Menu Map

Regions

Click on a region to see the countries that we cover

View all countries

Employer of Record Portugal

Pin

Employer of Record Portugal

Portugal’s complex labor regulations often present challenges for businesses. Agility provides a streamlined solution for hiring local talent.

Currency

Euro

Population

10.6 million

Capital City

Lisbon

Minimum Wage

EUR 11,480 per annum

Local Language

Portuguese

Working Hours

40 hours per week

Employer of record in Portugal

When you hire in Portugal, the Employer of Record in Portugal functions as the official employer for your workforce, overseeing the entire employment process. This encompasses all legal responsibilities, such as payroll and taxes, employee benefits, contracts, and full compliance with Portuguese labor regulations.

  • Manages all aspects of employing a worker for you.
  • Acts as a legal employer
  • Simplifies hiring
  • Ensures compliance with local laws

How does an Employer of Record Portugal work?

Agility

Handles the legal aspects of hiring workers, such as managing HR, employee benefits, taxes and payroll.

Company

Focuses on core business activities. Manages assigned employee’s tasks and performance.

Employee

Completes their work in the same manner as any other employee.

Cost Calculator

Use our easy calculator to explore the employment costs in Portugal. Share a bit more information, and we’ll deliver a detailed salary breakdown straight to your inbox.

Payment Frequency

Wages are typically paid monthly, with additional 13th and 14th month payments being made in June and December.

 

Employee Tax – 24.25% to 64%

Social Security: 11%

Solidarity Tax: 0% to 5% based on income

Income Tax: 13.25% to 48% based on income

 

Employer Tax – 25.05% to 26.5%

Social Security: 22.3% – 23.75%

Accident Insurance: 1.75%

Wage Guarantee Fund: 1%

 

Probation Period

15 – 240 days depending on the nature of the employee’s contract. 90 days is typical.

 

Employment Law

  • Employment agreement: Contract of employment, employment contract
  • Payslip: Wage slip, salary slip
  • Special rights and protections during pregnancy: Maternity rights, maternity benefits
  • Safe place of work: Safe working environment, healthy and safe workplace
  • Whistleblower protection: Protection against unfair treatment for reporting wrongdoing
  • Redundancy payment: Severance pay, termination payment
  • Professional training: Continuing professional development (CPD), job training
  • Right to set up Works Council: Employee representation, workers’ council

 

Employee Termination

Employment termination in Portugal can occur due to various reasons, including resignation by the employee, dismissal by the employer for just cause, redundancy, or expiration of a fixed-term contract. The notice period required for termination varies depending on the duration of employment and the reason for termination. In cases of unfair dismissal, employees may have the right to claim compensation or reinstatement.

Notice periods vary from 0 – 75 days, depending on the employee’s contract and time served.

Severance payments are variable, but capped at a maximum 52 weeks of an employee’s base salary.

Employee Benefits

Statutory Benefits

Christmas and holiday subsidies: Holiday pay, seasonal bonuses

Basic insurance by the national system: National health insurance, universal healthcare

Wage guarantee fund: Employment insurance, unemployment benefits

Workers compensation insurance: Workplace injury insurance, occupational accident insurance

Common Additional Benefits

Meal vouchers: Food allowance, meal subsidy

Public transportation allowance: Transportation stipend, commuting allowance

Supplementary pension: Additional pension, private pension

Supplementary health & life insurance: Private health & life insurance, supplemental benefits

Commission: Performance-based pay, incentive pay

Flexible working hours: Flexible schedule, flexible work arrangements

Phone bills: Phone allowance, cellphone reimbursement

Gym membership: Fitness allowance, health club reimbursement

Statutory Leave

22 days days annual leave plus public holidays
1,095 days of sick leave paid in part by the state
120 days maternity leave
usually 2 weeks paternity leave
Other leave entitlement includes bereavement, carers and marriage leave

FAQ

Think of it like this: Agility EOR becomes the legal employer of your employees, taking care of all the paperwork and compliance headaches.

Agility EOR
  • We manage the onboarding process and ensure everything’s in order before your employee starts
  • We make sure your employees are treated fairly and compliantly in their relevant territory
  • We take care of all HR matters, and can answer any and all HR queries you may have e.g. maternity/paternity leave, holidays, sick pay, and more
  • We provide compliant contracts, process local payroll, and file taxes
  • We issue payslips and handle payments to the employee and authorities
Your Company
  • You find and manage your employees’ daily tasks
  • You support their development through their work
  • You follow our guidance on employment laws and best practices
  • You ensure payroll bills are paid to Agility EOR on time

 

Benefits of using an Employer of Record (EOR)

  • Faster and easier hiring: No need to set up your own legal entity.
  • Reduced risk and compliance burden: We handle the legal and administrative complexities.
  • More time and resources: Focus on your core business while we manage your employees.

There are various ways to employ people in Portugal, each with differing levels of costs and compliance:

Employee is employed by you and paid by you from your overseas Company

  • Pros: Seems like it would be the cheapest and easiest option.
  • Cons: Unable to pay the social security contributions which are required by law, and Portugal employment law will apply to the employee.

