Employing in Portugal.

Minimum wage

Portugal's guaranteed minimum monthly wage for 2026 is EUR 920 gross on the mainland, paid 14 times a year with the holiday and Christmas allowances; Madeira sets EUR 980.

EUR 920 per month (14 payments) · from 1 January 2026per month, gross, mainland Portugal; no age bands; 12 monthly payments plus holiday and Christmas allowances (EUR 12,880 a year)

• Mainland: EUR 920.00 from 1 January 2026 (Decreto-Lei n.º 139/2025, art. 3); the decree applies to the mainland only (art. 2)
• No age-based rates; apprentices, trainees and workers in certified training may be paid 20% less, for at most one year (six months with a relevant vocational qualification) (Labour Code art. 275)
• Workers with reduced work capacity: reduction equal to the capacity shortfall where it exceeds 10%, capped at 50% (Labour Code art. 275)
• Benefits in kind count towards the minimum within limits: full board 35%, one main meal 15%, lodging 12%, all in kind 50% (Labour Code art. 274)
• Madeira: EUR 980.00 from 1 January 2026 (Decreto Legislativo Regional n.º 1/2026/M)
• Azores: regional amount not confirmed from a primary source today
• Earlier value: EUR 870.00 in 2025 (Decreto-Lei n.º 112/2024)

Changes on 1 January 2027: EUR 970 a month on the mainland, announced with the 2027 State Budget; the decree-law is not yet made. Announced Source: OE 2027: um Portugal mais preparado, com mais rendimento e investimento

Employer social security contributions

Employers pay 23.75% of gross pay to Social Security and withhold the employee's 11%, 34.75% in total with no ceiling; no work compensation fund payments are due in 2026.

23.75% employer (11% employee); no ceiling% of gross pay, general Social Security regime for employees; total rate 34.75%

• Employer 23.75%, employee 11%, total 34.75% for the general regime (Código dos Regimes Contributivos, art. 53)
• Base: gross remuneration due for the work (art. 44(1)); the code sets a monthly maximum base only for the self-employed (12 x IAS), none for employees
• Lower rates or exemptions apply to some categories and hiring incentives, for example non-profit employers (ISS practical guide)
• Work Compensation Fund (FCT): obligations to join and to pay ended from 1 January 2024 (DL 115/2023, art. 4(a))
• Wage Compensation Guarantee Fund (FGCT): rate 0.075% of base pay and seniority payments (Lei 70/2013, art. 12(2)), but the payment obligation is suspended until the end of the Acordo de Médio Prazo (DL 115/2023, art. 4(b))
• Additional contribution for excessive turnover where an employer's share of fixed-term hiring exceeds the sector indicator (art. 55-A)

Our sum of the published rates: the employer share of 23.75% and the employee share of 11% make 34.75% in total.

Payroll tax withholding and filing

The employer withholds income tax (IRS) at each payment, files a monthly pay return with the Tax and Customs Authority by the 10th and pays the tax by the 20th of the following month.

Employer, monthly: pay declaration by the 10th, IRS paid by the 20thIRS (personal income tax) withholding, Autoridade Tributária e Aduaneira (AT), https://www.portaldasfinancas.gov.pt; Social Security return and payment separate (Instituto da Segurança Social, https://www.seg-social.pt)

• Employers paying employment income withhold IRS when paying (CIRS art. 99(1)(a))
• Monthly official-model declaration of pay, tax withheld, mandatory social contributions and union dues: by the 10th of the month after payment (CIRS art. 119(1)(c)(i))
• Tax withheld paid to the State by the 20th of the month after deduction (CIRS art. 98(3))
• Annual statement to each employee by 20 January (CIRS art. 119(1)(b))
• Social Security, new contribution model (SCC; optional during 2026, mandatory for all employers from 1 January 2027): confirm the pre-calculated values by the 20th and pay between the 1st and 25th of the following month (CRC arts. 40(8) and 43)
• Each hire is notified to Social Security before work starts (CRC art. 29)

Changes on 1 January 2027: All employers move to the new Social Security contribution model: confirm the declaration by the 20th and pay from the 1st to the 25th of the following month. Income tax deadlines do not change. Published Source: Decreto-Lei n.º 127/2025, de 9 de dezembro

Salary payments a year and holiday allowance

Employees receive 14 payments a year: 12 monthly salaries, a holiday allowance normally paid before the holiday, and a Christmas allowance of one month's pay by 15 December.

14 (12 monthly + holiday and Christmas allowances)salary payments a year; statutory holiday allowance (subsídio de férias) and Christmas allowance (subsídio de Natal)

• Christmas allowance: one month's pay, due by 15 December; pro rata in the year of hiring, the year of termination and on suspension for reasons concerning the worker (Labour Code art. 263)
• Holiday allowance: base pay and other payments tied to the specific way the work is performed, for the minimum holiday duration (art. 264(2))
• Holiday allowance paid before the holiday starts, unless agreed otherwise in writing (art. 264(3))
• Pay during holidays equals normal pay (art. 264(1))

Paid annual leave

Employees are entitled to at least 22 working days of paid annual leave a year, counting Monday to Friday and excluding public holidays; new starters accrue two days a month, up to 20.

