Payroll and Benefits Guide Portugal
Last updated: May 16, 2023
Contributions
Employer
Employer Payroll Contributions
| 26.50% | Total Employment Cost |
| 23.75% | Social Security |
| 1.75% | Labor Accident Insurance |
| 1.00% | WGF (wage guarantee fund) |
Employee
Employee Payroll Contributions
| 11.00% | Total Employee Cost |
| 11.00% | Social Security |
Employee Income Tax
|
14.50% |
up to 7,479.00 EUR |
|
23.00% |
7,479.01 EUR to 11,284.00 EUR |
|
26.50% |
11,284.01 EUR to 15,992.00 EUR |
|
28.50% |
15,992.01 EUR to 20,700.00 EUR |
|
35.00% |
20,700.01 EUR to 26,355.00 EUR |
|
37.00% |
26,355.01 EUR to 38,632.00 EUR |
|
43.50% |
38,632.01 EUR to 50,483.00 EUR |
|
45.00% |
50,483.01 EUR to 78,834.00 EUR |
|
48.00% |
78,834.01 EUR and above |
Employer taxes
Employee taxes
Minimum Wage
General
The National Minimum Wage in Portugal is 760 EUR per month, based on a 14-months calculation.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
The payroll cycle in Portugal is generally a monthly cycle, with wages paid before the last day of each month.
13th Salary
There are mandatory 13th and 14th salary payments in Portugal, which are paid out in June (for holidays) and December (for Christmas), or can be paid within the 12 regular salaries.
Working Hours
General
The standard working hours in Portugal are 40 hours per week, 8 hours per day.
The maximum weekly and daily working hours can differ as stipulated in employment contract/collective bargaining agreements.
Overtime
The first 100 overtime hours are paid at a rate of:
- 125% salary for the first hour on week days.
- 137.5% salary for additional hours on week days.
- 150% salary on weekends public holidays.
Above 100 overtime hours are paid at a rate of:
- 150% salary for the first hour on week days.
- 175% salary for additional hours on week days.
- 200% salary on weekends and public holidays.
Overtime on Sunday requires weekend overtime pay + a compensatory rest day within the following 3 working days.
Working Week
Monday–Friday
Leave
Paid Time Off
Paid leave in Portugal is set in the employment contract as a minimum of 22 working days paid holiday per year, following completion of 1-year service, in addition to public holidays.
All paid time off requests must be applied for before the start of the leave and approved by the employer. The leave can be carried forward into the next year but must be used by 30th April.
During the first year of employment, an employee is entitled to 20 days of leave, accumulated as two days per month. If the employment starts in the first half of the year, the employee is entitled to eight days of vacation after completing 60 days of work, and if the calendar year ends before six months have been completed, the days are extended until 30th June the following year.
Public Holidays
In addition to the 13 national holidays listed below, each one of the 308 municipalities (counties) has its own regional or local municipal public holiday. Workers are entitled to take off the local holiday that corresponds to their place of work; the holiday date should be verified through the local authority.
Public holidays that fall on the weekend are usually lost.
Sick Days
To be entitled to receive a sickness benefit, the employee must be duly certified by a competent health service doctor as temporarily unable to work and completed employment service of a minimum of six calendar months, consecutive or otherwise. The first 3 days are paid by the employer at regular salary. From day 4 onward payment falls to Social Security. The daily benefit is calculated by applying a percentage to the employee’s reference remuneration.
This percentage varies according to the duration and nature of the illness:
- if the illness lasts for up to 30 days, the employee is entitled to 55% of the reference remuneration
- if the illness lasts between 31 and 90 days, the employee is entitled to 60% of the reference remuneration
- if the illness lasts between 91 to 365 days, the employee is entitled to 70% of the reference remuneration
- if the illness lasts more than 365 days, the employee is entitled to 75% of the reference remuneration
The period for which the benefit is granted depends on the duration of the illness and is also subject to the following maximum periods:
- up to 1,095 days in the case of employed workers, seafarers, and coastguard
- up to 365 days in the case of the self-employed and scientific research grant holders
Maternity Leave
Eligible expectant mothers are entitled to 100.00% of their usual salary rate, paid for by Social Security for 120 days. For an employee to be eligible, they must have been employed for at least 80 days of the preceding 12 months before the expected due date.
