| Key Takeaways |
|---|
| 1. Payroll operates monthly with a minimum wage of EUR 870/month, and employees are entitled to a statutory Christmas bonus. |
| 2. Personal income tax ranges from 12.5%–48% for residents, with non-residents taxed at 25% and additional solidarity tax for high earners. |
| 3. Social Security contributions apply to both employees and employers (11% for employees, 23.75% for employers) plus occupational accident insurance. |
| 4. Standard working hours are 40 per week, with daily rest breaks, regulated overtime limits, and weekly rest days. |
| 5. Annual leave is 22 days, plus 13 public holidays, maternity/paternity leave, parental leave, and other paid/unpaid leaves. |
| 6. Termination requires just cause or statutory notice, with severance pay based on tenure and contract type. |
| 7. Probation and parental leave policies vary depending on employee role, seniority, and contract type. |
Discover the global hiring and employment landscape in Portugal – a Southern European country with a growing economy and a favorable business environment. Portugal offers a strategic location, attractive investment opportunities, and a skilled labor force.
Personal Income Tax
Non-residents are taxed at a flat rate of 25% on their gross employment income, whereas tax residents are subject to the following progressive tax rates:
| Taxable Income (EUR) | Progressive Tax Rate (%) |
|---|---|
| Up to 8,059 | 12.5 |
| 8,060–12,160 | 16 |
| 12,161–17,233 | 21.5 |
| 17,234–22,306 | 24.4 |
| 22,307–28,400 | 31.4 |
| 28,401–41,629 | 34.9 |
| 41,630–44,987 | 43.1 |
| 44,988–83,696 | 44.6 |
| Over 83,696 | 48 |
An additional solidarity tax may apply to taxpayers with a taxable income exceeding EUR 80,000, as follows:
|
Taxable income (EUR) |
Solidarity tax rate (%) |
|
80,000–250,000 |
2.5% |
|
Over 250,000 |
5% |
Local Tax
There are no local taxes on employment income in Portugal.
Statutory Contributions
Employer Contributions
|
|
Contribution rate |
|
Social Security |
23.75% |
|
Occupational Accident Insurance |
Varies depending on the work and its risk classification |
Employee Contributions
|
|
Contribution rate |
|
Social Security |
11% |
Payment of Wages
The payment of salary shall be made on a fixed and equal period, which can either be done weekly, semi-monthly or monthly.
In the case of variable salary with a calculation period of more than 15 days, the employee may demand payment in fortnightly instalments.
Minimum Wage
Effective January 1, 2025, the national minimum wage in Portugal is set at EUR 870 per month.
Statutory Bonus
Employees shall be entitled to a Christmas bonus equivalent to a month's salary, which must be paid by December 15 of each year.
The value of the Christmas bonus is proportional to the length of service provided in the calendar year in the year the employee is hired, in the year the employment contract ends and in the event of suspension of the employment contract due to a fact relating to the employee.
Termination
Dismissal without just cause or for political or ideological reasons is prohibited. The employee's behavior which, due to its seriousness, makes the continuation of the employment relationship impossible constitutes just cause for dismissal.
When the employee's dismissal constitutes a disciplinary sanction, it may not be applied without prior hearing. Employers who intend to dismiss their employees for reasons attributable to the employee must generally produce a written statement of guilt and complete an evidentiary procedure before moving forward with their decision.
Notice Period
In the event of the termination of an indefinite-term contract, the following notice period shall be generally observed:
|
Length of service |
Notice period |
|
Up to 6 months |
7 days |
|
6 months–2 years |
30 days |
|
Over 2 years |
60 days |
An employee may resign without just cause by giving a written notice to the employer at least 30 or 60 days in advance, depending on whether the employee has been employed for up to 2 years or more than 2 years, respectively.
For fixed-term employment contracts, the employer or the employee must communicate their intention to terminate the contract in writing, 15 days or 8 days before the term expires, respectively.
Severance Pay
In the event of the termination of an indefinite-term contract, the employee shall generally be entitled to be compensated an amount equivalent to 24 days' base pay and daily allowances for each full year of seniority.
