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Portugal Hiring Guide

Hire compliantly in Portugal. Navigate TSU contributions, mandatory 13th and 14th month salary payments and a labour code where termination is heavily restricted.

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Capital

Lisbon

Language

Portuguese

Average Salary

EUR 1,500

Payroll Cycle

Monthly

Employer Cost

25-26%

Paid Leave

22 days

Public Holidays

13 days

Tax Rates

13.25-48%

Portugal Guides

Hiring guides covering regulations, contributions and costs specific to Portugal. Updated for 2026.

Minimum Wage in Portugal: The Complete 2026 Guide

Portugal’s minimum wage increased to €920 per month on January 1, 2026, with a government roadmap targeting €1,020 by 2028. However, mandatory 13th and 14th month payments bring the true annual minimum to €12,880 - not €11,040. Employer social security contributions add 23.75% on top of gross salary, and Madeira and the Azores apply higher regional rates. This guide explains the current minimum wage in Portugal, employer obligations, regional differences, compliance risks, and how an Employer of Record can support compliant hiring.

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The 15 Best Cities to Work Remotely in 2026

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Best Employer of Record in Portugal

Portugal pays employees 14 times per year, not 12. TSU contributions apply to all 14 payments. A provider that budgets employer cost on 12 months will underestimate annual obligations by roughly 17%.

Our assessment of providers in Portugal evaluates entity structure, payroll accuracy across the 14-payment cycle and compliance with the Portuguese Labour Code.

Best EORs in Portugal

Before You Hire in Portugal

Employer TSU is 23.75% of gross salary, applied to all 14 payments. Social security (Taxa Social Unica) is uncapped and applies to every euro of salary, bonuses and the mandatory 13th and 14th month payments. No ceiling, no exemptions for high earners.
The 13th and 14th month salaries are mandatory. Every employee receives an extra month’s salary in June (holiday subsidy) and December (Christmas subsidy). These are not bonuses. They are statutory entitlements under the Labour Code, subject to full TSU and income tax.
The minimum wage increased to EUR 920/month in 2026. Up from EUR 870 in 2025. Portugal has been raising the minimum wage aggressively, with the government targeting EUR 1,020 by 2028. Plan for annual cost increases.
Termination without cause is essentially prohibited. Portuguese law does not recognize at-will employment. Dismissal requires a disciplinary process or a collective redundancy procedure. Wrongful dismissal results in reinstatement or compensation of 15-45 days’ salary per year of service.
The NHR regime was replaced by a new incentive in 2024. The Non-Habitual Resident tax scheme ended for new applicants in 2024. A replacement incentive (NHR 2.0) offers a flat 20% rate for qualifying scientific and technical professionals only, with stricter eligibility.

Why hire in Portugal

Lisbon has become Europe's fastest-growing tech hubs

Web Summit moved to Lisbon permanently. Cloudflare, Google, Amazon and Mercedes-Benz Digital all opened engineering offices. The result is a local talent pool that has worked at global scale, available at salaries 40-50% below London or Berlin for equivalent seniority.

14-month salary sounds expensive until you do the math

Total annual cost at EUR 1,500/month gross is EUR 26,006 including TSU on all 14 payments. The same role in Paris at EUR 2,500/month with 25-45% charges costs EUR 37,500-43,500. Portugal is genuinely cheaper for EU-based employment despite the 14-month structure.

Portuguese labour law creates genuine employee loyalty

Termination is difficult by design. That sounds like a downside, but it creates a workforce that invests in their role because they know the job is stable. Average tenure in Portuguese companies exceeds European averages, reducing recruitment costs over time.

One of the best climates in Europe attracts international talent

Lisbon averages 300 sunny days per year. This isn't a tourism pitch. The climate, combined with affordable cost of living and the NHR 2.0 tax regime for qualifying professionals, makes Portugal one of the top destinations for international talent relocating within Europe.

Key Employment Facts

Portugal's 14-payment salary structure and 22 days of mandatory annual leave make it one of the more employee-friendly frameworks in the EU.

