Employing People in Portugal
Portugal has strong employee protections. Understanding employment law before hiring is essential — mistakes can be costly. Whether hiring one assistant or building a team, the rules are the same.
Register as an employer
Register your company at Seguranca Social as an entidade empregadora before the employee's first day. Submit Form RV1003.
Draft an employment contract
Must be in writing for fixed-term contracts. Permanent contracts can be verbal but written is strongly recommended. Must include: job description, salary, working hours, start date, workplace.
Understand minimum terms
Minimum wage (2026): check current year as it increases annually. Standard hours: 40/week, 8/day. Overtime: 25% extra first hour, 37.5% after. 22 working days annual leave minimum. 14 months salary (12 + Christmas + holiday subsidies).
Register the employee
Communicate the employment to Seguranca Social and ACT (labor authority) before the employee starts. The employee needs NIF and NISS.
Documents needed
- Employee's NIF
- Employee's NISS
- Employment contract
- Employee's ID
Handle monthly obligations
Social Security contributions: 23.75% employer + 11% employee (withheld from salary). IRS withholding: based on salary level and family situation. Both due by the 20th of the following month.
Provide mandatory insurance
Work accident insurance (seguro de acidentes de trabalho) is mandatory. Covers workplace injuries and commuting accidents.
Watch out
- ●Terminating employees in Portugal is very restricted — you cannot fire at will. Valid reasons: redundancy (with compensation), disciplinary (with formal process), contract expiry
- ●Trial periods are 90 days for most employees, 180 days for management roles, 240 days for senior leadership
- ●The 14-month salary structure (subsidio de ferias + subsidio de natal) is mandatory — budget for it
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