Do you want to hire an employee in Portugal without a permanent establishment but need a Portuguese payroll? IPS can help you hire and pay employees in Portugal in compliance with the law, even without a Portuguese branch or permanent establishment.

There are 2 ways you can hire someone in Portugal without a permanent establishment:

  1. Employer of Record (Portugal) – this is where your employee is employed directly by us and deployed to you full time. This is also known as employee leasing in Portugal.
  2. Direct employment in your company but with payroll accounting according to Portuguese law by registering your company as a foreign employer.

Both employment options offer their advantages and disadvantages. Contact us to find out which one suits your project better. We will be happy to advise you and find the best solution for your company.

IPS is your global payroll solution for a successful and fast international expansion without a permanent establishment.

Remote Work Full Time from Portugal – Information for Hiring Employees in Portugal

To ensure that you succeed in your first go abroad, IPS as your international payroll partner is here to assist you with the correct employment of your employees in Portugal and the preparation of Portuguese payroll in accordance with the laws of the country. Following is some information to help you understand the Portuguese payroll system.

Wage costs

Employer costs in Portugal vary according to the personal situation of the employee and lay at approx. 26.50% on top of the gross salary.

If you do not have an office in Portugal, you will need a service like IPS to calculate and pay these additional employer costs correctly according to Portuguese law. With international payroll in Portugal from IPS, you can ensure that your employee is paid compliantly according to Portuguese law.

International payroll services in Portugal require compliance with Portuguese employment law.

As your international payroll service in Portugal, we make sure you are equipped with the information you need. 


An employer must allow an employee paid sick leave, and employees are allowed three days of paid leave at 100% of their normal pay. If the employee requires more leave, Social Security pays for the sickness allowance, which allows most employees 1,095 days of paid sick leave.

Depending on the type of employee and the duration, those who qualify for sick leave may be entitled to 55% to 100% of their basic salary.

Vacation and public holidays

In Portugal, employees are entitled to a minimum of 22 working days holiday each year.

Portugal has the following public holidays:

  • New Year’s: 1 January.
  • Freedom Day (Dia de la Liberdade): 25 April.
  • Good Friday: Friday before Easter
  • Labour Day (Dia do Trabalhador): 1 May.
  • Corpus Christi: 8 June
  • Portugal Day: 10 June.
  • Saint Anthony’s Day (Dia de Santo António): 13 June.
  • Assumption Day: 15 August.
  • Republic Day (Implantação da República): 5 October.
  • All Saint’s Day (Todos os Santos): 1 November.
  • Restoration of Independence Day (Restauração da Independência): 1 December.
  • Immaculate Conception (Imaculada Conceição): 8 December.
  • Christmas: 25 December.

Probationary period/termination

In Portugal, the probation period for permanent employees is 90 days, 180 days for high technical/complexity roles, and 240 days for management, directorate, and equivalent responsibility roles.

Depending on how long an employee has been with the company, the following notice periods apply:

  • less than or equal to a year working for the company: 15-day notice period;
  • greater than or equal to one year and less than five years: 30-day notice period;
  • greater than or equal to five years and less than ten years: 60-day notice period;
  • greater than or equal to ten years: 75-day notice period.

In the case of an Objective dismissal, a severance payment must be made. It currently corresponds to 12 days of base salary plus seniority payments per each year/fraction of seniority with a maximum limit of 12 salaries or 240 times the minimum monthly wage (2022).

As your international payroll company in Portugal, we will ensure that you comply with the legal framework when giving notice.

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