Portugal PEO & EOR services

Portugal offers a diverse range of PEO/EOR employment opportunities, attracting both domestic and international talent to contribute to its thriving workforce.

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PEO/EOR employment contracts in Portugal

What are the most common employment contracts through PEO/EOR services in Portugal?

Unless otherwise specified by the employer and employee, employment contracts are deemed open-ended (i.e. permanent/indefinite employment).

Fixed-term contracts are permitted by law provided that they are executed in written form and provided they are meant to fill a role required on the basis of a merely temporary need of the employing company.

Hence, if there is no written contract, the employment contract will be deemed to be an open-ended contract.

PEO/EOR employment termination and notice period in Portugal

There is no "at-will" termination in Portugal. In order to terminate the employment contract of an employee, sufficient reasoning must be provided.

Compared to many other European countries, the notice period in Portugal is short. The Portuguese PEO/EOR employer must work with the following minimum notice periods, which vary in accordance with each employee’s seniority:

Length of employment	Notice Period Portugal
< 1 year	15 days
1 year to 5 years	30 days
5 years to 10 years	60 days
> 10 years	75 days

Fixed-term contracts can be terminated automatically on their expiry date or upon completion of specified tasks.

Portugal PEO/EOR employment: Salary, employer costs and working hours

In 2019, the average annual wage in Portugal was $26.633,72. This is lower than the average annual wage in the United States: $65.835,58.

As a PEO/EOR employer in Portugal, the actual employer costs are around 26.5% higher than the gross annual salary. Based on a $26.633,72 annual salary, the employment costs would be $33.691,66.

See all average salaries in Europe in 2022

Business working hours in Portugal may be slightly different from what you are used to. A typical working day in Portugal starts at 9 am until 1 pm with a two-hour break for lunch and then resumes at 3 pm until 7 pm.

Paid vacation leave and public holidays in Portugal PEO/EOR employment

All employees in Portugal are entitled to a period of paid annual leave of at least 22 working days per calendar year. The right to leave is acquired by entering into a contract of employment and takes effect as of 1 January of each calendar year.

Portugal has 13 mandatory holidays:

New Year's Day – 1 January
Good Friday
Easter Sunday
Freedom Day – 25 April
Labor Day – 1 May
Corpus Christi – May/June
Portugal Day – 10 June
Assumption Day – 15 August
Establishment of the Republic – 5 October
All Saints Day – 1 November
Restoration of Independence – 1 December
Immaculate Conception – 8 December
Christmas Day – 25 December

Maternity and paternity leave through PEO/EOR in Portugal

New mothers are entitled to maternity leave in Portugal at 100% of their pay for 120 consecutive days. They can take a maximum of 30 of these days before the baby's birth, and they must take at least 42 days of leave (six weeks) after birth.

To be entitled to parental leave in Portugal, an employee must have worked and made at least six months of social security contributions by the time of their claim.

Paternity leave in Portugal is allowed for working fathers for five consecutive days after the birth of the baby, plus an additional 10 days within 30 days of the birth, which do not need to be consecutive. After this period, a father has the option to take leave for an additional 10 consecutive days within the period that the mother is on maternity leave. If twins are born, an additional two days are added to each period for each child.

Find out everything you need to know about maternity leave in other European countries.

Social Security tax for Portugal PEO/EOR employers

What are the primary social security contribution rates for Portugal PEO/EOR employers?

Portuguese employers must, just like other employers in European countries, pay social contribution taxes. With 23.75%, the social security (employer) tax in Portugal is higher than the EU average.

Below, you can find an overview of the social security taxes and other payroll contributions you, as an employer in Portugal, have to pay on an annual/monthly basis:

Social Security	23.75%
Labor Accident Insurance	1.75%
Wage Guarantee Fund	1.00%
Total Employment Costs	26.50%

*Industrial injury insurance is calculated based on the type of industry, number of employees, and the used insurance company.

Also important: Portugal has 14 salaries, 12 months, holidays, and Christmas allowances.

Employee Income Tax:

< € 7.112	14.5%
€ 7.112 – € 10.732	23.0%
€ 10.732 – € 20.322	28.5%
€ 20.322 – € 25.075	35.0%
€ 25.075 – € 36.967	37.0%
€ 36.967 – € 80.822	45.0%
> € 80.822	48.0%

To learn more about the social security tax in Europe, we invite you to read this article on Social Security Tax Rates for Employers Across Europe.

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Europe is home to a diverse range of countries, each with its unique employment characteristics. These reflect the diverse economic and cultural landscapes across the continent.

Portugal PEO & EOR services

PEO/EOR employment contracts in Portugal

PEO/EOR employment termination and notice period in Portugal

Portugal PEO/EOR employment: Salary, employer costs and working hours

Paid vacation leave and public holidays in Portugal PEO/EOR employment

Maternity and paternity leave through PEO/EOR in Portugal

Social Security tax for Portugal PEO/EOR employers

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