Employing in Portugal
Employing in Portugal: the questions employers ask most
Fourteen short answers on hiring, paying and managing staff in Portugal, each linked to a fuller guide. Start with the question you need or read from the top.
What this page covers
1
How do you employ someone in Portugal?
You employ someone in Portugal through a Portuguese company, either your own or an Employer of Record that already has one. The employer tells Segurança Social before the first day, arranges the compulsory workplace accident insurance, and gives the employee written information on the core terms within seven days. Payroll then runs monthly with IRS withheld and social security paid, and the employee needs both a NIF and a NISS.
How to hire, step by step →2
Do you need a Portuguese company to hire in Portugal?
No. A foreign business can employ someone in Portugal without registering a company by using an Employer of Record, which becomes the legal employer and carries the payroll, filings and employment obligations. Setting up your own sociedade is the alternative and suits larger permanent teams. The choice usually comes down to how many people you plan to employ and how long you expect to keep them.
Read what an Employer of Record does →3
Should you set up a company or use an Employer of Record?
Set up a company if you want a permanent presence and a growing local team. Use an Employer of Record if you want one or two people working quickly. Incorporation itself takes a day through Empresa na Hora for €360, but the bank account, tax registration, RCBE filing, insurance and accountant usually push the first payroll out by three to six weeks, and longer for foreign shareholders.
4
How much does it cost to employ someone in Portugal?
The cost is the gross salary plus employer social security at 23.75%, with no upper ceiling, plus workplace accident insurance and any benefits you offer. Remember the salary is paid across fourteen instalments, not twelve. On a €70,000 salary the employer pays €16,625 in contributions, giving roughly €86,600 before insurance and fees. Meal allowance, private health cover and a pension plan sit on top if you offer them.
5
Why are employees in Portugal paid fourteen times a year?
Portuguese employees receive twelve monthly salaries plus two statutory subsidies: the holiday subsidy under article 264 and the Christmas subsidy under article 263, each worth a month’s pay. The Christmas subsidy is due by 15 December and the holiday subsidy before the holiday is taken. Both can be paid in twelfths across the year by written agreement. Budget on fourteen payments, because quoting a monthly figure understates the annual cost by about 17%.
6
What is the minimum wage in Portugal in 2026?
The guaranteed minimum monthly wage is €920 from 1 January 2026, set by Decreto-Lei 139/2025. Paid across fourteen instalments it comes to €12,880 a year. A collective agreement covering your sector can set a higher floor, and many do, so the statutory minimum is rarely the number that matters for an office role. The agreed 2027 figure is €970, though it has not yet been legislated.
7
How does payroll work in Portugal?
The employer withholds IRS from each payment using the current withholding tables and pays it to the Autoridade Tributária by day 20 of the following month. The monthly DMR return is due by day 10. Social security contributions are paid by day 25. IRS rates for 2026 run from 12.5% to 48%, with a solidarity surcharge above €80,000. Payslips must itemise every component, including the subsidies and any meal allowance.
Read Portuguese payroll explained →8
What do social security contributions pay for in Portugal?
The single contribution, the Taxa Social Única, funds pensions, sickness and parental benefit, unemployment support and occupational illness cover. The employer pays 23.75% and the employee 11%, a combined 34.75% applied to gross pay with no ceiling. The subsidies and commission count towards the base; meal allowance does not, up to its exempt limit. Workplace accident insurance is separate and compulsory, and occupational pension schemes are voluntary.
9
What must a Portuguese employment contract include?
An open-ended contract needs no particular form, but the employer must give written information on the core terms within seven days of the start date, and on the remaining items within a month. Fixed-term contracts must be in writing and must state the specific facts justifying the term. Probation runs to 90 days for most roles, 180 for positions of trust and 240 for senior management, and is presumed excluded if it is never put in writing.
Read the employment contracts guide →10
Should you engage an employee or a contractor in Portugal?
Engage an employee if the person works under your direction on your schedule. Article 12 of the Código do Trabalho presumes employment where indicators are present, such as working at a place you set, using your equipment, keeping hours you fix, or being paid a regular fixed amount. Sham self-employment is a very serious offence, exposing the business to fines, back contributions and joint liability for its managers.
Read the misclassification guide →11
What leave and sick pay are employees entitled to?
Employees get 22 working days of paid annual leave, earned at two days a month up to 20 in the year they join. Portugal has 13 mandatory public holidays, and there is no replacement day when one falls at a weekend. Sick pay works differently from most of Europe: the first three days are unpaid, then Segurança Social pays 55% to 75% of reference pay depending on how long the absence runs.
12
How do you end employment in Portugal?
A Portuguese employer cannot dismiss at will. Ending a contract needs either just cause based on the employee’s conduct or a documented objective procedure such as redundancy. Notice for objective dismissals runs from 15 days under a year of service to 75 days at ten years or more. Compensation is 14 days’ base pay for each full year worked, and an employee has 60 days to challenge a dismissal in court.
13
What are the rules on remote work in Portugal?
Teletrabalho needs a written agreement covering the place of work, hours, pay, equipment and how often the employee comes in. The employer supplies the equipment and must cover the proven extra costs of working from home, tax free up to €1.00 a day or €1.50 under a collective agreement. Parents of young children can require remote work where the role allows it, and the right to disconnect applies to every employee.
More on teletrabalho →14
Can an Employer of Record take all of this on?
An Employer of Record employs your team member through its own Portuguese company, so you never register one. We issue the contract, notify Segurança Social, arrange the accident insurance, run payroll across the fourteen payments, withhold IRS, file the monthly returns and manage leave, sickness, notice and offboarding. You direct the work day to day and deal with one named specialist and one monthly invoice.
What our service covers →Ready to employ someone in Portugal?
Tell us about the role and when you need them to start. We will walk you through the process and the full cost, and get your new employee contracted and on payroll without you registering a Portuguese company.