US Companies Hiring in Portugal: The Employer Checklist

Yes. A US company can put someone on a Portuguese employment contract without registering anything of its own in Portugal, by hiring through an Employer of Record. The EOR already holds the Portuguese company, the employer registration with Segurança Social and the tax registration with the Autoridade Tributária e Aduaneira (AT), so it signs the contract, runs the payroll and pays the contributions. Employer of Record Portugal does that through a Portuguese company of its own, a sociedade unipessoal por quotas on the commercial register in Lisbon.

The two alternatives both leave the administration with you. Your own company is the heavier route. A Unipessoal Lda can be incorporated at the counter through Empresa na Hora for €360, and the work starts after that: a start-of-activity declaration with the AT within 15 days of the registry filing, a beneficial owner entry in the RCBE within 30 days, a contabilista certificado (compulsory for any company with organised accounts, at an indicative €150 to €500 a month), a bank account that clears KYC checks, workplace accident insurance and occupational health services.

The second alternative is to employ directly as a foreign company with no permanent establishment in Portugal. That is allowed. The company obtains a NIF for non-resident legal persons, files a start-of-activity declaration, registers as an employer with Segurança Social, enrols the worker, withholds IRS and arranges insurance and health and safety cover. It removes the company formation and keeps every filing deadline on your desk.

Our guide to employing in Portugal sets out the duties that apply on any of the three routes.

The main cost is the employer share of the Taxa Social Única (TSU), 23.75% of pay in 2026. The employee pays a further 11%, withheld from salary, so the combined charge to Segurança Social is 34.75%. There is no upper ceiling. Where the US Social Security tax stops at an annual wage base, the Portuguese rate applies to every euro, including the holiday and Christmas subsidies and any commission.

Workplace accident insurance is the second compulsory cost. Every employee must be covered under Lei 98/2009, through a policy bought from an authorised insurer. Premiums are set by the insurer according to the activity and the risk class of the role, so the number becomes real only when you hold a quote.

Three further duties carry a cost. Every employer organises occupational health and safety services under Lei 102/2009. Article 131 of the Código do Trabalho gives each employee at least 40 hours of training a year. Contributions to the FGCT compensation fund are suspended to the end of 2026, so nothing is due to it this year. The meal allowance is not required by statute, though it is close to universal: in 2026 it is free of IRS and TSU up to €6.15 a day in cash or €10.46 a day on a meal card.

Deadlines matter as much as rates. The DMR goes to the AT by day 10 of the following month, IRS withholding is paid by day 20, and social security contributions are paid by the 25th under the 2026 cycle. A line-by-line view of the two systems sits in our post on US and Portuguese employer costs.

Portuguese employees receive twelve monthly salaries plus two statutory subsidies, which is why an annual package is quoted over 14 payments. The subsídio de férias, the holiday subsidy in article 264 of the Código do Trabalho, is paid before the holiday is taken unless something else is agreed, and proportionally where the holiday is split. The subsídio de Natal, the Christmas subsidy in article 263, is one month’s pay and falls due by 15 December.

Both subsidies are pro-rated in the first year of the contract, in the year it ends and during any suspension. Both count towards the social security base, so the employer pays 23.75% on them in the same way as on monthly salary. IRS withholding on a subsidy is always worked out separately from the month’s pay under article 99.º-C(5) of the CIRS, rather than being added to it, which keeps the employee out of a higher withholding row for that month.

The practical effect for a US employer is that a salary quoted as a monthly figure has to be multiplied by 14, not 12, before any employer charge is added. The national minimum wage shows the same arithmetic: €920 a month in 2026 becomes €12,880 a year across the 14 payments. Subsidies may be paid in twelfths, known as duodécimos, where that is agreed in writing or set by a collective agreement, which changes the cash profile and not the annual total.

Every employee has at least 22 working days of paid annual leave under article 238(1) of the Código do Trabalho. The entitlement falls due on 1 January, relates to work done in the previous year and cannot be exchanged for money, though an employee may give up days above 20 and be paid for them on top of holiday pay.

The first year works differently. An employee earns 2 working days of leave for each month of contract, up to 20 days, and can take them after 6 full months of service. If the calendar year ends first, the days are taken by 30 June of the following year.

