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Global Expansion Guide

Portugal

Manage and pay your employees easily with BIPO in Portugal and 170+ other markets. Build your international teams today with our global Employer of Record service!

employment guide_currency

Currency

Euro (EUR)

employment guide_language

Language

Portuguese

employment guide_capital

Capital

Lisbon

Employer of Record Portugal

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Leave

Termination and Compensation

BIPO as your Employer of Record

Benefits of BIPO EOR Service in the Portugal

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Employer of Record Portugal

Embark on your business expansion in Portugal with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the Portuguese market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

This guide was last updated on 16 March 2026. The content in this guide is current as of this date and based on common business practices.

Employment Contract

  • A preliminary employment contract must be concluded in writing and include the following:

    1. Identification details, signatures, and addresses of both parties;
    2. A clear and unambiguous statement of the parties’ intention to enter into a formal employment contract;
    3. A description of the role and the corresponding remuneration.
  • For a formal (standard) employment contract, the employer’s intention to contract may be expressed through the company’s internal rules and regulations, while the employee’s intention may be demonstrated through explicit or implied acceptance of such rules.

  • The employer must provide the employee with written information on the essential terms of employment, including:

    1. Identity of the employer: including company name and, where applicable, details of group relationships (e.g. parent company, cross-shareholding, or affiliated entities), as well as the registered address or headquarters;
    2. Workplace: if there is no fixed or primary workplace, this should be clearly stated;
    3. Employee category or a brief description of duties;
    4. Date of conclusion and effective date of the contract;
    5. Contract term, if applicable;
    6. Annual leave entitlement or the criteria for determining it;
    7. Notice period for termination, or the applicable determination criteria;
    8. Remuneration, including amount and payment frequency;
    9. Working hours, both daily and weekly; where an averaging arrangement applies,
    10. Work injury insurance, including policy number and insurer details;
    11. Applicable collective labour agreement, if any;
    12. Labour compensation fund, including relevant identification details.
  • Note: Items (6) to (9) may be satisfied by reference to applicable laws, collective labour agreements, or the employer’s internal rules and regulations. Employers must notify employees in writing of any changes to the above information within 30 days.

Statutory Contributions

Scope of Application: Applicable to employees of private enterprises.

Type of Social InsuranceContribution BaseEmployee ContributionEmployer Contribution
Social InsurancePre-tax salary or agreed base11%23.75%

Minimum Wage

Effective 1 January 2026, the minimum wage in Portugal has been increased to EUR 920 per month.

Public Holidays

The public holidays listed below are national public holidays observed across Portugal. Individual states and territories may observe additional public holidays. Please refer to official government announcements for the latest updates.

  • New Year’s Day
  • Good Friday
  • Easter Sunday
  • Liberty Day
  • Labour Day
  • Corpus Christi
  • Camões Day (Portugal Day)
  • Assumption of Our Lady
  • Republic Day
  • All Saints’ Day
  • Restoration of
  • Independence Day
  • Immaculate Conception Day
  • Christmas Day

Notes:

  • Good Friday may be substituted with other locally recognised commemorative days during the Easter period, where applicable.
  • In accordance with specific legislation, certain mandatory public holidays may be transferred to the following Monday.

  • Overtime Compensation:

    • Overtime work is compensated with an additional hourly wage.
    • Work performed on statutory public holidays is compensated at an additional 50% of the normal hourly rate.

Working Hours

Normal Working Hours

  • Daily: 8 hours.
  • Weekly: 40 hours.

  • Maximum working hours:

    • Where an employee works on a rest day observed by most employees in the company, daily working hours may be extended by up to 4 hours.
    • Where an employee continues working beyond normal hours to complete pending tasks, a grace period of up to 15 minutes is permitted. If the accumulated additional time exceeds 4 hours or is carried over within the year, it must be calculated and compensated separately.

  • Collective agreement:

    • Working hours may be organised under an averaging arrangement, allowing daily working hours to be extended by up to 4 hours.
    • Weekly working hours may reach up to 60 hours, provided that the average does not exceed 50 hours per week over a two-month period.

  • Individual agreement:

    • Working hours may be organised under an averaging arrangement, allowing daily working hours to be extended by up to 2 hours.
    • Weekly working hours may reach up to 50 hours.
    • Where weekly working hours fall below 40 hours, daily working hours may be reduced by up to 2 hours (or by half-day/full-day arrangements), without affecting the employee’s entitlement to meal allowances or food subsidies.