Probationary Period
There will be a probationary period in the initial stage of contracts of employment, during which both parties consider their interest in whether to maintain the contractual relationship or not.
In an employment contract for an indefinite period, the duration of the probationary period shall be as follows:
|
90 days |
180 days |
|
Most employees |
Employees holding positions of technical complexity, a high degree of responsibility or that require special qualifications |
|
Employees who perform functions of trust |
|
|
Those who are seeking their first job and are long-term unemployed |
In any case, the probationary period can last for 240 days for those holding a management or senior management position.
In a fixed-term employment contract, the probation has the following duration:
|
Contract duration |
Probationary period |
|
Less than 6 months |
15 days |
|
6 months or more |
30 days |
Generally, unless otherwise agreed in writing, either party may terminate the contract during the probationary period without prior notice and without invoking just cause, nor any right to compensation. However, the following shall apply:
|
Duration of probationary period |
Notice period |
|
More than 60 days |
7 days |
|
More than 120 days |
30 days |
Work Time Rules
Standard Working Hours
Normal working hours in Portugal are subject to a maximum of 8 hours per day and 40 hours per week.
Break Period
The daily working period must be interrupted by a rest break, lasting no less than an hour and no more than 2 hours, so that the employee does not work more than 5 hours consecutively, or 6 hours consecutively if that period is longer than 10 hours.
Furthermore, a mother who breastfeeds their child shall be entitled to time off work for this purpose for the duration of the breastfeeding period.
Daily time off for breastfeeding or lactation is taken in 2 separate periods, with a maximum duration of an hour each, unless another arrangement is agreed with the employer. In the case of multiple births, the time off shall be increased by an additional 30 minutes for each twin in addition to the first.
Overtime
Overtime may only be provided when the company has to cope with a possible and temporary increase in workload and there is no justification for hiring a worker for this purpose.
Overtime work on a normal working day is subject to a maximum of 2 hours and overtime performed on a weekly rest day or public holiday is limited to a number of hours equal to the normal daily working period. Depending on the size of the employer's enterprise, the following limits shall also apply:
|
Size |
Limits to overtime work |
|
Micro or small companies |
175 hours per year |
|
Medium or large companies |
150 hours per year |
Overtime shall be paid at the rate of hourly pay with the following increases:
|
Overtime hours |
Overtime pay |
|
Overtime of up to 100 hours per year |
|
|
1 hour, or a fraction thereof, on a working day |
+25% |
|
Each subsequent hour, or a fraction thereof, on a working day |
+37.5% |
|
Each hour, or a fraction thereof, on a weekly rest day or a public holiday |
+50% |
|
Overtime of more than 100 hours per year |
|
|
1 hour, or a fraction thereof, on a working day |
+50% |
|
Each subsequent hour, or a fraction thereof, on a working day |
+75% |
|
Each hour, or a fraction thereof, on a weekly rest day or a public holiday |
+100% |
Note: Overtime may also be worked in cases of force majeure or when it is essential to prevent or repair serious damage to the company or its viability, provided that the weekly working hours limit set out in Article 211 of the Labor Code is respected.
Weekly Rest Days
Employees shall be entitled to a daily rest period of at least 11 consecutive hours between working days and at least a day of rest per week, which usually falls on a Sunday.
The employer has a duty to refrain from contacting the employee during their rest period, except in cases of force majeure.
An employee who performs overtime work that prevents the enjoyment of daily rest is entitled to paid compensatory rest equivalent to the hours of rest missed, to be taken within 3 working days.
An employee who works on a mandatory weekly rest day is entitled to a paid compensatory rest day, to be taken within 3 working days.
Holiday and Leave Entitlements
Public Holidays
Employees shall be entitled to the remuneration corresponding to a public holiday without the employer being able to compensate it with overtime. There are 13 days of public holidays in Portugal for 2025.
| Holiday | Date |
|---|---|
| New Year’s Day | January 1 |
| Good Friday | April 18 |
| Easter Sunday | April 20 |
| Liberation Day | April 25 |
| Labor Day | May 1 |
| National Day | June 10 |
| Corpus Christi | June 19 |
| Assumption Day | August 15 |
| Republic Day | October 5 |
| All Saints’ Day | November 1 |
| Independence Restoration Day | December 1 |
| Immaculate Conception | December 8 |
| Christmas Day | December 25 |
On days considered to be mandatory holidays, all activities that are not permitted on Sundays must close or suspend work.
