Can a UK Company Hire in Portugal? A Post-Brexit Guide

No. A UK company has always been free to employ someone in Portugal, and Brexit did not change that. What determines the rules is where the work is done, not where the employer is incorporated. An employee working from Lisbon or Porto is on a Portuguese employment contract governed by the Código do Trabalho, whoever signs it.

Brexit changed one thing that matters to hiring: a UK national is now a third-country national for Portuguese immigration, so a British citizen moving to Portugal to take a job needs a residence visa and then a residence permit. A Portuguese, EU, EEA or Swiss national already living in Portugal needs neither, and most first hires fall into that group.

The practical question is who holds the employer registrations. Employer of Record Portugal employs the person through its own Portuguese company, a sociedade unipessoal por quotas registered at the commercial registry in Lisbon, and the UK business directs the work day to day. The alternative is to build the same registrations yourself, either by forming an Lda or by registering a UK company with Segurança Social as a non-resident employer.

One small mercy for UK managers: mainland Portugal keeps the same clock as the UK through the year, so there is no time difference to plan around. The Azores run an hour behind.

An employee resident and working in Portugal is inside the Portuguese social security and tax system, so their pay cannot be processed through a UK scheme. Contributions are due to Segurança Social at 23.75% from the employer and 11% from the employee, and income tax is withheld monthly under the 2026 IRS tables, with rates running from 12.5% to 48% and a solidarity surcharge of 2.5% on taxable income above €80,000.

The employer duties come with dates attached. A comunicação de admissão has to reach Segurança Social before the employee starts work. The DMR, the monthly remuneration return, goes to the Autoridade Tributária e Aduaneira by day 10 of the following month. IRS withholding is paid by day 20 and contributions by the 25th under the 2026 cycle. The annual Relatório Único reports staff, pay, training and health and safety. Running the person through a UK payroll leaves all of that unfiled.

Paying someone as a contractor instead is the other common shortcut, and it carries a specific risk in Portugal. Article 12 of the Código do Trabalho presumes an employment contract where indicators such as working at the client’s premises, using the client’s equipment, working hours set by the client or a fixed amount paid at regular intervals are present. Sham self-employment on recibos verdes is a very serious offence, and fines run from €2,040 to €61,200 at the 2026 unit value. Our guide to Portuguese payroll walks through what a compliant month looks like.

The employer share of the Taxa Social Única is 23.75% in 2026, on top of gross pay. The employee’s 11% is withheld from salary, and the employer pays both across to Segurança Social in a single movement. There is no upper earnings limit anywhere in the calculation, so the rate that applies to a €30,000 salary is the same rate that applies to a €150,000 one.

The base is wider than basic salary. It covers the holiday and Christmas subsidies and commission payments, and it picks up any meal allowance above the exempt limits, which in 2026 are €6.15 a day in cash and €10.46 a day on a meal card. Non-profit employers pay a lower rate of 22.3%.

Two compulsory costs sit outside the contribution. Workplace accident insurance is required for every employee under Lei 98/2009, at a premium the insurer sets from the activity and risk class, and occupational health and safety services have to be organised under Lei 102/2009. Each employee is also entitled to at least 40 hours of training a year under article 131 of the Código do Trabalho. Payments into the FGCT compensation fund are suspended to the end of 2026.

An additional contribution for excessive use of fixed-term contracts, up to 2%, exists in the Social Security Contributions Code. It has never been applied in practice because the sector benchmark behind it was never set, so treat it as law on the books rather than a line in the budget. What an EOR charges on top is a flat fee, from €499 per employee per month, set out on our pricing page.

A Portuguese salary is delivered in 14 instalments: twelve monthly payments, a holiday subsidy and a Christmas subsidy. A UK employer used to quoting an annual figure and dividing by twelve therefore has to divide by fourteen instead, or quote the annual figure and let the payroll do the rest.

The Christmas subsidy, under article 263 of the Código do Trabalho, is one month’s pay and must reach the employee by 15 December. The holiday subsidy, under article 264, matches base pay plus payments tied to how the work is performed, and is paid before the holiday is taken unless something else is agreed. Both are reduced pro rata in the year someone joins, in the year the contract ends and across any period when the contract is suspended.