Parental leave is granted for the birth of a child under Portuguese law. This may be shared between both parents (in which case the total parental leave period may be 180 days and paid at 83.00% of the usual salary rate of pay. The mother is entitled to 30 days of parental leave before delivery and a minimum of six weeks following the birth.
Paternity Leave
Compulsory leave for fathers is 28 days, and voluntary paternity leave is 7 days. Fathers must take paternity leave within six weeks of the child’s birth and use at least five days’ leave immediately after the birth. The leave can be taken as a single period or in a series of days.
This leave is paid by social security at 100.00% of the employee’s average salary in the last six months.
Parental Leave
After the required six weeks of maternity leave and 28 days of paternity leave, the couple can decide who takes the next 78 or 108 days. If the couple takes a total of 150 days, the leave is 80.00% paid, and if they choose 120 days, they will receive 100.00%.
Other Leave
In Portugal, employees are entitled to up to 5 consecutive days of paid leave in the case of a family bereavement.
Employees are also entitled to 30 days of paid leave per year to provide urgent and essential care for a family member younger than 12, and 15 days for an older family member.
In the case of an employee getting married, the employee is entitled to 15 consecutive days of paid leave.
Termination
Termination Process
The termination process is standard in Portugal, with notice periods required unless an employer can provide sufficient cause for dismissal without notice, usually due to misconduct or disobedience. The lack of notice of termination must be in writing and sent to the relevant service under the Ministry of Labour, except in discipline dismissal.
Notice Period
In general, notice periods in Portugal are stipulated within the employment contract/collective agreement and are linked to the employee’s length of service, as below:
- 7 days’ notice if employed less than 6 months service or during the probation period
- One month notice if employed between 6 and 48 months
- 2 months’ notice if employed for more than 2 years
For fixed (or unfixed) term (temporary) employment agreements:
- 15 days for contracts, which agreed (or expected) duration is less than 6 months
- 30 days for contracts, which agreed (or expected) duration is equal to (or longer than) 6 months
Severance Pay
Fair dismissal based on objective grounds (i.e., redundancy) or dismissal due to unsuitability for the job: 12-18 days’ salary per year of service, up to 12 months’ base salary. The severance is partially (50 percent) paid by a fund (FCT) administered by social security, to which the employer must make contributions. Higher severance payments may be agreed upon and are a typical way to avoid litigation.
Severance might also be required for dismissals that occur during the 91st to 180th day of the probation period.
Compensation for termination of fixed term contracts is 24 days of base salary per year of service.
Probation Period
Portugal’s probation period for permanent employees is 90 days, 180 days for high technical/complexity roles, and 240 days for management, directorate, and equivalent responsibility roles.
For fixed term contracts the probation period is set to 15 days when the contract is agreed for an expected or fixed duration shorter than 6 months and 30 days probation for contracts with a duration equal to or longer than 6 months.
Common Benefits
General
- Meal vouchers
- Transportation allowance
- Gym allowance
- Private health insurance
- Private pension
- Bonus
- Additional leave
VISA
VISA
Any foreigners coming to work in Portugal for longer than six months need a residence certificate (Certificado de Registo). Most non-EU nationals will also need a Portuguese work permit before they can undertake employment in Portugal. In most cases, a Portuguese work permit is only granted when a job offer is confirmed, and once approved, they can continue the process of obtaining a Portuguese work visa or residence permit. After five years of residence in Portugal, you can claim Portuguese permanent residence, and after six years, Portuguese citizenship.
Portugal has quotas to limit the number of jobs that go to third-country nationals to improve employment opportunities for EU nationals. Most jobs need to be advertised to Portuguese and EU/EFTA citizens for 30 days before the Institute for Employment and Vocational Training in Portugal (IEFP) will classify them as jobs that non-EU employees can freely fill.