On top of that come 13 mandatory public holidays listed in article 234(1). Carnival Tuesday and the local municipal holiday are optional and apply only where the contract or a collective agreement provides for them. Holidays that fall at a weekend are not moved to a weekday, and four of them do so in 2026.

Sickness is handled by the state rather than the employer. The first three days are unpaid, then Segurança Social pays 55% of reference pay for up to 30 days, 60% for days 31 to 90, 70% for days 91 to 365 and 75% beyond that. Parental leave is state-funded too: 120 days at 100% of reference pay, or 150 days at 80%. The father has 28 compulsory days within 42 days of the birth plus 7 optional days, all paid at 100%.

There is no at-will employment in Portugal. An employer can end a contract only with just cause based on the employee’s conduct, or through one of the objective procedures in the Código do Trabalho, and each has a process that has to be followed in order.

Just cause, in article 351, means culpable conduct that makes the working relationship immediately impossible to continue. The employer serves a written statement of charges, the nota de culpa, the employee replies, and a reasoned written decision follows within 30 days. No notice and no compensation are due where the process stands up.

The objective routes are collective dismissal, redundancy of a single post and dismissal for unsuitability. They require a documented reason that is nobody’s fault, notice of 15, 30, 60 or 75 days depending on length of service, and severance of 14 days’ base pay and seniority payments for each full year of service from 1 May 2023, pro rata for part years. The calculation is capped at 12 months’ pay, or at 240 times the €920 minimum wage.

Probation gives real flexibility if it is used. It runs 90 days in general, 180 days for technically complex or highly responsible roles and positions of trust, and 240 days for directors and senior managers. Either side can end the contract during probation with no compensation, though the employer gives 7 days’ notice after more than 60 days and 30 days’ notice after more than 120. An employee has 60 days to challenge a dismissal.

An EU, EEA or Swiss national needs no visa and no work permit. Anyone staying longer than three months registers with the Câmara Municipal within 30 days after that first period and receives a CRUE certificate.

Everyone else needs a residence visa obtained at a Portuguese consulate before travelling, and then a residence permit from AIMA, the agency that took over the administrative work of immigration in October 2023. The standard employment route is the D1 residence visa for subordinate work, which rests on a signed employment contract or a binding job offer. Highly qualified roles can use the D3 route or the EU Blue Card, each with its own pay threshold, which the consulate will confirm for the year in question.

The sequence matters. A residence visa allows two entries and a stay of four months, and the holder attends an AIMA appointment inside that window to collect a temporary residence permit, valid for two years and renewable for three-year periods. Since Lei 61/2025 came into force on 23 October 2025, a person can no longer arrive as a tourist and regularise their status from inside Portugal. Treat timelines as several months and indicative.

• A signed contract or binding offer, which the EOR issues as the employer.
• A consular residence visa in the right category before travel.
• An AIMA appointment for the residence permit once in Portugal.
• A NIF from the AT and a NISS from Segurança Social for payroll.

An EOR supplies the employment contract the application rests on and enrols the person once they can legally start. It does not shorten the consular or AIMA stages. The practical steps for either case are set out in our guide on how to hire an employee in Portugal.

Mainland Portugal and Madeira keep Western European Time in winter and move an hour forward in summer, the same clock as the UK, and the Azores sit an hour behind. For a US team, that puts the Portuguese afternoon against the east coast morning, with a short and workable overlap for the west coast at the end of the Portuguese day.

Normal working time is capped at 8 hours a day and 40 hours a week under article 203(1) of the Código do Trabalho. Night work between 22:00 and 07:00 carries a 25% supplement where no collective agreement sets something else.

Two rules shape how a distributed team can behave. Article 199.º-A gives every employee, teleworking or not, a right to disconnect: the employer must not contact them during rest periods except in cases of force majeure, and breach is a serious offence. For teleworkers, meetings have to fall within working hours with 24 hours’ notice where possible, and an employer may not require someone to stay permanently connected by camera or microphone.

Telework itself needs a written agreement covering the place of work, hours, pay, equipment and how often the employee comes on site. The employer supplies the equipment and compensates the additional costs of working from home, free of tax up to €1.00 per full telework day, or €1.50 where a collective agreement sets the amount. Portugal has about 11.4 million residents, English is widely used in business and technology, and the main employment centres are Lisbon, Porto, Braga and Aveiro.