Euro (EUR)



Time Zone


Employer Tax



The standard rates of VAT in Portugal are 23.00% in Continental Portugal, in Azores, it is 18.00% and in Madeira, it is 22.00%

Fiscal Year

1 Jan - 31 Dec

Table of Contents

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Key Country Facts

Portugal is a southern European country that is situated on the Iberian Peninsula. It is a coastal country that shares borders with Spain to the north and east, the Atlantic Ocean to the west, and the Mediterranean Sea to the south. Portugal has a rich history, with the country having played an important role in the Age of Discovery in the 15th and 16th centuries. Today, it is known for its stunning beaches, delicious cuisine, and vibrant culture.


Portugal covers an area of approximately 92,212 square kilometers (35,603 square miles). It is the westernmost country in mainland Europe and is about the same size as the US state of Indiana.


The climate in Portugal is generally warm and sunny, with mild winters and hot summers. The country experiences a Mediterranean climate in the south and a temperate maritime climate in the north. The summer months (June-August) can be quite hot, with temperatures often reaching 30°C (86°F) or higher. The winter months (December-February) are cooler, with average temperatures around 10-15°C (50-59°F).


Portugal has a rich and diverse culture that has been shaped by its history and geography. The country is known for its traditional folk music, dance, and art. It is also famous for its food, which includes dishes like bacalhau (salt cod), grilled sardines, and pasteis de nata (custard tarts). Football (soccer) is the most popular sport in the country, and the national team has won the European Championship and the World Cup.


Roman Catholicism is the dominant religion in Portugal, with around 81% of the population identifying as Catholic. Other religions, such as Protestantism and Islam, are also practiced in the country, although in much smaller numbers.

Official Language

The official language of Portugal is Portuguese, which is spoken by around 99% of the population. Portuguese is also spoken in other countries, such as Brazil, Angola, and Mozambique, and is one of the world's major languages.

Payroll Information

Payroll Cycle

In Portugal, the payroll cycle is typically monthly, with employees receiving their salary at the end of each month. Employers are required to make social security contributions on behalf of their employees, which are based on the employee's gross salary and are typically around 23.75% of the gross salary. Additionally, income tax is also deducted from the employee's salary based on their income level.

Employment Law

Employment law in Portugal is governed by the Labor Code, which outlines the rights and obligations of both employers and employees. The code includes provisions for minimum wage, maximum working hours, overtime pay, paid leave, and termination of employment, among other topics.

Employment Contract

Employment contracts in Portugal can be either fixed-term or indefinite-term. Fixed-term contracts are typically used for temporary work, seasonal work, or project-based work. Indefinite-term contracts are used for permanent employment. The contract must include information such as the job title, salary, working hours, and duration of the contract (if applicable). Additionally, employers are required to provide employees with a written statement of their terms and conditions of employment within 15 days of their start date.

Probation Period / Trial Period

In Portugal, probation periods are allowed in employment contracts, with a maximum duration of 90 days for non-executive positions and 180 days for executive positions. During this period, either party can terminate the employment contract without the need for prior notice.

Working Hours

The standard working week in Portugal is 40 hours, although some collective agreements may establish a shorter workweek.


Overtime is typically paid at a rate of 50% above the regular hourly rate for the first hour, and 75% for subsequent hours.


Bonus payments in Portugal are not mandatory, although some collective agreements or employment contracts may include them. Employers are not required to pay a Christmas bonus, but it is common practice to do so.


Termination of employment in Portugal can occur through mutual agreement, expiration of a fixed-term contract, resignation, or dismissal. In the case of dismissal, employers must have a valid reason and follow a formal procedure, including providing written notice to the employee and following specific timelines. The notice period required for termination depends on the employee's length of service, ranging from 15 days for employees with less than one year of service to 75 days for employees with more than 12 years of service.

Notice Period

The notice period for termination of employment in Portugal is generally 60 days, but this may vary depending on the employee's length of service with the employer.

Redundancy / Severance Pay

Redundancy in Portugal is governed by specific rules and procedures. Employers must provide employees with advance notice and engage in a consultation process. Employees who are made redundant may be entitled to a severance payment and other benefits.

Maternity Leave

Female employees are entitled to 120 days of maternity leave, which can start up to 30 days before the expected delivery date.

Paternity Leave

Male employees are entitled to 15 days of paternity leave, which can be taken in a continuous period or intermittently.

Parental Leave

Each parent is entitled to up to 30 days of parental leave to care for a child under 12 years old.

Vacation and Annual Leave (paid time off)

Employees are entitled to 22 working days of annual leave per year. This entitlement increases to 25 days for employees with more than 10 years of service.

Sick Leave

Employees are entitled to up to 30 days of paid sick leave per year. After the 30 days have been exhausted, employees may be entitled to a partial sick pay benefit.

Other Leave

Employees may also be entitled to leave for specific reasons such as marriage, moving house, or attending to civic duties.

Other Benefits

In addition to leave and holidays, employers in Portugal may offer other benefits to their employees, such as health insurance, pension plans, and meal vouchers. Collective bargaining agreements may also provide for additional benefits such as profit-sharing, transportation allowances, or bonuses.


Portugal has 14 public holidays per year, including Christmas Day, New Year's Day, and Easter Monday.


In Portugal, both personal income tax and social security contributions are mandatory for employees and employers. The tax system is progressive, which means that those with higher incomes pay a higher percentage of their income in taxes.

Personal Income Tax

Portugal has a progressive income tax system, with rates ranging from 14.5% to 48% for income above a certain threshold. In 2023, the income tax rates will range from 14.5% to 56.5% for income above a certain threshold. Taxable income includes all income earned by the employee, including salaries, bonuses, and other benefits. However, there are various deductions and exemptions available that can reduce the taxable income.

Social Security

Social security contributions are mandatory for both employees and employers. In 2023, employees are required to contribute 11% of their gross income, while employers are required to contribute 23.75% of the employee's gross income. Social security contributions are used to fund a range of benefits, including pensions, health care, and unemployment benefits.

Visas and Foreign Workers

General Information

To work in Portugal as a foreign national, a work visa is generally required. The process for obtaining a work visa in Portugal typically involves several steps, including:

  1. Obtaining a job offer: Before applying for a work visa, foreign nationals must have a job offer from a Portuguese employer.
  2. Applying for a work visa: After receiving a job offer, foreign nationals must apply for a work visa at the Portuguese consulate or embassy in their home country. The application process typically involves providing various documents, such as a valid passport, proof of employment, and evidence of sufficient funds to support themselves while in Portugal.
  3. Waiting for processing: Once the application has been submitted, the processing time for a work visa can vary, but it typically takes several weeks to several months.
  4. Obtaining a residence permit: After arriving in Portugal, foreign nationals must apply for a residence permit within 90 days of their arrival.

In addition to these steps, there may be additional requirements and regulations depending on the individual's circumstances, such as background checks or medical exams.

It is important to note that the requirements and regulations for obtaining a work visa in Portugal can change over time. Therefore, it is important to stay up-to-date with the latest information and regulations to ensure a successful application. It is also recommended to consult with a legal or immigration professional to assist with the visa application process.