Remote Working
General
Remote working set ups are possible but there must be a written agreement in place to enact this remote work set up. In companies where there are 10 or more workers, employees with children up to 8 years old are entitled to work under a remote work regime (providing there is job and employer agreement).
Employers must legally refrain from contacting employees during their rest period, except in cases of force majeure. This might include not contacting workers by phone, text or possibly even email.
VAT
General
The standard rates of VAT in Portugal are 23.00% in Continental Portugal, in Azores, it is 18.00% and in Madeira, it is 22.00%.
Stay up to date on payroll & employment law changes
Version History
The National Minimum Wage in Portugal is now 705 EUR per month.
Questions & Answers
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Payroll and Benefits Guide
in Portugal
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Day | Date | Holiday | Notes |
|---|---|---|---|
| Sunday | Jan-1 | New Year's | |
| Friday | Apr-7 | Good Friday | |
| Sunday | Apr-9 | Easter Sunday | |
| Tuesday | Apr-25 | Liberation Day | |
| Monday | May-1 | Labor Day | |
| Thursday | Jun-8 | Corpus Christi | |
| Saturday | Jun-10 | National Day | |
| Tuesday | Aug-15 | Assumption Day | |
| Thursday | Oct-5 | Republic Day | |
| Wednesday | Nov-1 | All Saints’ Day | |
| Friday | Dec-1 | Independence Restoration Day | |
| Friday | Dec-8 | Immaculate Conception | |
| Monday | Dec-25 | Christmas |
Hi, was wondering if there have been any changes regarding unemployment due to covid-19?
Hi, thanks for the question. Unemployment benefits have changed. Those that were due to end in 2021 have been extended for 6 months. The process of extending unemployment benefits is automatically carried out from February onwards, so those who are unemployed and whose benefits end during the month of January will receive the days missing in January along with the February benefit.
From February onwards, unemployment benefits will normally be paid for another 6 months after their expected end date.
Hello,
I may be starting a 2 year contract in Portugal soon, from 1st June 2021 to 30th May 2023. Should I expect/ask for the holiday payment (13th salary instalment) be made in my first month of employment this June?
Hi Francesco, 13th and 14th-month salaries in Portugal can be paid in 2 ways: Either paid in June and December or paid in twelves (1/12) each month along with the base salary. Since you will be beginning in June, your 13th and 14th months’ salaries will most likely be prorated (bonus will be proportionate to the time you’ve worked).
Hi
Could you please tell me if my employer can keep 13th , 14th months salaries and my food cost in my basic salary ? As I know that the basic salary in Portugal is 665 euro monthly and food cost , 13th & 14th month salary should be added with amount of 665 euro but I noticed my employer calculated the following way
My salary at my work : 700 euro
In this 700 euro my employer keep food cost and 1/12 of 13th and 14th month salary
So it means my basic salary goes below 665 euro. Is not breaking the law ?
As I understand that if employer pay me for food and 1/12 of 13th and 14 then it should be like 700 euro + food cost + 1/12 of 13th and 14th month salaries and equal should be around 800 euro.
Does by employer has right to keep my 13th and 14th month salaries and food cost in the basic salary ?
I’m looking forward to hearing from you. Thank you so much
Hi Adnan, as stated above, 13th and 14th-month salaries in Portugal are mandatory and can be paid in 2 ways: Either paid in June and December or paid in twelves (1/12) each month along with the base salary. For specific legal questions, I recommend reaching out to an attorney.
Hi Erez, could you please share the article of law stating that 13th and 14th-month salaries are mandatory in Portugal and that they can be paid in the two ways you mention?
Thanks a million,
Zoe
Hi Zoe, See the following links for the articles on 13th salary (Christmas Bonus) and 14th salary (Holiday Allowance). https://dre.pt/dre/legislacao-consolidada/lei/2009-34546475-56397971
https://dre.pt/dre/legislacao-consolidada/lei/2009-34546475-56397972
Erez, are there any tax implications for opting for the 1/12 each month vs the 13th and 14th-month salaries paid in June and December? Thanks.
The implication will be the same for both – they are taxable according to the same rules.
Hi there,
Are you sure about those Employee taxes you mention? Are there different taxes IF the company is international?
