How to hire remote employees in

Portugal

Thanks to a favorable approach to remote work, Portugal’s become a hotspot for top talent across the globe. If you’ve found someone you’d like to hire remotely in Portugal, you’re in the right place. In the next few minutes, we’ll teach you how to hire in Portugal (without getting yourself wrapped up in thousands of dollars of legal red tape).

Country snapshot

CURRENCY
Euro (EUR)
EMPLOYER TAXES
26.50%
PAYROLL FREQUENCY
Monthly
OFFICIAL LANGUAGE
Portuguese

What to know before you hire in 

Portugal

No matter where you’re based out of, we can tell you one thing: Portugal has different labor laws than your home country (unless your home country is Portugal, that is). If you don’t do things right, you’ll be putting your company at the risk of fines—and risk losing the talent you brought onboard. Fortunately, doing things right is pretty easy if you take the right route.

If you want to successfully hire in 

Portugal

, you have two options:

Hire talent as contractors

Laws about hiring contractors are significantly more simple in 

Portugal

. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Panther for.

Hire talent as employees

This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in 

Portugal

 is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.

Why hire independent contractors in 

Portugal

Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in 

Portugal

.

It’s the fastest way to hire globally

Hiring employees takes months, at the minimum. When you hire with Panther’s locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.

It’s a lot cheaper

It costs just $0 to sign up for Panther, then $49 per month to hire your contractors with Panther. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.

It’s more flexible for you & your team

Hiring contractors in 

Portugal

 means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.

It’s less risky than hiring employees

Hiring employees is a bigger commitment, and generally puts you at a bigger risk for legal fees. When you hire contractors overseas, your biggest risk is misclassification—but even then, misclassification penalties are often minimal and just require you to pay off any compensation that the person would have been owed as an employee.

Some people want to be employees

The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.

You might not have as much control over your talent

Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.

How can I pay people in 

Portugal

?

If you’re hiring contractors in 

Portugal

, you can pay them with Panther in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.

Hiring and paying your team in 

Portugal

Hire and pay with Panther

Pay everyone with a single click
Get great currency conversion rates
Pay $0 in platform fees
Run payroll in seconds
Let Panther automatically create & store invoices
Let Panther automatically write locally-compliant contracts
Let Panther automatically file local tax documents

Hire and pay without Panther

Pay all your contractors individually
Do all currency conversions yourself
Shoulder the burden of platform fees
Spend hours each month making payments
Manually track & store invoices
Manually write & sign contracts
Manually file relevant tax documents

Let Panther save you from hiring headaches.

Sign up today for $0

If you want to hire employees in 

Portugal

If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Portugal than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Portugal

Taxes in 

Portugal

Employer tax

Social Security

Labor Accident Insurance

WGF (wage guarantee fund)

Individual tax

Leave

Paid Time Off (PTO)

PTO is calculated by the:

  • After 6 months of employment, the employee shall be entitled to 2 business days off per month of work performed.
  • In the first year of employment, the employee shall not take more than 20 business days off.
  • In the following year, the employee shall not take more than 30 business days off. In the following years, from January 1st of every year, the employee shall be entitled to 22 business days off + the proportional of the outgoing year.

Public Holidays

Portugal has 13 mandatory public holidays.

Sick Days

The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:

     The minimum requirement is 4 days leave and is paid by Social Security as follows:

  • 55% – for first 30 days
  • 60% – between 31 and 90 days
  • 70% – between 91 and 365 days  
  • 75% – up to 366 days 

Maternity Leave

The maternity leave is paid by social security:

  • 120 days (just mother) – pay 100%
  • 150 days shared leave (120 for mother +30 for father) – pay 100%
  • 180 days shared leave (150 for mother +30 for father) – pay 83%
  • 150 days – pay 80%

Paternity Leave

The paternity leave is 20 days mandatory with an additional 5 optional days.

Leave is paid by social security at 100% of the employees average salary in the last 6 months.

Parental Leave

After the required 6 weeks of maternity leave and 15 days of paternity leave the couple can decide who takes the next 78 or 108 days.

If the couple takes a total of 150 days the leave is 80% paid, and if they choose 120 days, they will receive 100%.

Other Leave

Family Care Leave: Employees are entitled to 30 days of paid leave per year to provide urgent and essential care for a family member younger than 12 years of age and 15 days for an older family member.

Study Leave: on the day of a test and the day before.

Marriage Leave

Employees are entitled to 15 consecutive days of paid leave after getting married.

Bereavement Leave

Employees are entitled to five consecutive days of paid leave following the death of a spouse, parent, stepparent, child, or domestic partner. They are entitled to two days of paid leave following the death of a sibling, grandparent, or grandchild.

Termination

Termination Process

The grounds for termination include collective dismissal, dismissal due to abolition of the position, unsuitability for the job, disciplinary dismissals.

The process changes according to the reason for dismissal but either way, the reason for the dismissal should be notified to the employee prior to dismissal. In case of dismissal due to discipline issues, a hearing should be conducted and allow the employee to respond.

Dismissal notice should be in writing. Notification of the dismissal should be sent to relevant service under the Ministry of Labour (except in discipline dismissal) and to the workers’ representative.

Accrued and untaken vacations are also due to the worker, regardless of the cause and form of termination.

Notice Period

A fixed-term employment contract expires at the end of the stipulated term, or the end of its renewal provided that the employer or the employee notifies the other party in writing of its desire to terminate either 15 or 8 days before the deadline expires, respectively.

An unfixed-term employment contract expires when the employer foresees an end to the term and notifies the worker of said expiration, at least 7, 30, or 60 days in advance, depending on whether the contract has lasted up to six months, from six months to two years, or for a longer period of time.

Severance Pay

In the event of expiration of a fixed-term contract due to declaration by the employer, the employee is entitled to compensation corresponding to 18 days of base salary and seniority for each full year of work.

Probation Period

Every contract has an experimental period.

Depending on the type of contract the number of days varies, up to 8 months.

For an indefinite employment contract, the trial period can last as follows:

  1. a)   90 days for most employees.
  2. b)  180 days for employees who:
  3. hold positions of technical complexity, a high level of responsibility, or which requires a special qualification.
  4. in trust positions.

III. are seeking their first job and are long-term unemployed.

  1. c)   240 days for workers engaged in senior management positions.

For a fixed-term employment contract, the trial period can last as follows:

  1. a)   30 days for a contract lasting six months or more.

          b)   15 days for a fixed-term contract lasting less than six months.

Employee requirements in 

Portugal

Working Hours

A full-time work week is 8 hours per day and 40 hours per week.

Industry-specific legislation can require reduced working hours.


Overtime

Overtime should not exceed:

  • 2 extra daily working hours with a maximum of 48 weekly hours
  • 150 hours per year for employees at companies with at least 50 employees
  • 175 hours per year employees at companies with at less 50 employees
  • Up to 200 annual overtime hours can be performed if within collective labor agreement or force majeure.

Calculation for overtime pay:

  • 1st hour is hourly rate plus 25% and hourly rate plus 37.5% for the following hours.
  • Overtime on rest day or holiday is normal working hour plus 50%.

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