leave.

Probationary period
The probationary period for employees in Portugal is generally 90 days, and to 240 days for directors and higher management.

Termination and severance
Portuguese labor law does not allow for “at will” employment, so any termination of employment must have just cause. Examples of just cause include:

Insubordination
Violation of the rights of other employees or repeated provocation of conflict with other employees
Repeated disregard for obligations of employee’s work or position
Excessive unjustified absences
Serious damage to the financial interests of the employer
Willful disregard of health and safety rules

As your employer of record in Portugal, we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.

Employee benefits and paid leave in Portugal

When negotiating terms of an employment contract with a candidate in Portugal, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave
Employees who have made contributions to the Portuguese social security system for at least six months are entitled to 120 to 180 days of paid maternity leave, with up to 30 days that can be taken before childbirth.

If the mother gives birth to multiples, such as twins or triplets, an additional 30 days of paid leave for each child is allowed. For pregnant women who face health risk to themselves or the fetus, they can take as much leave as needed prior to the birth.

Vacation
Employees in Portugal are entitled to 22 days of paid leave a year, and any leave periods must be at least 10 days. New employees with at least six months of service are entitled to two days of vacation for each month worked in the year of hire, up to 20 days.

Employees with unused vacation may carry them over until April 30 of the following year, although no more than 30 vacation days may be taken in a calendar year. Employees may exchange any leave in excess leave of 20 days for cash.

Holidays
Employees in Portugal are entitled to nine national paid holidays:

New Year’s Day
Good Friday
Easter Sunday
Liberation Day
Labor Day
Portugal Day
Assumption Day
Immaculate Conception Day
Christmas

Holidays are observed on the day they fall, and employees who are required to work on holidays are entitled to a 50% wage increase for the day, or an additional rest day.

Sick leave
Employees who have contributed to the social security system for at least six months and worked at least 12 days in the four months before illness are entitled to paid sick leave:

For the first 90 days, social security pays 65% of employee wages
From 91 to 365 days, 70% of wages
More than 365 days and up to three years, 75% of wages

In most cases, the sick leave benefit starts after a three-day waiting period.

Health coverage
Employees in Portugal receive health benefits through the Serviço Nacional de Saúde (SNS), which provides universal coverage; special occupation-based health schemes; or voluntary private health insurance.

As your employer of record in Portugal, we may be able to provide optional supplementary medical insurance coverage for professionals and their dependents at a more cost-effective rate.

Additional benefits
In addition to medical care, the Portuguese social security system funds numerous benefits, like workers’ retirement pensions, unemployment compensation and family benefits.

Employer social costs will cover a large portion of employee benefits in Portugal, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance, if needed.

Employee onboarding with an employer of record in Portugal

We write and validate all local employment contracts, streamlining the onboarding process for you and your Portugal employees—all you have to do is provide relevant information and review and approve the employment agreement.

As your employer of record in Portugal, we will:

Schedule a welcome call to discuss HR and employment information for Portugal, as well as answer any questions
Prepare a customized employment contract in English and in Portuguese (or other local language)
Share the employment contract and benefits information with the new employee for signature and review
Gather tax and banking information from the employee to set up payroll
Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your Portugal employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on Global Employment Outsourcing (GEO) to expand and hire in over 179 countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Portugal. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations—in more than 150 countries and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.

Learn more about Global Employment Outsourcing

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