EORs in Portugal: Everything you need to know
Companies looking for tech talent are turning their attention to Portugal. Thanks to a business-friendly environment that supports the development of enterprises of all sizes and a worker-friendly culture, the country has become a popular destination for engaged and talented professionals. Portugal’s vibrant culture and comparatively low cost of living also support a high quality of life that attracts talent from all over the world. Digital nomads and remote employees are flocking to the country to find better work-life balance.
For companies located outside of Portugal, hiring people across borders isn’t as straightforward as hiring within their home country. Portugal has strict labor laws that can result in hefty sanctions if they aren’t followed. Not to mention, establishing a Portuguese entity to manage overseas employees can be complex. For that reason, many companies look to EORs, or employers of record in Portugal to stay in compliance with the law.
EORs in Portugal
Hiring international talent allows your company to tap into a deeper talent pool and efficiently enter foreign markets, like Portugal. It also allows you to retain employees who relocate, even if the relocation happens unexpectedly. Using an EOR to hire in Portugal makes this process easier, eliminating many of the usual headaches that come with employing a global team.
An EOR is a third-party organization that acts as an employer for legal and tax purposes for your international workforce. EORs perform human resources and legal functions, managing tasks like payroll, taxes and benefits for your remote employees,, providing their expertise in relevant labor laws, payroll, corporate culture, and more. Working with one avoids the complexities of establishing local entities in different countries where your team members live.
Oyster’s global employment platform makes hiring across borders simple by handling all aspects of employment for you, including:
- Compliance with local laws
- Time off management
Talk to one of our advisors today to find out how our global employment platform can help onboard team members in Portugal without the usual headaches.
A few things to know about hiring in Portugal
If you are considering hiring team members who reside in Portugal, there are some key things you need to know. Although there are some similarities between the U.S. and Portugal, including rules regarding the classification of workers as employees or contractors, there are some crucial differences to be aware of before hiring.
Employees receive 13th and 14th month salaries
It is mandatory for employers to pay employees two bonus payments, each equivalent to one month’s salary. These payments, known as the 13th and 14th month salaries, or Christmas and Holiday allowances, are generally paid before December 15th and in July.
Salaried employees are paid overtime
The legal working day in Portugal is eight hours. For time worked beyond those hours, employees are entitled to overtime. There are also limits on how many overtime hours can be worked based on the size of the company.
Employers must provide work equipment for their employees.
Employers are responsible for supplying their employees with the tools and equipment they need to do their jobs, as well as paying for any expenses related to equipment. For remote employees, this is typically paid via a monthly allowance.
Portugal observes 13 national paid holidays
In addition to the national holidays, employees in some regions may qualify for paid time off for local observances. These holidays are in addition to paid vacation (holiday) time, which starts at 22 days in the first year.
New parents are entitled to paid time off
Portugal provides both maternity and paternity leave for new parents, paid for by Social Security. New mothers receive a mandatory six weeks of leave, while new fathers have 20 days of mandatory leave. The parents can then share up to 150 days of leave.
Letting employees go is complex
Employers in Portugal need to provide employees with adequate notice of termination, which varies by length of service. Non-compete agreements are legal, but employers must pay the employee while the agreement is in effect.
You can find out more about hiring in Portugal in our complete guide, which can help you hire, pay, and take care of your employees without hassles.
How much does it cost to hire in Portugal?
Check out our cost of hiring in Portugal tool to work out how much tax you and your employee might have to pay on top of salary payments.
Hiring in Portugal
When you want to hire in Portugal, accessing all the information you need to do so legally and efficiently can be a time-consuming and complex endeavor. Do not take risks by relying on a piecemeal approach that relies on timesheets, emails, and a limited understanding of local labor laws. Instead, rely on Oyster to handle the heavy lifting. With the ability to manage HR and compliance in more than 180 countries, Oyster makes managing a global workforce not only possible but simple.
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international talent the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.