According to this document, the taxes are different: https://s.economias.pt/docs/tabelas_irs_2021.pdf
Thanks,
João
Hi, just to clarify, are asking about total employee taxes or employee personal income tax?
How often do you have to conduct skill development training?
Hi, skills development training should happen at least once a year or can be split up into several training events. |Alternatively, an employee should be granted time off to attend training outside of your organization. Each employee is required to receive a minimum of 35 hours of training per year with exception to fixed-term contracts of less than 3 months.
Hi Emily, thanks for this information. I try to get this opportunity in my company. Do you know what is the law behind so that I can have an argument?
Hi Chris, the labor code is “Código do Trabalho; Lei n.º 105/2009, de 14 Setembro, alterado pela Lei 93/2019 de 4 de Setembro.”
Hi,
Just wanted to ask how much social security tax (in cash or percentage) should an employee pay, who is working as a domestic worker with a contract of €750 per month ? Cause I heard that the domestic tax is less.
Would greatly appreciate it.
Thanks.
Hi, thank you for your question. Unfortunately, this is out of the scope of information we are able to offer. I would suggest checking out Portugal’s Tax Authority website https://www.portaldasfinancas.gov.pt/at/html/index.html.
Hi i’m going to be working at portugal with a salary of 1250 gross i was wondering can someone tell me what’s the net amount ? and will it be enough for me to live in there ? and thank you!
Hey Mohamed, thank you for your question. You can find the employee taxes at the top of the page and can get a rough estimation of your net salary.
What are the number of time off days that can rollover to the next calendar year? When do the days from the previous year need to be used?
Hi Joy, in Portugal, employees are entitled to at least 22 days of annual leave, and possibly more depending on collective bargaining agreements. If they don’t use all of those days in the calendar year in which they were earned, they can be used in the following year until April 30. However, no more than 30 days of leave can be taken in any given calendar year.
Do employment contracts have to be written in Portuguese to be legally binding?
Hi Paul, contracts do not have to be in Portuguese in order to be legal, but they do have to be in a language that both parties (employer and employee) understand. It is also a good idea to have a Portuguese translation for both parties so that neither party could claim that they misunderstood the original.
Hi, must a Portugal software development industry employer, with less than 50 full-time employees, all working remotely during COVID-19, pay the employee for time off to get a COVID-19 vaccination?
Hi Christopher, The labor code in Portugal does not require employees paid time off to be vaccinated, but the Labor Conditions Authority (ACT) has clarified that absence from work to receive the Covid-19 vaccine “is justified and should not determine loss of pay.” Because of this, it’s best to speak directly to your employer to clarify their protocol.
Can we give a net fixed amount extra when peole work at home?
Hi, thank you for your question. This is possible, however, you would have to calculate the gross amount first.
Is it possible for you to hire a non-EU, Portuguese resident via a non-Portuguese entity? (Citizen of Russia, moved to Portugal on a Digital Nomad/Remote work visa D7 that comes with work authorization.)
Hi Ivan, there shouldn’t be any limitations on hiring a foreigner so long as they have obtained the right visas to be able to work. Any employing entity must report the hiring of a foreign worker to the Autoridade para as Condições do Trabalho (ACT) (Work Conditions Authority).
I joined in October, should I receive Christmas allowance in December (additional one month full salary)
Hi, the 13th salary you will receive will be prorated from your start date, you will not receive the full amount as you have yet to complete a full year of employment.
Hi, I was wondering if an employee quits, does she get paid for unused vacation time? For example, if the employee gives notice on January 1st, does she get paid for 22 days of vacation for that year?
Hi Carolyn, thank you for your question. In Portugal, leave is accrued based on a monthly basis and not given as a lump amount to be used throughout the year. The only leave that would need to be paid out if an employee resigns would be any unused leave that has already been accrued.
Thanks for your response! I have a related question: if an employee takes multiple weeks of leave in January and then quits in February, does the employee have to pay the company for the leave they took that was not accrued yet?
Hi Carolyn, my pleasure. If an employee takes multiple weeks of leave and then quits, then the negative leave balance is settled upon termination in the final payslip, usually as a deduction.