Key Employment Facts
Minimum Wage	EUR 920/month (14 payments, from 2026)
Probation Period	90 days (180 for complex roles, 240 for senior management)
Standard Working Hours	40 hours/week (8 hours/day)
Paid Annual Leave	22 working days
Notice Period	15-75 days (by tenure, employee-initiated)
13th and 14th Salary	Mandatory (June and December)
Sick Leave	Up to 1,095 days at 55-75% via Social Security (from day 4)
Maternity Leave	120-150 days at 100-80% via Social Security

Good to Know: The 13th and 14th month payments are not discretionary extras. They are mandatory under Articles 263-264 of the Portuguese Labour Code. If an employee starts mid-year, both subsidies are prorated. Employer TSU of 23.75% applies to all 14 payments, so annual employer social security cost is 23.75% of 14 months’ salary, not 12.

What to Watch When Hiring in Portugal

TSU applies to the full 14-month salary with no cap

There is no social security ceiling in Portugal. A senior hire earning EUR 5,000/month costs EUR 1,187.50 in employer TSU per month, across 14 months. That's EUR 16,625/year in TSU alone. Unlike Germany or Poland where contributions cap out, in Portugal they scale indefinitely.

Meal allowances are partially TSU-exempt and used as a cost optimization tool

Meal allowances paid via card up to EUR 10.20/day are exempt from both TSU and income tax. Many Portuguese employers structure part of compensation as meal allowance to reduce the total tax burden. Your provider should understand and apply this correctly.

Misclassifying employees as contractors triggers retroactive TSU plus fines

If a contractor earns 80%+ of their income from one client, Social Security can reclassify them as an employee. The employer then owes retroactive TSU at 23.75% on all prior payments, plus back-payment of 13th/14th month, holiday entitlements and severance rights. Fines can reach EUR 9,690.

Gender pay gap audits are active and enforcement is increasing

The ACT (labour inspection authority) audited over 4,000 companies in 2025-2026 for gender pay gaps exceeding 5%. Companies found non-compliant must produce corrective action plans. This is active enforcement, not theoretical regulation.

Employer Costs and Employee Taxes in Portugal

Portugal's employer contributions are straightforward at 23.75% TSU, but the 14-month payment structure and uncapped contributions mean total annual cost is higher than the percentage suggests.

Employer Contributions
Contribution	Employer Rate
TSU (Social Security)	23.75% of gross (no cap, on all 14 payments)
Labour Accident Insurance	~1.75% of gross
FGCT (Compensation Guarantee Fund)	0.075% of gross
Total Employer Cost	~25.5-26% of gross (x14 months)

Employee Taxes
Tax / Contribution	Employee Rate
Income Tax (IRS, progressive)	13.25-48% (+ 2.5% solidarity surtax above EUR 80,000)
Social Security (employee share)	11% of gross

Good to Know: Portugal’s effective employer cost multiplier is approximately 1.47x of monthly base salary when you account for TSU on 14 payments. For an employee earning EUR 2,500/month, total annual employer cost is: EUR 2,500 x 14 months = EUR 35,000 gross, plus EUR 35,000 x 23.75% TSU = EUR 8,312, plus ~EUR 613 accident insurance and FGCT. Total: approximately EUR 43,925 per year. That’s EUR 3,660/month spread across 12 months of actual cost, against a gross salary of EUR 2,500.

Public Holidays in Portugal (2026)

Portugal has 13 mandatory public holidays. All are paid days off. When a holiday falls on a weekend, there is no substitute weekday off.

Date	Holiday
January 1	New Year’s Day (Ano Novo)
April 3	Good Friday (Sexta-feira Santa)
April 5	Easter Sunday (Pascoa)
April 25	Freedom Day (Dia da Liberdade)
May 1	Labour Day (Dia do Trabalhador)
June 4	Corpus Christi (Corpo de Deus)
June 10	Portugal Day (Dia de Portugal)
August 15	Assumption of Mary (Assuncao de Nossa Senhora)
October 5	Republic Day (Implantacao da Republica)
November 1	All Saints’ Day (Dia de Todos os Santos)
December 1	Restoration of Independence (Restauracao da Independencia)
December 8	Immaculate Conception (Imaculada Conceicao)
December 25	Christmas Day (Natal)

Good to Know: Each Portuguese municipality also observes one additional local holiday (feriado municipal), typically the patron saint’s day. Lisbon observes Santo Antonio on June 13, Porto observes Sao Joao on June 24. This local holiday is a paid day off but only applies to employees working in that municipality. Your payroll must reflect the correct local holiday for each employee’s work location.