Work Breaks

  • Employees must be granted a rest break of 1 to 2 hours, ensuring that they do not work continuously for more than 5 hours.
  • Where daily working hours exceed 10 hours, continuous work must not exceed 6 hours.

Daily Rest

  • Employees are entitled to a minimum of 11 consecutive hours of rest between working days.

Weekly Rest

  • Employees are entitled to at least 1 day of rest per week, typically observed on Sunday.

Overtime Restrictions

  • Micro and small enterprises: Up to 175 hours per year, extendable to 200 hours under a collective agreement.
  • Medium and large enterprises: Up to 150 hours per year, extendable to 200 hours under a collective agreement.

  • Part-time employees:

    • Up to 80 hours per year, or a proportional amount based on working hours (whichever is higher);
    • May be increased to 130 hours by written agreement, or 200 hours under a collective agreement.
  • Daily limit (normal working days): Up to 2 hours of overtime per day.
  • Weekly rest days, compensatory rest days, or public holidays: Overtime must not exceed the employee’s normal daily working hours.
  • Half-day rest days: Overtime must not exceed the normal daily working hours.

Overtime Compensation

  • Compensatory Rest:

    • If overtime reduces the statutory daily rest period, employees are entitled to paid compensatory leave equivalent to the lost rest hours, to be taken within 3 working days.
    • If overtime is performed on a mandatory weekly rest day, employees are entitled to 1 day of paid compensatory leave, also to be taken within 3 working days.
    • Compensatory leave should be agreed between both parties; failing agreement, the employer may determine the arrangement.

  • Overtime Pay:

    • Up to 1 hour: +25% of the normal hourly wage.
    • Beyond 1 hour: +37.5% of the normal hourly wage.
    • Weekly rest days: +50% of the normal hourly wage.

Exemptions from Overtime Compensation

Subject to written agreement:

  • Employees in managerial or leadership roles, or those performing fiduciary, supervisory, or supporting functions;
  • Employees carrying out preparatory or ancillary work that must be performed outside normal working hours due to its nature;
  • Employees engaged in telework or roles performed outside the employer’s premises without direct supervision;
  • Other cases as provided under a collective agreement.

Leave

Annual Leave

  • Employer Type: Single employer.

  • Eligibility & Duration:

    • First year of employment: 2 days per full month of service, up to a maximum of 20 days. Leave may only be taken after 6 months of employment.
    • Subsequent years: Minimum of 22 days per year. Employees may waive any entitlement exceeding 20 days without a reduction in their leave allowance.
  • Allowance: Paid at full wage.
  • Cash-out: Any unused annual leave must be compensated in full upon termination of employment.

Sick Leave

  • Eligibility: Must be insured for at least 6 months and provide a valid medical certificate.
  • Maximum Duration: Up to 1,095 days.

  • Allowance:

    • Waiting period: First 3 days unpaid.

    • From day 4 onwards, paid by the social insurance fund:

      • Up to 30 days: 55% of salary
      • 31 – 90 days: 60%
      • 91 – 365 days: 70%
      • 366 – 1,095 days: 75%

Parental Leave (Including Maternity Leave)

  • Eligibility: Must be insured for at least 6 months and provide a medical certificate.

  • Duration:

    • Initial parental leave (for newborn care):

      • 120 or 150 days (at the parents’ choice).
      • +30 days per additional child in the case of multiple births.
      • If both parents work in the same micro-enterprise (≤9 employees), simultaneous leave requires employer approval.

    • Mother-only leave (Maternity Leave):

      • Up to 30 days before childbirth (optional).
      • 42 days (6 weeks) after childbirth (mandatory).
      • Included within the total parental leave period.

    • Father-only leave (Paternity Leave):

      • 28 days total:

        • First 7 days must be taken immediately after birth.
        • Remaining days must be taken within 6 weeks.
      • Additional 7 days may be taken concurrently with the mother.

    • Shared parental leave:

      • After the mother’s mandatory 6-week postnatal leave.
      • Each parent: 30 consecutive days or two periods of 15 consecutive days.
      • An additional 30 days may be added to the total parental leave entitlement.
  • Allowance: Paid by the social insurance fund, typically ranging from 80% to 100% of salary depending on the leave duration.

Other Leave Types

  • Marriage Leave: 15 consecutive days; paid leave.

  • Bereavement Leave:

    • 5 consecutive days: death of spouse or first-degree relative.
    • 2 consecutive days: death of other close relatives.
    • This leave is paid.

