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Quick Hiring Snapshot
Capital: Lisbon
Currency: Euro (EUR)
Primary language: Portuguese
Statutory workweek: 40 hours per week (typically 8 hours per day)
Minimum wage: Statutory national minimum wage set by the government
Salary structure: Salaries are paid in 14 installments per year (13th and 14th month payments are statutory)
Public holidays: National public holidays plus one municipal holiday
Key employment framework: Portuguese Labour Code (Código do Trabalho)
Hiring without a local entity: Available through Justworks EOR
Overview
Portugal has a structured and employee-protective labor framework governed by the Portuguese Labour Code. Employment relationships are formal, with clear statutory rules governing contracts, working time, probation, dismissal, and employee benefits.
Portugal has become an increasingly attractive location for international companies expanding into Southern Europe due to its skilled workforce, strong English proficiency, and competitive labor costs compared to other Western European markets.
When hiring through Justworks EOR, Justworks serves as the legal employer in Portugal. We manage compliant employment contracts, payroll processing in euros, statutory registrations, and required social contributions. Your team member works day to day with your organization, while employment compliance is handled within Portuguese legal requirements.
This guide provides a high-level overview of what to expect when hiring in Portugal.
Note: This article is for informational purposes only and does not constitute legal or tax advice.
What Employers Should Plan for When Hiring in Portugal
Before hiring your first employee in Portugal, it’s important to understand how statutory protections and pay structure shape the employment relationship.
Employment Contracts
Employment contracts must clearly define:
- Role and professional category
- Compensation
- Working hours
- Probation (if applicable)
- Duration (where relevant)
Written contracts are required in certain situations (such as fixed-term or remote work arrangements) and are strongly recommended in all cases.
Indefinite-term contracts are the local standard and provide the highest level of employee protection.
Probation Periods
For open-ended contracts, probation periods are regulated by law and vary depending on role and employee status:
- 90 days for most employees
- 180 days for complex roles, positions of trust, first-time job seekers, or long-term unemployed individuals
- 240 days for management and senior technical positions
Termination during probation is generally permitted without severance, provided statutory requirements are met.
Working Time and Overtime
Portugal’s statutory maximum working time is 40 hours per week, typically structured as 8 hours per day.
Employers must also respect:
- A minimum of 11 consecutive hours of daily rest
- At least one full day of weekly rest
Overtime is regulated and subject to statutory and applicable collective agreement limits. Compensation may involve premium pay or compensatory time off, depending on the circumstances.
Working time flexibility is possible but must comply with legal caps and employer obligations.
Termination and Separation
Portugal does not operate under an at-will employment model. Terminations are limited to causes set out in law (such as disciplinary grounds, redundancy, or role elimination), or may occur by mutual agreement between employer and employee.
Dismissal procedures are formal and must follow legally defined processes. Statutory severance may apply depending on the type of termination and employee tenure.
Because dismissal protections are structured and employee-protective, employers should factor separation costs and timelines into workforce planning decisions.
Compensation Expectations
Employees in Portugal are paid in euros (EUR).
Portugal has a statutory national minimum wage set by the government. Employers must ensure compensation meets or exceeds the applicable minimum.
A distinctive feature of Portuguese compensation is the 14-payment structure, which includes:
- 12 regular monthly payments
- A 13th month payment (Christmas subsidy)
- A 14th month payment (holiday subsidy)
These additional payments are standard under Portuguese labor law. Some employers may prorate them across 12 months, depending on agreement.
Employers must also budget for employer social security contributions, which fund public healthcare, pensions, unemployment benefits, and other statutory protections.
When hiring through Justworks EOR, payroll and statutory contributions are administered in accordance with Portuguese law.
Common Industries and Market Compensation
Portugal has positioned itself as a competitive hub for international companies expanding into Southern Europe. Strong English proficiency, EU market access, and comparatively moderate labor costs make it attractive for EOR-supported hiring.
Compensation varies by region, with Lisbon typically commanding the highest salaries, followed by Porto, while other regions may offer more cost-efficient hiring options.
Below are three sectors where international companies commonly hire in Portugal through EOR models.
Technology & Nearshore Development
Portugal has developed into a strong nearshore technology hub serving EU, UK, and U.S. markets. Lisbon and Porto host growing startup ecosystems and international tech operations.
