Hiring in Portugal: Complete Guide 2027
Everything you need to know about hiring and managing employees in Portugal
Overview
Portugal is one of Europe's most cost-effective places to hire EU-based talent. Lisbon and Porto host engineering, product and shared-services teams for companies that cannot pay German or Dutch salaries, and English proficiency is high. The trade-off is a protective Labour Code: salaries are paid 14 times a year, fixed-term contracts need a written reason and permanent contracts end only for just cause, redundancy or unsuitability. Employer on-costs run about 25% on each payment, 23.75% of it Segurança Social. An EOR carries the entity, the registrations and the 14-payment calendar.
Currency
Primary Language
Payroll Tax
Pay Frequency
Overview
Employer Costs
Employer Social Contributions
Mandatory Benefits
EOR Service Fee
Total Additional Cost
Employee Deductions
Income Tax
Employee Social Contributions
Mandatory Employee Benefits
PAYROLL & SETUP
Setting Up Payroll in Portugal
Portuguese payroll runs monthly in EUR and starts with three registrations: the NIPC at the Autoridade Tributária, the employer number (NISS) at Segurança Social and a mandatory work accident policy. Employer contributions in 2026 are 23.75% of gross pay with no ceiling, plus about 1% accident insurance; the employee pays 11%, 34.75% in total. Salaries are paid 14 times a year: the holiday subsidy (subsídio de férias) and the Christmas subsidy (subsídio de Natal) each equal one month and carry the same 23.75%. The meal allowance is tax-free up to €6 a day in cash or €10.20 on a card. The minimum wage is €920 a month in 2026 (14 payments), up from €870 in 2025. IRS withholding in 2026 runs over nine brackets from 12.5% to 48%, plus a solidarity surcharge above €80,000; NHR closed to new applicants in 2024 and IFICI taxes eligible research and innovation roles at a flat 20%. An EOR files the monthly Declaração de Remunerações, the withholding and the payslip, and pays the two subsidies in June and December or in twelfths.
Key Labor Laws &
Requirements
Employment Contracts
- Written contract required for fixed-term and part-time work
- Probation 90 days (180 for technical or trust roles)
- Fixed-term limited to 2 years with a justified reason
Leave & Time Off
- 22 working days of paid leave plus 13 public holidays
- Sick pay from Segurança Social from day 4 (55–75%)
- Parental leave of 120 or 150 days shared by both parents
Termination Rules
- Notice of 15 to 75 days by tenure for redundancy
- Severance 14 days per year of service (12 for 2013–2023)
- Dismissal only for just cause, redundancy or unsuitability
COMPLIANCE
Fixed-Term Contracts and Dismissal Compliance in Portugal
Portugal has no at-will dismissal. A permanent contract (sem termo) ends for just cause, through redundancy (extinção do posto de trabalho) or for unsuitability, each with its own written procedure. Severance is 14 days of base pay and seniority pay per year of service for contracts since 2023 (12 days for 2013–2023 service), partly funded by the compensation funds. Redundancy notice runs from 15 to 75 days by tenure. Fixed-term contracts need a justified reason written in, stop at two years including renewals and convert to permanent past the limit. Probation is 90 days for most roles, 180 for technical or trust positions, 15 days on short fixed-term contracts. An EOR picks the contract type, documents the reason and runs the procedure.
Key Challenges
- Fourteen salary payments a year: holiday and Christmas subsidies
- Fixed-term contracts need a justified reason and stop at 2 years
- No at-will dismissal: just cause, redundancy or unsuitability only
- Sector collective agreements (CCT) extended to non-signatories
- Employer on-costs of about 25% on every one of the 14 payments
Country Highlights
Advantages
- Lisbon and Porto tech hubs with strong English proficiency
- Salaries 30–50% below Germany or the Netherlands for similar roles
- Eurozone, EU law and a time zone aligned with London
- Large shared-services and customer-support talent base
- Fast onboarding: an EOR declares a hire to Segurança Social in 1–3 days
Popular Industries & Roles
Technology
Avg. Salary: €35k-€65k
Limassol and Nicosia host relocated engineering teams from fintech, gaming and forex platforms, hiring in English
Shared Services & Customer Support
Avg. Salary: €22k-€38k
Portugal is a leading European base for multilingual shared services, customer support and finance operations centres
Engineering & Renewable Energy
Avg. Salary: €32k-€60k
Renewable energy, electronics and automotive component engineering draw on strong university pipelines in Porto, Aveiro and Braga
Top 3 Providers in Portugal
Based on our analysis of pricing, compliance record, service quality, and customer reviews
Deel
- EOR in 130+ countries; owned entities in 120+
- Contractor and EOR in one platform
- 300+ integrations including Slack, Workday
- AI-powered compliance automation
Remote
- 100% owned entity model globally
- Compliance-first with IP protection
- Strong contractor management at $29/month
- Ranked #1 for compliance on G2
LMW HR Group
- South European EOR, Athens-founded 2013
- 6 owned offices across Europe
- Greece, Cyprus, Malta, Portugal, Czech, UK
- 2,000+ employees managed; pricing on request
Frequently asked questions
Hiring in Portugal through an EOR, in short.
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How much does an employer pay on top of salary in Portugal?
Employer contributions in Portugal come to 23.75%; the largest mandatory line is 13th + 14th salary. With the other statutory benefits and a typical EOR fee, budget ~35–45% on top of gross salary.
What does an EOR charge per employee in Portugal?
Published EOR fees in Portugal run $450–650/mo per employee per month, with any setup fee negotiated separately. The fee is flat, so it weighs less as the salary rises.
What does an employee in Portugal pay in tax and contributions?
Income tax is 12.5% to 48% progressive and employee social contributions are 11% (11% Segurança Social), both withheld by the employer on every pay run.
How long does it take to hire through an EOR in Portugal?
1-3 Days once the employee's documents are in. The contract is issued by the EOR's local entity and payroll runs on the local cycle (Monthly).
Which EOR providers rank best in Portugal?
Deel, Remote and LMW HR Group hold the first three places in our ranking for hiring in Portugal. The full top 10, with the questions to put to each provider before signing, is here: Top 10 EOR providers in Portugal.
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