Both subsidies attract employer contributions at 23.75% in the same way as monthly salary. Income tax on them is worked out on its own rather than being added to the month in which they are paid, which stops a subsidy pushing the employee into a higher withholding row for that month. Where the employee agrees in writing, or a collective agreement provides for it, the subsidies can be spread through the year in twelfths.

The national minimum wage shows the effect plainly. At €920 a month in 2026, the annual floor is €12,880. Madeira and the Azores set their own regional rates, both above the mainland figure.

The statutory minimum is 22 working days of paid annual leave a year, set by article 238(1) of the Código do Trabalho, and a collective agreement can give more. In the year someone joins, they build 2 working days for each month of contract, up to 20 days, and can start taking them after six full months.

Thirteen public holidays are mandatory. Carnival Tuesday and a municipal holiday are optional and apply only where the employment contract or a collective agreement grants them. Unlike the UK practice of moving a bank holiday that lands at a weekend, Portugal does not substitute another day, and four of the thirteen fall at a weekend in 2026. Working a public holiday attracts a premium or compensatory rest.

Normal working time is 8 hours a day and 40 hours a week. Overtime on a working day is paid at 25% above the hourly rate for the first hour and 37.5% for each hour after that, rising to 50% and 75% once an employee passes 100 overtime hours in the year, and work on a rest day or public holiday carries 50%, or 100% above that threshold. Annual overtime is capped at 175 hours in micro and small companies and 150 hours in larger ones.

Telework needs a written agreement covering hours, equipment and site visits, and the employer compensates the extra household costs, which are free of tax up to €1.00 for each full telework day. Article 199.º-A bars an employer from contacting any employee during rest periods except in cases of force majeure.

Notice on one side and a valid reason on the other are the two things a UK employer has to plan for. An employee resigns on 30 days’ notice with up to two years of service, or 60 days above that, and owes the base pay for any days of notice not worked. An employer cannot end a contract without either just cause based on conduct or one of the objective grounds set out in the Código do Trabalho.

Three objective procedures exist: collective dismissal, closing a single post as redundant, and dismissal for unsuitability where performance or safety has fallen away. Notice runs to 15 days under a year of service, 30 days from one to five years, 60 days from five to ten and 75 days at ten years or more. Severance is 14 days’ base pay and seniority payments for each full year of service from 1 May 2023, pro rata for part years, with service before that date calculated under the earlier transitional rates. The result is capped at 12 months’ pay, or at 240 times the €920 minimum wage.

A dismissal for conduct follows a written procedure: the nota de culpa setting out the charges, the employee’s reply, then a reasoned decision inside 30 days. Get the procedure wrong and a court can order reinstatement, or an indemnity of 15 to 45 days’ pay for each year of service with a floor of three months. An employee has 60 days to bring the challenge.

Fixed-term contracts end differently. A termo certo contract runs for a maximum of two years with up to three renewals, and its expiry gives the employee 24 days’ pay for each full year of service. The detail sits in our post on terminating employment in Portugal.

A candidate who already holds Portuguese, EU, EEA or Swiss nationality, or a valid Portuguese residence permit, can start as soon as the contract, the NIF and the NISS are in place. Everyone else, including UK nationals moving from the UK, needs permission before they begin.

The route runs through a Portuguese consulate first. A residence visa for subordinate work, the D1, rests on a signed employment contract or a binding job offer, and highly qualified roles can instead use the D3 route, the EU Blue Card or a Tech Visa under an IAPMEI-certified employer, each with its own pay threshold to confirm with the consulate for the year in question. The visa allows two entries and a stay of four months, during which the holder attends an appointment with AIMA and collects a residence permit valid for two years, renewable for three-year periods.

Two changes from Lei 61/2025, in force since 23 October 2025, matter to planning. A person can no longer enter as a visitor and regularise their position from inside Portugal, so the visa has to be issued before travel. The job-seeker visa is now limited to people with specialised technical skills and runs for 120 days, extendable by 60. Family reunification needs two years of residence first, reduced to 15 months for a spouse or partner, with no waiting period for minor children or for holders of Blue Card and highly qualified permits.

An EOR provides the employment contract these applications depend on and enrols the employee once permission exists. Treat consular and AIMA timelines as several months and indicative, and build the start date around them. Our EOR services in Portugal cover the contract, payroll and filings from the first day of work.