  • Examination Leave:

    • For working students attending examinations.
    • Includes the examination day and the preceding day.
    • Up to 4 days per subject per academic year, capped at 10 days per year.
    • This leave is paid.

  • Family Care Leave:

    • Generally unpaid; may require supporting documentation.

    • Spouse/relative care:

      • Up to 15 days per year.
      • Additional 15 days if the dependent has a disability or chronic illness.

    • Childcare:

      • Up to 30 days per year (or entire hospitalisation period) for children under 12.
      • Up to 15 days per year for children aged 12 and above.
      • +1 additional day per child.
      • Cannot be taken simultaneously by both parents.

    • Grandchild care:

      • Up to 30 consecutive days where grandchildren live with the employee and the parents are under 16.
      • If multiple eligible carers exist, arrangements must be agreed between them.

  • Other Leave Provisions:

    • Absence due to circumstances beyond the employee’s control (e.g. illness, accident, medical treatments, or legal obligations): Paid.
    • Time off to accompany a minor to an educational institution: Up to 4 hours per quarter; paid.
    • Leave for employee representatives to perform official duties: Unpaid.
    • Employer-approved leave: Unpaid.
    • Other justified absences under law: Paid up to 30 days per year; any excess is unpaid.
    • Leave for candidates for public office: In accordance with electoral laws.

  • Notice Requirements:

    • For foreseeable absences, employees must notify the employer at least 5 days in advance.
    • For unforeseeable absences, notification must be given as soon as possible.
    • Candidates for public office must provide at least 48 hours’ notice during the official campaign period.

Termination and Compensation

Expiry of a Fixed-Term Contract

  • Notice Period: 15 days for the employer; 8 days for the employee.
  • Compensation: 18 days’ wages per year of service, based on seniority.

Termination of an Open-Ended Contract

  • Notice Period (by contract duration):

    • Less than 6 months: 7 days.
    • 6 months to 2 years: 30 days.
    • More than 2 years: 60 days.

  • Compensation (by seniority):

    • First 3 years: 18 days’ wages per year of service.
    • Subsequent years: 12 days’ wages per year of service.

Collective Dismissal / Layoff

  • Notice Period (by seniority):

    • Less than 1 year: 15 days.
    • 1–5 years: 30 days.
    • 5–10 years: 60 days.
    • More than 10 years: 75 days.
  • Compensation (by seniority): 12 days’ wages per year of service.

Termination by the Employee

  • Notice Period (by seniority):

    • Less than 2 years: 30 days.
    • More than 2 years: 60 days.
  • Compensation (by seniority): 15 – 45 days’ wages per year of service.

Unlawful Termination

  • Notice Period: Must notify the employer within 30 days of becoming aware of the unlawful termination.
  • Compensation: 15 – 45 days’ wages per year of service, determined according to the employer’s illegal acts; shall not be less than 3 months’ basic wage plus seniority allowance.

Note: The salary base for compensation is capped at 20 times the minimum wage, and the total compensation shall not exceed 12 times the employee’s basic wage or 240 times the minimum wage.

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

  • Initial Consultation: The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.
  • Payroll Management: We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with Portuguese regulations.
  • Contributions and Taxes: Our expertise in managing local social statutory contributions and local income tax ensures your business complies with financial obligations in Portugal.
  • Compliance with Working Hours: We guarantee that your employment practices adhere to Portugal’s working hours standards, safeguarding your business against potential legal issues.
  • Leave and Paid Time Off Management: Implement and manage leave policies that comply with Portugal’s laws, ensuring a fair and transparent leave management system for your employees.
  • Regulatory Compliance: Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.
  • Other services: Work visa, permit applications, termination procedures.

Services may vary across countries.

Benefits of BIPO Employer of Record Service in Portugal

Unlock your growth potential with BIPO’s Employer of Record service in Portugal. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities.

Stay up to date with the latest employment regulations.

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Frequently Asked Questions (FAQ)

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees.

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from:

  • Compliance in the global markets where you operate
  • Reduced costs and risk mitigation
  • Overall workforce productivity, effectiveness, and efficiencies

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

  • Scale their global business and be fully operational in foreign markets quickly
  • Reduce financial and HR complexities while expanding internationally
  • Minimise time spent trying to understand local labour laws and foreign tax systems
  • Stay compliant across global markets while reducing HR and administrative workflows
  • Benefit from a centralised and intuitive cloud HR platform to manage international teams

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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