EOR in Portugal stands for Employer of Record. It is a service that allows businesses to hire employees in Portugal without needing to establish a local entity. The EOR takes care of all legal and administrative responsibilities, including payroll management, employee benefits, tax compliance, and adherence to Portuguese labor laws, ensuring smooth operations and full compliance.
Employer of Record (EOR) Solution in Portugal
Expand your team in Portugal without the hassle of setting up a local entity—hire, onboard, and pay employees with complete compliance through Globaine.
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Simple & Compliant Hiring with Globaine's Employer of Record (EOR)
Hire in Portugal with Confidence
Globaine takes care of all compliance matters, including payroll, taxes, and legal obligations, while providing seamless hiring processes. Our platform ensures that every aspect of employee management in Portugal is handled efficiently and in full compliance with local regulations.
Fast Time-To-Hire
Onboard employees in as little as 12 hours.
Cost-Efficient
The most affordable solution on the market, saving you time and money.
Compliant Contracts
We draft bilingual contracts compliant with Portuguese labor law.
Global Reach, Local Expertise
Hire not just in Portugal, but in over 180 countries through our global platform, allowing you to grow internationally without entity setup. Globaine’s team provides the local expertise you need to ensure every hire is compliant, efficient, and hassle-free.
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Hiring
in Portugal
While written contracts are not always legally required, it is strongly recommended to ensure clarity. Specific contracts, such as those for non-EU employees, fixed-term, and part-time agreements, must be in writing to comply with labor laws.
A written contract is essential for certain employment types, including non-EU hires, fixed-term positions, and part-time work. It must be prepared before the employee starts work to avoid legal issues.
Salaries must be stated in euros and should clearly reflect annual amounts. The salary is divided into 14 installments, which include the standard 12 monthly payments plus two additional payments as holiday and Christmas allowances.
Non-compete and teleworking clauses must be explicitly outlined in the contract. These clauses help define work conditions and any restrictions on future employment, particularly for employees in specialized roles or remote positions.
Choosing an Employer of Record (EOR) in Portugal allows businesses to expand quickly without the need for a local entity. GlobainePEO ensures full compliance with Portuguese labor laws, manages payroll, employee benefits, and takes care of tax obligations, reducing legal and administrative burdens. With an EOR, businesses can easily hire and manage employees in Portugal while staying compliant and focusing on growth.
Onboarding
in Portugal
1. What are the key steps in employee onboarding in Portugal?
Employees must obtain a tax identification number (NIF), a social security number, and open a Portuguese bank account. These steps ensure compliance with payroll and tax regulations before employment starts.
2. When should employees complete pre-hire medical checks?
A pre-hire medical check is mandatory before the employee begins working. This requirement ensures that the employee is fit for their role and is part of Portuguese labor law for certain roles and industries.
3. What documents are required for onboarding?
Employees must provide a valid NIF, a social security number, and their employment contract. These documents are critical to ensure legal employment and smooth processing of payroll and taxes.
4. Why businesses in Portugal need EOR services?
5. How does EOR in Portugal different from other countries?
Payroll
in Portugal
Salaries in Portugal are generally paid in 14 installments, with two extra payments (13th and 14th month salaries) typically issued in June and November. This structure ensures employees receive a holiday and Christmas allowance
Employers must provide home office allowances and ensure that remote employees’ expenses, like internet and electricity, are covered. These allowances must be specified in the employment contract and are subject to Portuguese tax regulations.
The 13th salary, also called the holiday allowance, is paid in June, and the 14th salary, the Christmas allowance, is paid in November. These payments are a legal requirement and part of the standard payroll structure in Portugal
The minimum wage in Portugal is €705 per month, which is paid over 14 installments. This wage structure ensures compliance with the national labor laws that aim to provide financial security to employees.
