If you are thinking of moving to Portugal, you may have heard of the D2 visa for which is made for those who want to open up a business or a branch of their business in Portugal. If you’re running a small to medium sized business and are interested in hiring talent in Portugal, there are things you need to know and consider before you do. This will help guide you in your decision making process and walk you through how to hire employees in Portugal.
Things You Need To Know Before Hiring Employees In Portugal
Working Hours & Schedules In Portugal
Do you need to know the working days, working hours and schedules in Portugal? Before relocating your business to Portugal, you should consider how many public holidays there are in the country and how these holidays affect the working week.
- The work day runs from 9am to 6pm.
- The Portuguese work week is 40 hours.
- The Portuguese work day is 8 hours.
Portuguese Public Holidays
Portugal has a lot of holidays when employees have the day off. This is a list of those 13 national holidays (these are always given as days off).
Portuguese employees are entitled to 22 vacation days.
However, during their first year of employment, employees cannot take more than 20 days of vacation.
Depending on where they live, your Portuguese employees may get additional regional holidays.
DATE
Jan 1
Apr
Apr
Apr 25
May 1
Jun 3
Jun 10
Aug
Oct 5
Nov 1
Dec 1
Dec 8
Dec 25
HOLIDAY
New Year’s Day
Good Friday
Easter
Freedom Day
Labor Day
Corpus Christi
Portugal Day
Day of the Assumption
Day of the Republic
All Saints Day
Restoration of Independence
Day of the Immaculate Conception
Christmas Day
Sick Days In Portugal
The good news is that social security covers PTO when there is sickness or injury. The total number of sick days that someone may be eligible for is 1095 days. During this time they may get somewhere between 55-75% of their total salary.
Maternity Leave
- Pregnant employees get 30 days at full pay before the child’s birth.
- Employees who just gave birth get 6 weeks off at full pay after.
- Your employees can take maternity leave all at once, or they can break it up into 2 separate periods – 30 days before the birth, 60 days after.
- In case of twins, they will get an extra 30 days off.
- Your employees also have the option to take off an additional 150 days at 80% of what they normally make as salary.
- Dads get only 10 days of paid paternity leave that they need to use up within 30 days of having their kid. Half of these must be consecutive.
How Much Do Portuguese People Get Paid?
Portuguese people get paid very little compared to the cost of living. If you are willing to pay higher wages, you can get loyal and trustworthy employees. Here is a breakdown of how much people get paid in Portugal on average, and the extra perks you need to be prepared to pay. Portuguese people get paid monthly and in Euros.
Average Salary in Portugal 2021 – €1,361
13th & 14th Month – Portuguese employees get an extra month’s pay for the Summer vacation and before the Christmas holiday.
Overtime Rules In Portugal
Portuguese employees have many more protections when it comes to overtime than other countries. Here are the things you need to know about Overtime in Portugal:
- Employees cannot work more than 48 hour weeks.
- Employees cannot work more than 2 extra hours daily of overtime.
- If your company has more than 50 employees, your employees cannot work more than 150 hours of overtime per year.
- If your company has fewer than 50 employees, they can only work up to 175 hours of overtime per year.
- You must pay your employees 25% more for the first hour of work.
- Additional hours must pay 37.5%.
- If your employees are working on holidays, overtime pay is 50%.
Benefits, Equipment, And Extra Expenditures
If you are an employer in Portugal, you will be responsible for the following:
- Equipment for remote work and around €50 for its maintenance.
- Lunch stipend or meal card (around €8 per working day).
Non-Compete Agreements
Portuguese laws make it really unfavourable for employers to ask for non-compete contracts.
If you want your employee to be under a non-compete, you need to pay them while the agreement is in place. The amount must be agreed upon and should be at least 50% of what their salary was while they were with you. You’re basically stuck paying them for the duration even if they are not working with you.
Evaluation-Probationary Period
When you first hire an employee, their probationary period normally lasts 90 days. For roles that are more complex and require more trust, the probationary period is increased to 180 days. For those who are in managerial or director roles it lasts 240 days.
Firing Someone In Portugal
It is really hard to fire someone in Portugal. It is not like in the states where many places have “at will” rules. In Portugal, you can only terminate someone if their performance is bad or if there is redundancy on your team.
Severance pay in Portugal depends on seniority and experience. An employee who is terminated due to redundancy is owed severance pay.
The rules on how much notice you must give, changes according to the reason you are firing that particular employee:
- REDUNDANCY FIRING
Working for less than 1 year – 15 days
More than 1 year, but less than 5 years – 30 days
More than 5 years, but less than 10 years – 60 days
More than 10 years – 75 days.
Notice For Quitting
If your employee has been working with you for fewer than 2 years, he/she must let you know they are quitting 30 days before they leave. If they have been with you for more than 2 years, then they need to let you know with 60 days advance.
Taxes Paid By Employers
Employers in Portugal pay 26.5% in taxes which are broken down into:
- 23.75% – social security
- 1.75% – labor accident insurance
- 1% – wage guarantee fund
Hopefully, you have a better idea on what to expect when hiring employees in Portugal. Those who employ people in Portugal must comply with a multitude of employment laws, benefits, and monetary constraints that may not make it as palatable to hire in Portugal. On top of the legal requirements, before hiring in Portugal, you should also understand certain cultural norms regarding the hiring process and workplace in Portugal so that you do not make costly mistakes when hiring employees.
Before hiring someone to work for you in Portugal, I suggest you consult a Portuguese lawyer to break things down for your particular situation. This is a list of English-speaking Portuguese lawyers who could help you with that.
If you’re still confused about something or would like further information, don’t hesitate to contact the proper Portuguese authorities for further details. If you have had experiences with hiring people in Portugal, share them in the comments so we can all learn more.