EOR Service in Portugal

Hire, Onboard and Pay Employees in Portugal Quickly and Efficiently

Hiring in Portugal at a glance

CURRENCY
Euro (EUR)
working hours
8 hours a day / 40 hours a week
public/bank holidays
13
capital
Lisbon
language
Portuguese
date format
DD/MM/YYYY
remote workers
1.2M
tax year
January 1st to December 31st
minimum hourly salary
No minimum wage
CURRENCY
Euro (EUR)
working hours
8 hours a day / 40 hours a week
public/bank holidays
13
capital
Lisbon
language
Portuguese
date format
DD/MM/YYYY
tax year
January 1st to December 31st
payroll frequency
Monthly
GDP
$267 billion

Employer of Record in Portugal

An employer of Record in Portugal  enables you to hire talent in Portugal when you do not have a local entity in the country. Partnering with an EOR helps you access talent in the European country quickly. As the EOR dons the role of a primary employer, it absorbs all compliance risks while you manage the day-to-day affairs of the employee confidently.  The EOR takes care of all Portugal compliance aspects of employment, including payroll, taxes, statutory benefits, employment contracts and more.

Why use Portugal EOR?

Opening an entity in Portugal  for the purposes of hiring local talent,  can take anywhere between 2 to 3 months. You’ll also need to deposit a paid up capital of 50,000 euros.  This sets you back by many days and thousands of dollars and you may end up losing out valuable talent to your competition. By partnering with an EOR, you are set to hire in Portugal in a few days.

Besides the hassles of opening an entity, hiring in Portugal can be complicated owing to its labor laws with specific constraints on minimum wages, maternity laws and so on. Moreover, Portugal’s employment landscape is also influenced by labor unions making staying compliant a daunting task. 

With a SaaS-based EOR such as Gloroots, you can compliantly onboard, pay and manage employees in Portugal from a single window. This helps you retain your talent and saves the time you spend dealing with multiple insurance vendors.

EOR Costs in Portugal

EORs usually offer two pricing options: a fixed monthly fee per employee or a percentage of the employee's payroll plus applicable taxes. In addition to these fees, there may be other charges for onboarding, administrative tasks, or additional features. It's important to note that companies don't need to use an EOR for their entire workforce and can opt to use it only for specific employees. This way, they will only be charged for the employees that they hire through the EOR.

Key Metrics For Foreign Employers 

Portugal ranks 26th globally in the Global Talent Competitiveness index. The country is touted to be a leading provider of technology skills in the Europe.


Here we have pulled out some key indicators from the Global Talent Competitiveness Report for employers considering hiring from Portugal.

Factors Global Ranking Interpretation
Rule of law 22 Indicates effectiveness of law enforcement
Labour-employer cooperation 50 Indicates positive labor-employee relationships
Reading Maths, and Science 25 Indicates average scores in OECD's survey of 15-year old students
University Ranking 39 Indicates average QS rankings
Labour productivity per employee 40 Indicates total output by the total labor input used to produce that output
Ease of finding skilled employees 25 Indicates findability of skilled talent
Workforce with tertiary education 39 Indicates % of workforce with PG degrees
Digital Skills 22 Indicates prevalence of advanced digital skills in the population

Source: The Global Talent Competitiveness Index 2022


Through the Gloroots’ Recrew platform, you can discover amazing talent in Portugal.

Why work in Portugal?

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Grow your team in Portugal

Growing a team means hiring the right employees at the right time and for the appropriate positions. Employers in Portugal must have a local legal organisation and use local resources to handle compliance, payroll, tax, and benefits management. The complexity of employment regulations in Portugal demands compliance with employment laws.

With Gloroots’s global Employer of Record (EoR) service, you can let Gloroots do the heavy lifting of payroll, tax, benefits, and compliance and concentrate on what matters to you most: your employees and company growth.

Risks of misclassification

In Portugal, the issue of "employee misclassification" arises when employers wrongly classify workers, often categorizing them as self-employed or independent contractors to evade providing employment rights and benefits typically granted to permanent employees. This misclassification occurs even when the workers perform duties similar to those of permanent employees.


By partnering with a Professional Employer Organization (PEO) or Employer of Record (EOR) in Portugal, you can ensure accurate worker classification and the preparation of proper employment agreements. These experienced professionals are well-versed in labor laws and can provide guidance to ensure compliance. They handle precise payroll processing and offer comprehensive benefits, enabling your business to focus on core operations while entrusting employment-related obligations to seasoned experts. With their support, you can avoid the risks associated with employee misclassification and ensure a fair and compliant workforce.


