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:
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.
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.
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
.
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 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.
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.
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.
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.
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.
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.
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
PTO is calculated by the:
Portugal has 13 mandatory public holidays.
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:
The maternity leave is paid by social security:
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.
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%.
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.
Employees are entitled to 15 consecutive days of paid leave after getting married.
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.
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.
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.
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.
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:
III. are seeking their first job and are long-term unemployed.
For a fixed-term employment contract, the trial period can last as follows:
b) 15 days for a fixed-term contract lasting less than six months.
A full-time work week is 8 hours per day and 40 hours per week.
Industry-specific legislation can require reduced working hours.
Overtime should not exceed:
Calculation for overtime pay:
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