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).

Book demo

Employment requirements

Country snapshot

CURRENCY

Euro (EUR)

EMPLOYER TAXES

26.50%

PAYROLL FREQUENCY

Monthly

OFFICIAL LANGUAGE

Portuguese

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 Thera'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 Thera, then $25 per month to hire your contractors with Thera. 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

HHiring 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.

Can be less risky than hiring employees

Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.

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.

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 Thera 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.

Hire contractors in a couple clicks with Thera

How can I pay people in Portugal

If you’re hiring contractors in Portugal, you can pay them with Thera 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 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)

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:

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

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

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

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

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%.

Run your global workforce on autopilot with Thera

Book a demo to get started.

Get started