HR Software for Portugal
Leave Policy
Maternity Leave
Pregnant employees who have made social security contributions in the last six months are entitled to 120 or 150 days of paid leave. 30 days are usually taken before the birth of the child. The remaining days can be divided into two periods. During this period, the employee receives 80 to 100% of his salary, depending on the length of the vacation. Social security is responsible for this salary.
The employee can extend the vacation for another 90 days and receives 25% of the salary.
You can use the leave module in IceHrm to manage maternity leave in Portugal.
Paternity Leave
Employees who have paid social security contributions in the last six months are entitled to 20 days of paid paternity leave and five additional days of voluntary leave, provided that they are taken at the same time as the mother’s first parental leave. The first 5 days must be taken after the birth of the child, the remaining 15 days, whether consecutive or not, must be taken within the following 6 weeks. During this period, the employee receives 100% of his or her regular salary. Paternity leave is financed by social security.
Parental Leave
Employees are entitled to 120 working days of parental leave. Both parents can decide how to divide the leave, which should be taken 30 days after maternity leave. Both parents can take parental leave. Social Security pays 80-100% of salary during this period, depending on how the vacation was divided between the partners.
Sick Leave
Employees are entitled to paid sick leave for up to 1095 days if they have made contributions to Portuguese social security in the last 6 months. The first 3 days are unpaid and are considered a waiting period. Depending on the duration, this vacation is paid at different rates and by different payers:
| Period | Pay | Payer |
|---|---|---|
| 0 – 3 days | 0% | N/A |
| 3 – 30 days | 55% of base salary | Social Security |
| 31 – 90 days | 60% of base salary | Social Security |
| 91 – 365 days | 70% of base salary | Social Security |
| +365 days | 75% of base salary | Social Security |
Pay & Tax
Minimum Wage Requirements
The annual minimum wage for workers in Portugal is EUR 11,480. This includes the mandatory 13 and 14 month salary payments.
You can use the leave module in IceHrm to manage maternity leave in Portugal.
Individual Income Tax
Taxes are collected by the Portal das Finanças according to progressive tax tables ranging from 0 to 47.17%. Tax rates are set annually by the Portuguese government.
The extent of individual taxation depends on various factors, including income, region of residence, marital status, immigration status, disability status and number of dependents.
Payroll Cost
Employer costs are generally estimated at 26.9% of employee salary:
- Social security* – 23.75%
- Workers’ compensation insurance* – 3.15%
- Telework allowance – €50
- 13th month salary – 1/12 of 1 month basic salary
- 14th month salary – 1/12 of 1 month basic salary
- Mandatory meal allowance – €6 per working day
Annual costs
- Health and safety at work – 150 EUR
*Social insurance, labor insurance and accident insurance are calculated based on the employee’s salary + telework allowance.
Please note that the 13th and 14th monthly salaries are paid to the employee in monthly installments and are included in the total annual salary. The usual social security contributions apply.
Overtime Pay & Maximum Hours
The standard working hours are 8 hours per day and 40 hours per week. The normal working week lasts from Monday to Friday.
Overtime must be paid and is not included in salary. Hours worked outside of regular working hours are considered overtime. Employees can work a maximum of 2 hours of overtime per day. Employees receive compensation for overtime:
- 125% of the hourly rate for the first hour.
- 137.5% of the hourly rate for the following hours.
- 150% of the hourly rate for weekends and holidays.
Termination
Termination Requirements
Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps for specific termination cases.
Terminating an employment relationship in Portugal can be complicated and must be done on the basis of performance or dismissal reasons (e.g. serious reasons, unsuitability for the role, role extinction).
Compliant terminations are:
- Voluntary by the employee
- By mutual agreement
- Unilaterally by the employer on the basis of:
Objective reasons.
Disciplinary dismissal
Unsuitability for the position.
By expiry of the contract
It is not possible to terminate a contract if the employee is taking parental leave, pregnant or breastfeeding.
Notice Period
The notice period depends on the type of termination, the duration of the employment relationship and the contract term.
- During the probationary period
1. None if the probation period is < 60 days
2. 7 days if the probationary period lasted more than 60 days and less than 120 days
3. 15 days if the trial period lasted longer than 120 days - Termination of employment due to dismissal or unsuitability by the employer: 15 days if the duration of the employment relationship is less than one year. 15 days if the duration of the employment relationship is less than one year.
15 days for less than one year of service.
30 days with less than five years of service.
60 days with less than ten years of service.
75 days if you have been with the company for ten years or more. - Voluntary termination by the employee:
30 days if the length of service is less than two years.
60 days if you have been with the company for two or more years. - Termination for good cause
The notice period is not mandatory. - Non-renewal of a fixed-term contract:
15 days for the employer.
8 days for the employee.
Severance for Employees
In Portugal, employees who are dismissed due to redundancy or lack of suitability for the job are entitled to severance pay.
- For permanent contracts, the severance payment is 14 days per year of service up to 12 months of the basic salary.
- For fixed-term contracts, the severance payment is 24 days per year of service.
Statutory Time Off
Paid Time Off
Both full-time and part-time employees are entitled to 22 days of paid vacation per year. Employees are entitled to annual leave after 6 months of work. Part-time employees are entitled to the same vacation as full-time employees. During the first year of employment, an employee may not take more than 20 days.
Public Holidays
In Portugal there are 14 national holidays and one regional holiday, which depends on the employee’s place of residence.
National holidays include:
- New Year’s Day
- Good Friday
- Easter Sunday
- Freedom Day Portugal
- Labour Day
- Corpus Christi
- Portugal Day
- Assumption Day
- Republic Day Portugal
- All Saints day
- Independence Day Portugal
- Immaculate Conception
- Christmas
- Shrove Tuesday
Onboarding
Onboarding
3 working days
Additional Info
Employment Contract Details
The contracts must be written in Portuguese and can be bilingual. They must be in writing and signed by both parties.
The contract must contain:
- Surname
- Start date
- Length of employment
- Job descrption
- Conditions for the probationary period
- Conditions for termination of employment
- Payment conditions for holiday and Christmas bonuses
- Remote work clause
Probation Period
Probation periods are not mandatory. The maximum duration of the probationary period is 240 days. The duration depends on the type of contract and the employee’s seniority:
Permanent contracts:
- 90 days for regular employees
- 180 days for employees who hold technically complex positions, have a high level of responsibility, perform managerial functions or require special qualifications.
- 240 days for employees in director or senior management positions.