How Much Does It Cost to Hire in Portugal in 2025?

    Created at: 3 March 2026 - Last updated: 3 March 2026

    cost-of-hiring-portugal-2025Employers in Portugal face a 26.5% payroll contribution on top of gross salary, mandatory 13th and 14th-month salaries, and benefits such as annual leave and family-related leave. Additionally, employees pay 11% social security and progressive income tax up to 48%; however, employers do take care of it. 

    This blog details all taxes employers must handle in Portugal, in addition to the benefits they must provide in 2025.

    What Taxes Do Employers Pay When Hiring in Portugal?

    Employer Taxes

    The total payroll contribution is 26.63% on top of the employee’s gross salary. This amount covers:

    • Social security contributions: 23.75%
    • Labour Accident Insurance: 1.88%
    • Wage Guarantee Fund: 1.00%

     

    Additional Compulsory Employee Taxes to Handle

    Employee Taxes  Amount (%) Relevant Annual Pay
    Employee Social Security 11% All amounts
    Employee Income Tax 13% Up to 8,059 €
    18% 8,059 € - 12,160 €
    23% 12,160 € - 17,233 €
    26% 17,233 € - 22,306 €
    32.75% 22,306 € - 28,400 €
    37% 28,400 € - 41,629 €
    43.5% 41,629 € - 44,897 €
    45% 44,897 € - 83,696 €
    48% Above 83,696 €

    Table 1. This deductible amount falls under the total gross salary the company gives to the employee; however, the other employer social security contributions are calculated before the gross salary.

    Additionally, in Portugal, there is an additional solidarity charge:

    • For amounts above 80,000 €, the amount is 2.5%
    • For amounts above 250,000 €, the surcharge increases to 5%



    What Employers in Portugal must Provide?

    Cost Type Employer Costs Notes
    Additional Salaries  Mandatory 13th and 14th month salaries  
    Public Holidays  20 days  
    Personal Holidays Allowance
    • 20 working days (<1 year of service)
    • 22 working days (>1 year of service)
    		  Counted annually.
    Sick Leave Protection
    • 55% (<30 days)
    • 60% (>31 days and <90 days)
    • 70% (>91 days and <365 days)
    • 75% (>365 days)
    		 The first 3 days are unpaid.
    Paternity and Maternity Leaves
    • Paternity Leave: <28 working days
    • Maternity Leave: <120 working days
    		 Those leaves are granted for the birth of a child under Portuguese law.
    Training Hours
    • Minimum of 40 hours per year
    		  
    Worker Accident Insurance
    • 1.75% of annual gross salary
    		 Included in the 26.5% payroll contribution

    Table 2. The benefits in this table are compulsory for employers in Portugal to provide, but under certain conditions; they may change. This table is limited to the most important benefits. 

    • If you would like to know more about the maternity leave rules in Portugal and across other European countries, check this blog: Maternity Leave Rules in Europe.

     

    Final Thoughts

    In short, Portugal’s employment market is attractive for international companies thanks to its cost-effective, skilled workforce and strategic location. However, employers must account for statutory obligations such as a 26.5% payroll contribution on top of gross salary, which includes social security, worker accident insurance, and a wage guarantee fund. Along with the obligatory expenses, their is also customary practices such as offering secondary benefits like meal vouchers.

    In addition, employees face 11% social security deductions and progressive income tax rates ranging from 13% to 48%, with surcharges for high earners. Employers are also required to provide benefits like 13th and 14th-month salaries, 20–22 days of annual leave, sick leave coverage, and family-related leave for paternity, maternity, and marriage.

     

    How EuroDev Helps Foreign Companies Hire All Over Europe?

    EuroDev makes hiring across Europe easier by acting as your European HR partner, offering PEO and EOR services so you can hire without setting up a local entity. We manage recruitment, payroll, social security contributions, and statutory benefits in full compliance with local regulations.

    With around 29 years of experience, we ensure a smooth process for both employers and employees, making European expansion simple.

    Contact us, and we will help you expand into Europe hassle-free.

     

    Written by Sven Brands, HR Outsourcing International Account Manager at EuroDev. 

    Disclaimer: While we strive to provide accurate and timely information, please note that HR policies and regulations can change frequently. It is recommended that you seek guidance from our consultants to ensure that the data presented here is current and accurate.

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