An employee who works normally on a public holiday in a company not obligated to suspend operations on that day is entitled to compensatory rest lasting half the number of hours worked or to an increase of 50% of the corresponding remuneration, at the employer's discretion.
Annual Leave
Employees are generally entitled to 22 days of paid annual leave, which can be taken until April 30 of the following year.
In the employee's first year of service, their annual leave entitlement shall accumulate at 2 days of annual leave per month worked up to 20 days. This can only be taken after completing at least 6 months of employment.
If the calendar year ends before the employee has completed the 6 months, the leave can be taken by June 30 of the following calendar year. In that year, however, no employee may take more than 30 days of annual leave unless otherwise allowed by collective agreement.
Sick Leave
An employee's absence is justified if it is motivated by their inability to work due to an illness or accident.
The employer is not obligated to continue wage payments for the period of absence if the employee benefits from a social security scheme for protection against illness.
Maternity Leave
A working mother may take up to 30 days of the initial parental leave before giving birth and 42 consecutive days of mandatory leave after giving birth. These leave periods form part of the initial parental leave, which can last up to a total of 120 or 150 days.
For other related leaves, refer to the following:
|
Topic |
Relevant Articles of the Labor Code |
|
Leave in a situation of clinical risk during pregnancy |
37 |
|
Leave for termination of pregnancy |
38–38-A |
|
Initial parental leave to be taken by one parent in the event of the other parent's inability to do so |
42 |
|
Leave for pre-natal consultations |
46 |
|
Leave for medically assisted procreation consultation |
47 |
Paternity Leave
A working father shall be entitled to 28 days of parental leave, which can be taken consecutively or in parts of at least 7 days, within the 42 days following their child's birth, provided that 7 consecutive days must be taken immediately after the child's birth.
After taking the aforementioned leave, the employee shall also be entitled to 7 working days of voluntary leave, taken consecutively or non-consecutively, and at the same time as the mother.
Parental Leave
There are 2 types of parental leave, namely the initial leave period and extended leave period.
|
Initial leave period |
Extended leave period |
|
Up to 150 days, and includes the mandatory and exclusive periods for both the father and the mother |
An additional 3 months of leave |
Initial parental leave lasts for up to 120 or 150 consecutive days and includes both maternity leave and paternity leave. In addition to this number of days, a further 30 days may be added if the mother and father opt to share the initial leave individually, i.e. not at the same time, or if the employee has twins.
Initial parental leave may be extended by up to 3 months for the father and for the mother, which must be taken immediately after the initial parental leave.
For other related leaves, refer to the following:
|
Topic |
Relevant Articles in the Labor Code |
|
Absence to care for a child |
49–53 |
|
Reduction of working time to care for a minor child with a disability or chronic illness |
54 |
|
Part-time work or Flexible working hours for a worker with family responsibilities |
55–57 |
Other Leave
|
Leave |
Paid/Unpaid |
Duration |
Note |
|
Bereavement Leave |
Paid |
2–20 days |
To be taken in the event of the death of the employee's spouse, child or stepchild (20 days), a relative or in-law in the 1st degree (5 days), or other relative or in-law in the direct line or in the 2nd degree of the collateral line (2 days). |
|
Carer's Leave |
Paid |
15 days per year |
For employees to provide unavoidable and essential assistance, in the event of illness or accident, to their spouse, a relative or in-law in the direct ascending line or in the 2nd degree of the collateral line. This leave can be extended by 15 days per year if the person cared for is the employee's spouse with disability or a chronic illness. |
|
Educational Leave |
Unpaid |
60 days |
For employees to attend training course provided by the relevant institution or within the scope of a specific program approved by the competent authority. Employers may refuse to grant this leave only in certain circumstances. |
|
Marriage Leave |
Paid |
15 days |
To be taken in the event of the employee's marriage. |
Aside from the above leaves, an employee's absence may be justified if they are taken for reasons stipulated in Article 249 of the Labor Code.
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