 

Entity Set-up

  • Pros: This option might be the most cost-effective solution for employing a significant number of personnel, typically exceeding 15
  • Cons: Establishing a legal business entity and maintaining strict compliance with Portugal employment and tax regulations can be a significant cost and time burden, especially for smaller operations. This approach often becomes impractical for businesses employing less than 15 individuals.

 

Using an Employer of Record
  • Pros: In Portugal, utilizing an Employer of Record service proves to be the most time-and-cost-effective solution for managing payroll, HR, and compliance tasks, particularly for establishing employer-employee relationships with teams smaller than 15 individuals.
  • Cons: Costly when hiring a large number of employees. Knowing which Employer of Record provider to choose can be difficult.

 

Hire a contractor in Portugal
  • Pros: This solution proves cost-effective when the worker isn’t exclusive to your company and has the flexibility to send a substitute for their duties on off days.
  • Cons: Engaging a full-time worker solely dedicated to your company without proper employment classification constitutes a legal violation in Portugal. Penalties for such misclassification can range from fines to criminal charges.

Yes, as long as the worker is working for other companies, is able to decide how to do their own work, and can send another contractor in their absence.

In Portugal, a worker solely dedicated to your company and whose duties and tasks are dictated by your organization must be classified as an employee. Failing to do so constitutes a breach of Portugal employment law.

Misclassifying an employee in Portugal can lead to substantial fines, the obligation to pay outstanding holiday pay and social security contributions, the potential need to establish a local presence, and even legal action from the employee for breached employment rights.

The initial steps to establishing your business in Portugal involve registering it with the Commercial Register and obtaining a trade license from the relevant authorities.

While the initial registration process appears simple, establishing a physical office for tax purposes, opening a Portugal bank account (which often requires in-person presence), managing payroll software compliant with Portugal regulations, and fulfilling tax filing obligations add complexities to the overall setup.

Hiring people in Portugal means adhering to specific legal obligations. In simpler terms, HR compliance ensures your company strictly follows all employment and work practice regulations.

But why is it so important? HR compliance in Portugal goes beyond mere formalities; it safeguards both your employees and your business. Following employment regulations guarantees fair treatment for your workforce, encompassing aspects like sick leave, annual leave, minimum wage, and appropriate working hours. This not only fosters a positive work environment but also minimizes the risk of financial penalties, legal repercussions, and even lawsuits arising from non-compliance.

Partnering with Agility EOR as your Employer of Record in Portugal simplifies tax and social security obligations. We manage all employee-related filings and contributions, ensuring complete compliance, so you can focus on running your business with peace of mind.

While Agility EOR handles the complexities of Portugal employment law and compliance, your company remains responsible for day-to-day management and communication with your team, including addressing performance issues, taking disciplinary actions when necessary, and fostering a positive work environment through open communication.

Agility EOR handles the legal side of things in Portugal, so you can focus on managing your team and their daily tasks.

In Portugal, both employers and employees have to pay taxes. For employers, these include social insurance contributions, labor accident insurance, and contributions to the Wage guarantee fund, and for employees, they include social insurance, solidarity tax and Income tax.

Employees working under a Portugal Employer of Record benefit from legal protections and receive a standard employment contract. This includes statutory benefits like maternity leave, annual leave, and sick pay, along with applicable tax credits.

It’s important to note that the Portugal public healthcare system provides coverage for all residents, not just employees.

Agility EOR handles the administrative burden of HR compliance for you:

Trusted Partners: Agility EOR collaborates with leading Portugal employment lawyers and advisors. This ensures your employment contracts and other essential documents strictly adhere to all local legal requirements.

In-Depth Knowledge: We maintain a deep understanding of intricate aspects of Portugal employment law, including payroll, social security, data privacy, notice periods, and remote work regulations.

Swift Action: If an issue arises, our internal team are immediately on hand to help and assist.

Wondering if expanding in Portugal is right for you?

Read on or speak to a member of our team now

Portugal Employer of Record Benefits

When you choose Agility EOR to expand in Portugal, we guarantee an EOR Service tailored to the needs of your business

Compliance

We are on top of regulatory changes in Portugal so you can relax.

Cost reduction

Allow our economies of scale to work in your favour.

High Service Levels

You and your employees have a dedicated account manager.

Fixed Cost Pricing

We will agree our professional fees up front based on your needs – no nasty surprises!

Consolidated Invoicing & Payments

Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.

Fast delivery

You can have 'boots on the ground' within days on our infrastructure.

Reduced Risk

All wage taxes are remitted in full to the Portugese authorities by professionals ensuring liabilities are met, giving you peace of mind.

Supply Chain Transparency

We only pay employees through local full employed solutions meaning Portugese payroll tax is paid on all funds.

Save Time and Money

Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.

Download our full Portugal Employment Guide

Find out all about employing in Portugal

Team pin

Get in touch

Our team of Employer of Record experts are ready to discuss your global expansion requirements. Fill out your details in the form provided and we will be in touch as soon as possible.