22 working daysminimum paid annual leave a year; working days are Monday to Friday, excluding public holidays

• Minimum 22 working days (Labour Code art. 238(1))
• Working days are Monday to Friday except public holidays; where rest days fall on working days, non-holiday Saturdays and Sundays count instead (art. 238(2)-(3))
• The worker may give up days above 20 working days without loss of pay or allowance (art. 238(5))
• Year of hiring: two working days per month of the contract, up to 20, usable after six months (art. 239(1))

Sick pay

Social Security pays sickness benefit from the fourth day of incapacity, at 55% to 75% of reference pay depending on duration, for up to 1,095 days; employers have no statutory sick pay duty.

Social Security from day 4: 55% to 75% of reference pay, up to 1,095 days; no employer sick paysickness benefit (subsídio de doença) for employees, as a percentage of reference pay (remuneração de referência) by length of illness

• Three waiting days for employees; paid from day 1 for hospitalisation, ambulatory surgery, tuberculosis, or illness starting during parental benefit (ISS guide E1)
• Up to 30 days 55%; 31 to 90 days 60%; 91 to 365 days 70%; over 365 days 75% of reference pay (ISS guide)
• The 55% and 60% rates rise by 5 points where reference pay is EUR 500 or less, or with three or more dependent children, or a child receiving the disability supplement (ISS guide)
• Maximum period for employees: 1,095 days (ISS guide)
• Self-declaration of illness (autodeclaração) gives no benefit but can count towards the waiting days when followed by a medical certificate (ISS guide)
• Employer: an absence for illness is unpaid where the worker is covered by a Social Security sickness scheme (Labour Code art. 255(2)(a))

Running payroll without a local entity

Employer registration with Social Security is automatic when a company starts activity for tax purposes or opens a permanent representation of a foreign entity; registration without any Portuguese establishment is not confirmed.

Social Security employer registration and tax registration needed; route without any Portuguese establishment not confirmedSocial Security: Instituto da Segurança Social, I.P.; tax: Autoridade Tributária e Aduaneira

• Legal persons are registered with Social Security automatically at the start of activity, on creation of a representation of a foreign entity, or on other listed events (ISS guide 2001; CRC art. 34(2)-(3))
• Registration takes effect from the start of activity declared for tax purposes (CRC art. 35(1)(a))
• Each hire must be notified through Segurança Social Direta before work starts (CRC art. 29(1)-(2))
• Employers paying employment income withhold IRS (CIRS art. 99(1)(a)); the rule's application to a non-resident employer without an establishment was not confirmed

Being confirmed with the authority: whether, and how, an employer with no establishment or permanent representation in Portugal registers with Social Security, obtains a tax number and withholds income tax. Official guidance does not cover this case.

Pension

Retirement is covered by the Social Security old-age pension, funded through general contributions, with a normal pension age of 66 years 9 months in 2026; workplace schemes are optional.

State Social Security pension; no mandatory workplace schemeold-age pension under the general Social Security regime, funded by the 34.75% contributions; complementary workplace schemes voluntary

• The employees' general regime covers sickness, parenthood, unemployment, occupational disease, invalidity, old age and death (CRC art. 28)
• Complementary collective schemes, including occupational schemes, are optional ('instituição facultativa') (Lei 4/2007, art. 83(1))
• Individual complementary schemes (retirement savings plans, life insurance) are optional (Lei 4/2007, art. 84); the public capitalisation scheme is voluntary (art. 82(1))
• Normal pension age: 66 years 9 months in 2026; 66 years 11 months in 2027 (ISS guide; Portaria n.º 476/2025/1)

Changes on 1 January 2027: Normal pension age 66 years 11 months. Published Source: Portaria n.º 476/2025/1, de 29 de dezembro

Probation and notice

Probation lasts 90 days on open-ended contracts, 180 for complex or trust roles, first-job seekers and the long-term unemployed, 240 for directors; employees give 30 or 60 days' notice, employers 15 to 75 days.

Probation 90 days (180 or 240 for some roles); notice 30/60 days (employee), 15 to 75 days (employer)open-ended contracts; employer notice for collective dismissal and job-extinction dismissal, by length of service

• Probation, open-ended contracts: 90 days generally; 180 days for roles of technical complexity, high responsibility or special qualification, positions of trust, first-job seekers and the long-term unemployed; 240 days for directors and senior managers (Labour Code art. 112(1))
• Probation, fixed-term contracts: 30 days (six months or longer) or 15 days (shorter) (art. 112(2))
• Ending during probation: no notice, except 7 days' employer notice after 60 days and 30 days after 120 days (art. 114(1)-(3))
• Employee resignation: 30 days' notice up to two years' service, 60 days above; up to six months for senior roles by agreement; 30 or 15 days on fixed-term contracts (art. 400)
• Employer notice for collective dismissal and job-extinction dismissal: 15 days (under 1 year), 30 days (1 to 5 years), 60 days (5 to 10 years), 75 days (10 years or more) (arts. 363(1) and 371(3))