Currency
Euro (EUR)
EOR IN Portugal
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A guide to employing and growing your team in Portugal
Fast and compliant market entry. Hire top local talent without the need for a legal entity
Portugal’s labor market is governed by a robust Labour Code that emphasizes social protection and collective bargaining. Employment is characterized by the mandatory 13th and 14th-month salary bonuses, typically paid as a “Holiday Allowance” (usually in June) and a “Christmas Allowance” (usually in December). As of January 1, 2026, the statutory national minimum wage in mainland Portugal is EURO920.00 per month. When calculated over 12 months for budgeting purposes, this equates to an effective monthly base of EURO1,073.33.
Employer Contributions
Social Security (TSU): 23.75%
Work Accident Insurance: Variable (~1% – 2% based on industry risk)
Wage Guarantee Fund: 0.1%
Total Employer Contribution: ~24.75% – 25.75%
Employee Payroll Taxes
Social Security: 11% (Deducted from gross salary)
IRS Withholding: Variable (Based on income and family situation)
Total Employee Contribution: 11% (plus applicable progressive IRS tax)
Employee Income Tax Rates
Portugal uses a progressive tax system with thresholds adjusted for inflation in 2026. The mínimo de existência (subsistence level) ensures that those earning up to EURO12,880 per year are exempt from IRS.
Up to EURO8,342: 12.5%
EURO8,342 – EURO12,587: 15.7%
EURO12,587 – EURO17,838: 21.2%
EURO17,838 – EURO23,089: 24.1%
EURO23,089 – EURO29,397: 31.1%
EURO29,397 – EURO43,090: 34.9%
EURO43,090 – EURO46,566: 43.1%
EURO46,566 – EURO86,634: 44.6%
Above EURO86,634: 48%
Statutory Leave
Employees are entitled to a minimum of 22 working days of paid annual leave. In the first year of employment, workers accrue 2 days per month up to a maximum of 20 days. Portugal also observes 13 mandatory public holidays. Unused leave cannot generally be replaced by extra pay unless the contract is terminated.
Pregnancy and Maternity Leave
The “Initial Parental Leave” lasts between 120 and 150 consecutive days. Mothers must take at least 6 weeks (42 days) immediately following childbirth. If the leave is 120 days, it is paid at 100% of the reference salary; if 150 days, it is paid at 80%. This is funded by Social Security, not the employer.
Paternity Leave
Fathers have a mandatory 28-day paternity leave period following the birth of a child. The first 7 days must be taken consecutively immediately after birth, and the remaining 21 days must be taken within the first 6 weeks of the child’s life.
Work-Related Injury Leave
Sick Leave: Social Security pays a percentage of the salary (55% to 75% depending on duration) starting from the 4th day of illness. The first 3 days are typically unpaid.
Marriage Leave: 15 consecutive days.
Bereavement: 5 days for a spouse, parent, or child; 2 days for other close relatives.
Termination Process
Unilateral dismissal without “just cause” is prohibited. Valid grounds include Disciplinary Dismissal (misconduct), Collective Dismissal, or Elimination of the Job Position (redundancy). Since May 2023, severance pay for objective redundancies is 14 days of basic salary for each year of service.
Notice Period
During Probation: No notice is required if service is 120 days.
After Probation (By Employer): 15 days (tenure 10 years).
By the Employee (Resignation): 30 days (tenure 2 years).
Probation Period
Permanent Contracts: 90 days (standard), 180 days (complex/technical roles), or 240 days (management/executive roles).
Fixed-term Contracts: 30 days (contracts >6 months) or 15 days (contracts <6 months).