Common roles include software engineering, DevOps, product support, and data analytics.
- Mid-level Software Developer: approximately €25,000 – €40,000 per year
- Senior Software Engineer: approximately €40,000 – €65,000+ per year
- Engineering Manager / Tech Lead: approximately €60,000 – €90,000+ per year
Portugal is often used by international companies to scale development teams while maintaining EU regulatory alignment.
Shared Services & Multilingual Operations
Portugal is a well-established shared services and customer operations center location. Its multilingual workforce makes it particularly attractive for pan-European support models.
Common EOR-supported roles include customer support, finance operations, HR services, and back-office functions.
- Customer Support Representative: approximately €18,000 – €28,000 per year
- Finance or HR Shared Services Specialist: approximately €25,000 – €40,000 per year
- Operations Manager: approximately €40,000 – €65,000 per year
These roles are frequently hired through EOR arrangements when companies want to centralize EU-facing operations without opening a local entity.
Renewable Energy & Infrastructure
Portugal has invested heavily in renewable energy and sustainability initiatives, making it an attractive location for green energy and infrastructure projects.
Roles in engineering, project management, and ESG advisory are common in international expansion models.
- Renewable Energy Project Engineer: approximately €30,000 – €50,000 per year
- Sustainability / ESG Specialist: approximately €35,000 – €60,000 per year
- Infrastructure Project Manager: approximately €50,000 – €80,000 per year
This sector offers long-term growth potential as EU sustainability regulations continue to expand.
Compensation Disclaimer: The salary ranges and roles provided above are for general informational purposes only and reflect broad market benchmarks at a point in time. Actual compensation may vary based on factors such as location, experience level, industry demand, company size, and economic conditions. Employers should conduct their own market research and benchmarking analysis before making a formal employment offer to ensure compensation is competitive and aligned with local market standards.
Statutory Programs and Social Security
Employees in Portugal participate in the public social security system.
Employer and employee contributions fund:
- Public healthcare
- State pensions
- Unemployment insurance
- Parental and sickness benefits
Employers are responsible for registering employees with Portuguese Social Security and administering payroll contributions accordingly.
When hiring through Justworks EOR, required registrations and statutory contributions are handled in compliance with Portuguese legal requirements.
Country-Specific Leave
Annual Leave
Employees are generally entitled to 22 working days of paid annual leave per year, accrued based on tenure.
Public Holidays
Portugal observes national public holidays as well as one municipal holiday specific to the employee’s place of work. Public holidays are separate from annual leave entitlements.
Sick Leave
Employees who are unable to work due to illness may receive sickness benefits through the Social Security system, generally payable after the first three days of absence, subject to statutory rules and eligibility requirements.
Maternity, Paternity, and Parental Leave
Portugal provides structured family leave protections:
- Initial parental leave: Generally 120 to 150 days, depending on the option selected, with benefits administered through Social Security.
- Paternity leave: Generally 28 days, with structured timing requirements (including mandatory initial days following birth).
- Additional parental leave options may be available under statutory rules.
Hiring in Portugal Through an Employer of Record
If your company does not have a Portuguese legal entity, direct hiring would require incorporation, tax registration, social security enrollment, and compliance with Portuguese labor law.
Through Justworks EOR, Justworks serves as the legal employer in Portugal. We manage compliant employment contracts, payroll processing, statutory social contributions, and required reporting. Your employee works with your organization while employment compliance is handled within Portuguese regulatory requirements.
This structure allows companies to expand into Portugal while navigating its structured and employee-protective labor system in a compliant way.
Official Resources for Employers in Portugal
- Portuguese Ministry of Labour, Solidarity and Social Security
- Portuguese Social Security (Segurança Social)
- Authority for Working Conditions (ACT)
- Portuguese Tax Authority (Autoridade Tributária e Aduaneira)
FAQ
Can I hire in Portugal without establishing a local entity?
Yes. Through Justworks EOR, you can hire employees in Portugal without setting up your own Portuguese legal entity.
Are the 13th and 14th month payments mandatory?
Yes. Portuguese law provides for both a Christmas subsidy (13th month) and a holiday subsidy (14th month).
How much annual leave is required?
Employees are generally entitled to 22 working days of paid annual leave per year.
Is Portugal an at-will employment country?
No. Termination must be based on legally defined grounds or mutual agreement.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.