Country Spotlight: Employer of Record in Portugal
Portugal has won more UEFA European Championships per capita than almost any other nation. But here is a stat that matters just as much for business leaders: it is also one of Europe's fastest-growing tech talent hubs, and hiring there without the right structure will cost you.
Cristiano Ronaldo did not become the world's best footballer by accident. Behind every brilliant performance was a team, a structure, and a system working in perfect sync. Expanding your workforce into Portugal demands the same thinking. The opportunity is real, but so is the complexity.
This spotlight breaks down everything HR leaders, global expansion teams, and C-suite decision-makers need to know about hiring in Portugal through an Employer of Record (EOR) -- from tax obligations and payroll cycles to leave entitlements and termination rules.
Portugal at a glance
| Capital | Lisbon | Currency | Euro(EUR) |
| Language | Portugese | Fiscal Year | Jan to Dec |
| Time Zone | UTC +00:00 | Min. Wage (2026) | EUR 920/month |
Key industries include technology, pharmaceuticals, automotive, and food and beverage. With a growing tech ecosystem in Lisbon and Porto and wages that remain competitive versus Western European peers, Portugal is a market worth serious attention.
What is an Employer of Record?
An EOR acts as the legal employer on your behalf -- handling payroll, taxes, benefits, onboarding, and compliance with local labour law -- while your employee works directly for you on operations. It lets you hire in Portugal without setting up a local legal entity, which typically takes 4 to 8 weeks and involves registering with the Portuguese Tax and Customs Authority, opening a local bank account, and navigating the country's corporate law requirements. With an EOR, you are operational in days.
For organisations testing a new market, scaling a remote team, or hiring a single specialist in Lisbon, the EOR model removes the infrastructure burden entirely. You get compliant employment from day one without the overhead of entity maintenance, local accounting, or dedicated HR administration in-country.
ALSO READ | Portugal: A Guideline to Payroll and Employer of Record
Payroll, taxes, and contributions
Employer and employee contributions
| Contribution | Employee | Employer |
|---|---|---|
| Social Security | 11.00% | 23.75% |
| Labour Accident Insurance | - | 1.75% |
| Wage Guarantee Fund (WGF) | - | 1.00% |
| Total | 11.00% | 26.50% |
Income tax brackets (effective January 1, 2026)
| Annual Income (EUR) | Tax Rate |
|---|---|
| Up to EUR 8,342 | 12.50% |
| EUR 8,342 to EUR 12,587 | 15.70% |
| EUR 12,587 to EUR 17,838 | 21.20% |
| EUR 17,838 to EUR 23,089 | 24.10% |
| EUR 23,089 to EUR 29,397 | 31.10% |
| EUR 29,397 to EUR 43,090 | 34.90% |
| EUR 43,090 to EUR 46,566 | 43.10% |
| EUR 46,566 to EUR 86,634 | 44.60% |
| Over EUR 86,634 | 48.00% |
Pro Tip: The 13th and 14th Salary
Portugal mandates both a 13th salary (vacation pay, typically mid-year) and a 14th salary (Christmas pay, before December 25). These are legal obligations, not bonuses. Budget for them from day one.
Salaries must be paid at least once a month. The fiscal year runs from January to December, and tax records must be retained for a minimum of four years.
Hiring, onboarding, and probation
Anti-discrimination rules apply at every stage of the hiring process. Employers cannot ask candidates about their private life, health, or pregnancy unless directly relevant to the role, and any such inquiry must be documented and justified in writing. Employees currently on fixed-term contracts are also given legal preference when permanent positions become available, a nuance that matters when managing internal mobility.
Mandatory onboarding documents include full identification details, tax and social security numbers, IBAN for salary payment, a residence permit for non-EU workers, and a pre-admission medical examination. The medical exam must be completed before the employee starts or, in urgent cases, within 15 days of the start date.
Probation periods vary by role: 90 days for general employment, 180 days for technical or specialist roles and first-time employees, 240 days for directors and senior executives, and 15 to 30 days for fixed-term contracts. During probation, either party may terminate without notice, though the employer must give 7 days notice after 60 days and 15 days notice after 120 days.
Leave entitlements
Portugal has one of Europe's most comprehensive leave frameworks, and it is one of the first things candidates notice when evaluating an offer. Compliance is non-negotiable, and understanding the full picture helps you set accurate expectations with both employees and internal stakeholders.
- 22 days minimum paid annual leave per year
- 13 mandatory public holidays
- Sick leave paid by social security at 55% to 75% of earnings, depending on duration
- Maternity and shared parental leave at 100% pay for up to 150 days
- 15 consecutive paid days of marriage leave
- Up to 20 days of bereavement leave for the loss of a spouse or child
Portugal introduced gestational mourning leave -- parents can take up to 3 consecutive days of justified absence following pregnancy loss. HR teams should be familiar with this provision to handle sensitive situations with both care and compliance.
Overtime, termination, and severance
Overtime is tightly regulated. Work beyond normal hours is capped at 2 additional hours per day and at 150-175 hours per year, depending on whether the company employs more or fewer than 50 people. Up to 200 hours per year is permitted if covered by a collective labour agreement. Pay premiums apply: the first overtime hour attracts a 25% surcharge, subsequent hours attract a 37.5% surcharge, and work performed on public holidays or days off attracts a 50% surcharge.
Notice periods
| Length of Service | Notice Period |
|---|---|
| Less than 1 year | 15 days |
| 1 to 5 years | 30 days |
| 5 to 10 years | 60 days |
| More than 10 years | 75 days |
Severance for indefinite contracts is 18 days of pay per year of service for the first three years, then 12 days per year thereafter. For fixed-term contracts, the rate is 18 days per year of service throughout.
TUNE IN NOW | Payroll Passport Ep 96. Portugal
Visas and work permits
EU, EEA, and Swiss nationals do not require a work visa to be employed in Portugal, though stays exceeding six months require a Residence Certificate (Certificado de Registo). Non-EU nationals need a work permit secured before starting employment, and this is typically contingent on a confirmed job offer from a registered employer. Permanent residency can be applied for after five years in the country, and Portuguese citizenship becomes available after six years.
An EOR simplifies this process significantly. Because the EOR serves as the registered employer in Portugal, it can act as the sponsoring entity for work permit applications, reducing the administrative burden on your internal HR or legal team and accelerating the path to a compliant hire.
Why Choose Neeyamo for Your EOR Needs?
Neeyamo supports global organizations in hiring and managing talent across 150+ countries, including Portugal. With expertise in payroll, compliance, and workforce management, Neeyamo enables seamless expansion without administrative complexity.
Talk to our country EOR expert at irene.jones@neeyamo.com or explore Neeyamo’s Global Employer of Record solutions.
