Portugal has a population of more than 10 million people, with leading industries in the textile, paper, and chemical sectors.

Companies must register with the National Companies Registry Office in order to have the company name approved. Companies must also obtain a tax number from the Registro Nacional de Pessoas Colectivas, with the a fiscal identification number and Articles of Association must be provided to authorities in order to start the business.

Payroll and Tax Considerations

  • Employers must collect information from new employees including; employment contracts, tax declarations, IBAN (banking ID) and personal ID document copies before hiring
  • Minimum wage is EUR 665 per month
  • Overtime pay is paid as 125% of the standard wage for the first hour and 137.5% for every consecutive hour
  • Severance pay is 20 days of compensation per year of service (cannot exceed 1 year of wages)
  • When an employee is terminated, a Declaração de Situação de Desemprego form must be submitted to the social security authorities with the reason for termination indicated
  • There is a progressive tax scale for personal income tax with rates from 14.5-48% depending on annual taxable income. Highest tax rate of 48% applies to individuals making more than EUR 80,882

HR and Statutory Requirements

  • Employers must advertise an open position with the Employment Centre for 30 days and if a Portuguese or EU citizen is not hired the employer can seek permission to hire a foreign national
  • Employees have the right to 22 days up to 15 of which may be taken consecutively. An employee is eligible to take leave after 6 months of working with the same employer
  • Payments from sick leave come from the social security system, paid into by employees and employers
  • Female employees receive 120 days of paid maternity leave. Maternity leave is funded by the social security system
  • Expectant mothers can take up to 30 days of leave before giving birth, and six weeks mandatory after childbirth
  • Fathers are required to take parental leave of 20 working days within 6 weeks of the birth of the child, 5 must be taken immediately after birth
  • All employees are covered by a national social security system that provides funds upon retirement at the age of 66 years and 6 months. Employees must have paid contributions for 15 years to qualify

Holidays in Portugal

  • January 1 – New Year’s Day
  • April 15 – Good Friday
  • April 17 – Easter Sunday
  • April 25 – Liberty Day
  • May 1 – Labor Day / May Day
  • June 10 – Portugal Day
  • June 16 – Corpus Christi
  • August 15 – Assumption of Mary
  • October 5 – Republic Implantation
  • November 1 – All Saints’ Day
  • December 1 – Restoration of Independence
  • December 8 – Feast of the Immaculate Conception
  • December 25 – Christmas Day

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