Hi, regarding this point “If the employment starts in the first half of the year, the employee is entitled to eight days of vacation after completing 60 days of work, and if the calendar year ends before six months has been completed, the days are extended until 30th June the following year.”
Could you confirm if the 8 days are applicable after 60 days or 6 months of employment?
Thank you!
Hi Andy, you are entitled to 8 days of vacation after 60 days of work if the you have started in the first half of the year (January–June).
Thanks! Just a follow-up question, are those 60 days working days or consecutive (2 months)?
Working days
Hi, I have a question. Do Portuguese payslip need to be itemized? So all additions and deductions separately from the base salary? Or can an employer lower the base salary itself because of, for example, sick days?
Hi Lana, thank you for your question. In short, yes, your employer is required to give you a breakdown of your salary remuneration. You can find a sample here https://papayaglobal.com/blog/portuguese-payslip-explained. Sick leave is paid at a different rate than your regular pay rate (a medical certificate must be submitted to your employer within 48 hours of being sick). Please see the sick leave section on this page for more information.
do i get anything if i resigin from my job,i worked in my company for more than 2 years
Hi Syed, if you resigned, you are not entitled to any kind of compensation. Please also note that if you resign without giving notice, you may be liable for paying your employer indemnity equal to the basic salary for the days that would have been your notice period.
Hello, I was wondering if employees also offer unpaided leave due to academic reasons? I need one month of unpaid leave in order to finish my studies.
Several factors determine if an employee can receive unpaid leave for academic reasons. In general, the employer may grant the worker, at the latter’s request, unpaid leave. The employee is entitled to more than 60 days of unpaid leave for attending a training course given by an educational institution or professional training, or to attend a course attended at an educational institution or under a specific program approved by a knowledgeable institute.
In the situation above, the employer may refuse to grant this leave for a variety of reasons, including if the employee has been on the same type of leave within the past 2 years, or if his seniority is less than 3 years, or if he holds a senior position that cannot be replaced.
My consultant asking me to work in steel factory and offering me 800-900 € a month. But i have a confusion because i heard in a youtube video that company in portugal will pay gross salary (800-900) + Food allowance (100) + House Rent Allowance (100) = 1000-1100€. Am i right if not please correct me.
These are non-mandatory benefits in Portugal so you will only receive them if they are in your collective bargaining agreement.
So if I start in April am I entitled to vacation pay in June or is it when my 6 months is up in October?
Yes, you can receive vacation pay but it will be prorated from your start date. You will not receive the full amount.
What is social security in payroll
of employer
Employers contribute 23.75% to social security and employees contribute 11%.
I am resigning after 1.5 years. What benefits am I entitled to receive from my company? I have given my company a notice period of 30 days. Please let me know.
Hi, As a general rule, and without knowing the specifics of a person’s employment terms, workers in Portugal who resign will receive:
-Remuneration relating to the last month of work;
-Remuneration in lieu of accrued and untaken holidays;
-Holiday remuneration, holiday bonus, and Christmas bonus proportional to the duration of employment in the year of termination;
-Any other credits owed to the employee as agreed by the company/contract.
Hi there, could you please tell me if an “insençao de horario” listed on my contract as a special remuneration to be paid 14 times a year, including holiday and Christmas allowance should be listed on my payslip separately and paid on top of my basic salary? When queried it didn’t appear to be paid, I was told it was included in my basic? Many thanks.
Hi, it is possible for payslips to separate out the 13/14 salaries even though they are paid within the 12 installments.
Hello and thank you for your reply. Should the insençao de horario be on a separate line as it is a payment for extra hours?
Hello, I’m resigning and still have 12 days of vacations left for this year. In this regard, I shall receive the allowance for the unused vacations, but using which formula? a) monthly salary / 30 days X 12 vacation days, or b) monthly salary / 22 days X 12 vacation days ? Appreciate it.
Hi, you should receive your monthly salary plus 12 vacation days. Pay for vacation days is calculated based on your daily wages. Daily wage calculation is roughly one months’ salary divided by 21 days.
