How to hire and pay employees in Portugal

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Before hiring


Before hiring employees in Portugal, there are some key things you’ll need to know. Firstly, Portugal has mandatory 13th and 14th salaries for employees. 13th and 14th salaries are two extra months of salary that are paid at the time of the employee's summer holiday and at Christmas.

Employers of Portugese employees should also know that maternity leave can be taken all at once or in two separate leaves of 30 days prior to the birth and 90 days after. Employees that have twins are entitled to an additional 30 days.

We know keeping track of all this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in Portugal below. 

At a glance









(based on region;
see here



of gross salary

13th / 14th SALARY

Mandatory 13th (summer holiday) and 14th (Christmas) salaries.

Good to know

  • Portugal has mandatory 13th and 14th salaries which are two extra month's salary. One is paid at the time of the employee's summer holiday and one is paid at Christmas.
  • Portugal has a comparatively low number of paid holidays for Europe with 22 days. An employee is not allowed to take more than 20 days of holiday in their first year of employment, but they have 13 national holidays as well as additional regional holidays.

Labor laws in


Working hours and overtime

Usual business hours in Portugal are from 9am to 6pm. The statutory maximum working week in Portugal is 40 hours and the statutory maximum working day is eight hours.

For overtime on working days, employees are paid 25% for the first hour and 37.5% for every subsequent hour. In the case of holidays, overtime is paid at 50%.

In Portugal, overtime should not exceed:

  • Two extra daily working hours (with a maximum of 48 weekly hours)
  • 150 hours per year for employees at companies with at least 50 employees
  • 175 hours per year employees at companies with at less 50 employees

Employment contracts

Non-compete contracts are allowed in Portugal, but compensation has to be paid whilst the non-compete is in place. The amount would have to be agreed beforehand and is typically 50% of the employee’s total compensation.

Probationary period

In Portugal, the probation period is typically:

  • 90 days for most workers
  • 180 days for employees who hold positions of "high complexity, trust or responsibility"
  • 240 days in a management or directorate role

Allowances and benefits

Employers in Portugal are responsible for providing the equipment and programs necessary for remote work. Employers are also required to cover expenses incurred by their employees for the use and maintenance of such equipment. Most employers provide a monthly allowance between EUR 40-60 to comply with this requirement. This is in addition to equipment provisions.

It’s common for employees in Portugal to receive a monthly lunch allowance or meal card. The allowance is paid as per the number of working days and ranges between EUR 4.77 and 7.63 per day.

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Benefits and leave in


Vacation time

Employees in Portugal are entitled to have 22 days of paid vacation.

Sick leave

Portuguese social security pays a sick leave benefit for employees who are absent from work as a result of illness or injury.

Employees can receive sick pay for up to 1095 days. Sick pay is generally 55% to 75% of the employee’s salary.

Parental leave

Pregnant employees are eligible for 30 days of maternity leave at full pay before a child’s birth, and six weeks following.

Maternity leave in Portugal can be taken all at once or in two separate leaves of 30 days prior to the birth and 90 days after. If an employee has twins, they’re entitled to an additional 30 days.

Alternatively, employees can choose to take 150 days of leave at 80% of their salary.

Fathers in Portugal are entitled to 10 days of paid paternity leave to be taken within 30 days of the birth of the child. Five of these days must be taken consecutively.


View a list of recognized public holidays in Portugal here.

Employer tax

In Portugal, taxes for employers total 26.5% and include 23.75% in social security contributions, 1.75% labour accident insurance, and 1% for the wage guarantee fund. 

Individual tax

Employees in Portugal are taxed between 14.5% and 48% depending on their income bracket. Employees also make social security contributions of 11%.

Termination in


Severance pay in Portugal is determined according to the seniority and experience of the employee. All employees who are terminated due to redundancy are entitled to severance pay.

Termination requirements
Notice period

Termination in Portugal is complex and must be based on performance or redundancy reasons.

Termination due to redundancy will have the following notice periods:

  • 15 days if the length of service is less than one year
  • 30 days if the length of service is at least one year but less than five years
  • 60 days is the length of service is at least five years but less than 10 years
  • 75 days from at least 10 years of service

Termination notice by the employee is dependent upon the number of years of service and is as follows:

  • 30 days if the length of employment is less than two years
  • 60 days if the length of employment is at least two years
Severance pay

Start hiring employees in


Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

Disclaimer: The information provided in this resource is for general educational purposes only and shall not be construed as legal advice. While Oyster strives to provide current and accurate information, Oyster makes no warranties or representations as to the correctness of the content provided and accepts no liability or responsibility for any errors or omissions in the content provided. By using this resource you acknowledge and agree that you do so at your own risk. The content of this resource is subject to change without notice.

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