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Employing in Portugal

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Tax

Income tax

Income Range Income Tax Rate
Up to 7,479.00 EUR 14.50%
7,479.01 EUR to 11,284.00 EUR EUR 23.00%
11,284.01 EUR to 15,992.00 EUR EUR 26.50%
15,992.01 EUR to 20,700.00 EUR EUR 28.50%
20,700.01 EUR to 26,355.00 EUR 35.00%
26,355.01 EUR to 38,632.00 EUR 37.00%
38,632.01 EUR to 50,483.00 EUR 43.50%
50,483.01 EUR to 78,834.00 EUR 45.00%
78,834.01 EUR and above 48.00%

Other Taxes and Social Security contribution:

Employer Payroll Contributions

Contribution Type Rate (%)
Social Security 23.75%
Labor Accident Insurance 1.75%
WGF (wage guarantee fund) 1.00%
Total Employment Cost 26.50%

Employee Payroll Contributions

Contribution Type Rate (%)
Social Security 11.00%
Total Employee Cost 11.00%

Separation

Termination Process

In Portugal, the termination process follows a standard procedure that typically involves providing notice periods unless there are valid reasons for immediate dismissal, such as misconduct or disobedience. In cases where termination without notice is justified, it must be communicated in writing and submitted to the appropriate service under the Ministry of Labour, except in instances of disciplinary dismissal. This ensures that the termination process is properly documented and in compliance with the established regulations.

Notice Period

In Portugal, notice periods are typically determined by the terms outlined in the employment contract or collective agreement, taking into account the employee's length of service. The notice periods are as follows:

- 7 days' notice if the employee has been employed for less than 6 months or during the probationary period.

- 1 month's notice if the employee has been employed between 6 and 48 months.

- 2 months' notice if the employee has been employed for more than 2 years.

For fixed-term or temporary employment agreements, the notice periods are as follows:

- 15 days' notice for contracts with an agreed or expected duration of less than 6 months.

- 30 days' notice for contracts with an agreed or expected duration of 6 months or longer.

These notice periods ensure that both employers and employees have sufficient time to prepare for the termination of the employment relationship.

Probation period

In Portugal, the probation period for permanent employees is 90 days. However, for positions that involve high technical or complexity levels, the probation period is extended to 180 days. For management, directorate, and similar roles with significant responsibilities, the probation period is set at 240 days.

In the case of fixed-term contracts, the probation period is shorter. It is set at 15 days when the contract has an expected or fixed duration of less than 6 months. For contracts with a duration equal to or longer than 6 months, the probation period is extended to 30 days.

These probation periods allow employers to assess the suitability of employees for their roles and provide an opportunity for both parties to evaluate the working relationship before committing to a long-term employment arrangement.

Severance Pay


In Portugal, fair dismissals based on objective grounds, such as redundancy, or dismissals due to job unsuitability, entail severance payments ranging from 12 to 18 days' salary per year of service, up to a maximum of 12 months' base salary. These severance payments are partially funded (50 percent) by a social security-administered fund called FCT, to which employers are required to contribute. It is common to negotiate higher severance payments to avoid potential litigation.

Severance may also be required for dismissals that occur during the 91st to 180th day of the probation period.

In the case of terminations of fixed-term contracts, a compensation of 24 days of base salary per year of service is applicable.

These severance and compensation provisions serve to protect employees and provide financial support during periods of employment termination.

Start Hiring in Portugal today

When hiring globally, ensuring compliance comes with its own set of battles. Employers must ensure all hiring and onboarding activities adhere to employment laws, payroll procedures, DE&I compliance, GDPR and similar data protection, etc. If it is painstaking to set up infrastructure and kick starting your hiring, to monitor the everchanging compliance landscape is another uphill task. 

Gloroots helps you minimise all these efforts by providing a single window to manage all these tasks. Our in-house experts fully shield you from cross-border employment and payroll compliance risks. They do this by helping you with generating employment contracts, on-time payments, compliant benefits, while you focus only on screening talent. 

Our promise is a stress-free global employment experience for both you and your employee.

Contact our experts today to kickstart your global hiring campaign.

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