Payroll compliance ensures that employers meet legal obligations, such as income tax withholding and social security contributions. Non-compliance can result in heavy fines and damage the company’s reputation
Taxes
in Portugal
1. What are the income tax rates in Portugal?
Portugal uses a progressive income tax system, with rates ranging from 14.5% to 48%, depending on the individual’s earnings. The more an employee earns, the higher the tax bracket they fall into.
2. How does the tax system apply to non-residents?
Non-residents are taxed at a flat rate of 25% on their income earned in Portugal. This is different from residents, who are subject to a progressive tax scale based on their earnings.
3. When should tax returns be submitted?
Employees and employers must submit annual tax returns, typically by the end of April for the previous tax year. Employers are responsible for withholding income tax from employee salaries throughout the year.
4. What social security contributions are required?
Employers contribute 23.75% of an employee’s gross salary to social security, while employees contribute 11%. These contributions fund public healthcare, pensions, and unemployment benefits.
5. Why is tax withholding important?
Accurate tax withholding is vital to comply with Portuguese tax regulations and avoid penalties. Employers must ensure that correct amounts are deducted and reported to the tax authorities.
Leave
in Portugal
Employees are entitled to a minimum of 22 days of paid annual leave, starting from their first year of employment. This increases to 25 days in certain industries or through collective bargaining agreements.
Employees can use their leave after completing six months of employment. During the first year, they accrue two days of leave per month, with a cap of 20 days for the year.
Maternity leave is 72 days, with at least 30 days taken before childbirth. Paternity leave is 28 days, with 7 days mandatory immediately after childbirth, and the rest within 6 weeks.
Portugal has 13 mandatory public holidays, including national and religious holidays like Christmas, New Year’s Day, and Easter. Employers are required to grant these holidays unless the employee is covered by specific collective agreements.
Proper leave management ensures compliance with labor laws and maintains employee morale. It also helps avoid legal complications that may arise from denying or mishandling employee leave.
Benefits
in Portugal
- What benefits are mandatory in Portugal
Employers must provide a 13th and 14th salary, and remote employees must receive a minimum of €28 per month for home office allowances. These benefits are in addition to the standard salary and are legally required.
2. How is the home office allowance structured?
The home office allowance compensates employees for work-related expenses, such as internet and electricity. The minimum allowance is €28, and it must be stipulated in the employment contract to be tax-exempt.
3. When should meal allowances be provided?
Employers typically offer a meal allowance of up to €6 per working day, which is tax-free. This is a common benefit in Portugal and helps support employee living costs.
4. What additional benefits are common in Portugal?
Many companies offer private health insurance, transport allowances, and housing support. These benefits, although not legally required, are competitive offerings to attract and retain talent.
Terminations
in Portugal
The notice period varies depending on the employee’s seniority and contract type, ranging from 15 days for employees with less than a year of service to 75 days for those with over 10 years of service.
During the probationary period, employers can terminate employees without notice. For indefinite-term employees, specific legal reasons, such as misconduct or poor performance, are required for termination.
Severance payments are calculated based on 14 days of base salary per year of service. The payment includes any untaken leave days and prorated 13th and 14th salaries for the year.
Mutual termination allows both the employer and employee to agree on the end of the employment relationship without the need for formal legal procedures. This option avoids potential disputes and is typically more amicable.
FAQs
By using Globaine’s EOR solution in Portugal, your company saves on setup costs, HR expenses, and compliance risks. There’s no need to establish a local entity, and payroll, benefits, and taxes are managed by Globaine. This allows for a quicker, more cost-effective market entry.
Globaine ensures rapid onboarding through its streamlined processes, digital tools, and a dedicated team in Portugal. Our local specialists handle the paperwork and coordination efficiently, ensuring compliance while delivering within the promised 12-hour window.
Yes, Globaine can handle complex employment scenarios in Portugal, including drafting bilingual contracts and managing employee terminations. Our EOR solution ensures compliance with Portuguese labor laws, while also accommodating the need for bilingual contracts and smoothly managing the termination process, minimizing legal risks
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