I’m resigning after 20 years and want to keep the mobile number I’ve had since 2007. At the time I was told it could be used for business and personal use and now it’d be very inconvenient to have to change it. My employer is saying the number belongs to her. Do I have any rights?
Normally, any tools of trade (such as laptops, mobile phones etc) provided by the employer will have to be surrendered upon termination of employment. You may also check if your company has any internal policies about technological equipment.
Hi All,
About 24×7 Shift Work , is there a fix shift allowance or % of Salary? Can anyone clarify the rules for Shift Work in Portugal?
Appreciated
In Portugal, labor law and jurisprudence do consider the FULL ‘on call’ period as working time regardless of whether the worker performs any duties during those shifts or not. In the ‘on-call’ period, workers must be available to perform any tasks or duties required.
Setting up ‘on-call’ compensation can be done in one of the following ways:
1. If the ‘on call’ shifts are more or less fixed and pre known then the worker should be offered a monthly fixed allowance to compensate in the form of an “availability allowance”. The amount of allowance should be agreed upon between the employer and worker.
2. The worker is paid as overtime for the full-on call shifts as defined in the Portuguese labor law, knowing that the annual limit for overtime is 175 hours, paid on rest days at 150% salary rate and on regular working days at 125% for the 1st hour and 137.5% salary on further hours. A flat rate can be agreed upon as long is not lower than the aforementioned overtime pay rates.
3. A mix of the two is possible but it must be pre-agreed the fixed part, which will be paid as a taxable allowance and subject to Social contributions, and the additional payment for the actual work performed during an on-call shift will be paid as overtime, which is also taxable and subject to Social security contributions.
Thank you Erez, really appreciated the detail.
If an employee needs to have a business trip abroad what regulations should an employer folllow?
The most common method is that the employer follows is the Per diem method in Portugal for business trips. Per diems in Portugal are known as “ajudas de custo” and are set daily allowances which are tax exempt. In Portugal there aren’t specific per diem policy rates for the private sector, so the figures are the ones used by the public sector.
Hi, regarding the 13th and 14th-month salaries in Portugal. I understand that there are 2 ways in which it can be paid. However, are there any tax implications for choosing for it to be paid in June and December versus paid in twelves (1/12) each month along with the base salary. Thanks.
No tax implication. It is just a manner of administration. The 13th and 14th months’ salaries are pro-rated at the moment of payment.
Hello, I have a question, I was wondering whether you are required by law to cover shifts on your days off if your company are short of staff?
Workers should not be contacted outside of their working hours. If the worker does pre-agree to work any overtime it must be compensated.
Hi ! I have a question related to a personal situation
If I work under a fixed term contract (12 months) and decide to leave before the end. Am I still supposed to receive the bonus agreed in the contract (or a prorata) ? It is based on performance and evaluated every December.
They are telling me that because I leave before December I have no right to receive this bonus / a portion of it
Thanks a lot
(PS: this is not the Christmas bonus or holiday bonus but a separate one)
Our advice cannot be given without knowing the exact details of your contract. The bonus clause in your contract should be reviewed by an expert.
Can any one explain about in my December slip thrre is mention Natal and Férias.
Hi Ahmad, In Portugal, there are 14 salaries, one of which is considered a Christmas Bonus and paid in December.
Thanks alot 😊
Hi,
Thanks for this information.
On the Common Benefits, are these meant to be standard? as i do not get transport, gym or Pension from my company.
Further, I am due to take leave for surgery and will be off for 2 weeks, am I right in saying I will only paid 55% of my salary during my time off?
Thanks
Baz
Hi, common benefits do not mean every company will give them, it really depends on each individual company and their approach to benefits. Regarding your surgery leave, providing the doctor has signed off the worker, the first 30 days of sick leave is paid at 55% salary.
Hi, I have been told I have to visit the doctor for a medical in order to work, this is compulsory in Portugal, but I have been told I need to do this on my own time and not during my working hours. Is this correct? As I am doing in for my company I would have thought it should be done in their time not mine.
Hello, these check ups are almost always conduced during the day so workers should be given time off in the workday to attend the check-up.