Payroll in Portugal can be carried out by specialists in the field, who, with the help of dedicated procedures, can calculate and deliver salaries to employees in a company. If you are interested in Portuguese payroll taxes, we recommend that you contact one of our specialists and discuss all the aspects that interest you. In the following sections, you can discover information about payroll in Portugal and the formalities in this regard. We also offer services for company formation in Portugal, if you decide on business in this country.
| Quick Facts | |
|---|---|
| What does a payroll specialist in Portugal do? |
He/ she is in charge of salary calculation and related taxes. The distribution of wages is done in compliance with the policies and internal rules of the firm in question. |
|
What is a payslip? |
A document comprising information about the salary of an employee, including the contributions paid to the state. |
|
Importance of the payroll system in Portugal |
All employee data, like working hours and days off, are registered through a dedicated payroll system to properly calculate the wages before the distribution. |
| Who signs the documents before the distribution of salaries in the company? | Company managers/administrators |
| Benefits for employees in Portugal |
Annual/maternity/paternity/sick leave |
| Individual income tax in Portugal |
Ranging from 13% to 48% |
| Annual paid leave in Portugal |
22 days per year |
| Maternity leave in Portugal |
120 days |
| Labor accident insurance in Portugal |
1.75% paid by the employer |
| Content of a work contract |
– type of activities, – working hours, – salary, – company policy, etc. |
| Minimum wage in Portugal |
EUR 870 per month – It varies in the autonomous regions. |
| Additional salaries in Portugal |
13th and 14th salaries paid in June and December respectively |
| Payroll cycle |
Monthly |
| Types of work contracts in Portugal |
Full-time, part-time, project-based, etc. |
| Why choose our payroll specialists in Portugal? | We provide full payroll services to small, medium and large companies in Portugal at affordable prices. |
Table of Contents
Payroll procedures in Portugal
According to the Labor Code in Portugal, salary payments can be made once every two weeks or once a month, depending on the company’s internal regulations. Below, you can find details about what payroll entails in Portugal:
- The process starts with the calculation of the related taxes, paid by the employee and the employer. Payroll specialists use dedicated platforms and software.
- Payslips are drawn up with information on gross salary, taxes imposed and paid, working hours, and net salary.
- Payslips must be approved by the financial department, but also by the company’s management.
- We then move on to the delivery of salaries to the employees’ accounts, according to those established by the employment contract.
If you are interested in more details about payroll services in Portugal, do not hesitate to contact our team of specialists and discover the information that interests you.
On the other hand, our company formation agents in Portugal can help foreign investors to start a business in Portugal by managing the paperwork and formalities. Moreover, our accountants in Portugal are at your disposal for a wide range of services for your company in Portugal. Feel free to discover the following infographic on this topic:
Social contributions in Portugal
Both the employee and the employer are entitled to a share of social contributions, as follows:
- Unemployment fund – ranging from 0.075% to 0.925%, paid by the employer.
- Social security contributions – 11% for employees, 23.75% for employers.
- The income tax is based on the progressive system. Thus, incomes not exceeding EUR 7,703/year are taxed at 13%, while those exceeding EUR 80,000/year are taxed at 48%.
- Also, a solidarity surtax of 2.5% is charged for annual income between EUR 80,000 and EUR 250,000, and 5% for annual income above EUR 250,000.
We recommend that you find out more about Portuguese payroll taxes with one of our specialists, so you can understand why you need payroll services in Portugal and how to outsource this type of service.
Employment procedures in Portugal
Employer companies in Portugal must offer employment contracts to future employees. Thus, full-time, part-time or temporary, or fixed-term employment contracts can be signed, depending on the project. Such a contract must include details about the employing company, the activities performed by the employee, working hours, working conditions, remuneration, as well as how such a contract can be terminated.
The working week in Portugal is 40 hours, and the extra hours are paid accordingly. This is taken into account when payroll is made in Portugal. You can discuss more with our specialists about Portuguese payroll taxes.
Payroll requirements in Portugal
According to the legislation, payroll in Portugal is administered each month. On the other hand, these requirements must also be considered:
- Salary payments can be made until the last day of the month.
- All employees must receive a payslip each month, whether electronically or on paper.
- A payslip must include comprehensive details about the paid contributions, deductions, salary, etc.
- According to the legislation, companies in Portugal must keep payroll records for at least 5 years.
International entrepreneurs who want to set up a company in Portugal have the support and services of our local specialists. Contact us at any time if you want complete information, and also explore this video presentation about the payroll services available in Portugal:
Payroll options for Portuguese companies
Companies can open an accounting department in charge of specific procedures, but they also have other options. For example, payroll services in Portugal can be outsourced. Such services are quite complex, but with a dedicated team, you can benefit from all the necessary support in this direction. On the other hand, the costs of outsourced payroll services in Portugal are much more advantageous compared to those for an entire department of specialists in the field.
When you want to open a company in Portugal, you can also consider these aspects to be able to make the best choice for your company. In this sense, we recommend our payroll services in Portugal, regardless of the type of company you have. You can benefit from personalized offers, depending on the plans and business direction.
Post-payroll procedures in Portugal
Payroll services do not only mean the calculation of taxes for salaries and the distribution of money in employees’ accounts. However, other procedures come to the attention of a payroll specialist in Portugal:
- Registration of salaries processed and paid in the company. These documents will be used for various reports related to taxes and other rules imposed by the relevant authorities.
- Payroll reporting and compliance are important for the company in Portugal, as a result, a specialist can take care of the procedures involved.
Therefore, if you need the services of a company with experience in accounting and payroll in Portugal, do not hesitate to contact us. We can offer you the necessary support for the company you own in this country.
Is there a 13th salary in Portugal?
Yes, things, in this case, are well established, taking into account the fact that there is a 13th but also a 14th salary in Portugal. Thus, the 13th salary is paid in June, while the 14th is paid in December.
Here are other aspects about salaries, working hours, vacations, and days off:
- The working week is from Monday to Friday, with 40 working hours, respectively 8 per day.
- Overtime is paid in Portugal. For example, for the first 100 overtime hours, the payment reaches 150% salary for the first hour on weekdays, according to the Labor Law in Portugal.
- In Portugal, 22 days of leave are paid for an employee in a year.
- There are 13 national holidays in Portugal, but there are also local holidays. Workers are entitled to time off on these days.
- In case of sick leave, the first 3 days are paid by the employer, following which the remaining medical days are covered by social security in Portugal.
- Portugal offers 100% maternity leave, i.e., the full salary, for 120 days.
- The common benefits in Portugal are: private health insurance, private pension, bonuses, transportation allowance, etc.
About employment contracts in Portugal and support from our payroll specialists
An employment contract in Portugal can be drawn up for a fixed or indefinite period, with a fixed term, full-time or part-time, depending on the project. Internship and temporary employment agreements are also accepted in Portugal. It is worth noting that 90 days is the standard probation period in Portugal, and 180 days for top positions in the company (managers, directors, etc.). With the help of our payroll specialists in Portugal, you can register new employees with the relevant authorities. In this case, the registration must be done 24 hours before the start of the employment agreement. The procedure is simple in this case because payroll specialists in Portugal can do this registration online, except in the case of foreign employees who are working for the first time in this country and for whom it is first necessary to obtain a social security number.
Moreover, employers in Portugal must have occupational accident insurance for their employees and be registered with the compensation fund before the employee’s first day of work. It is worth noting that in Portugal, young people between the ages of 18 and 26 are partially exempt from the income tax rate if their annual income does not exceed EUR 25,075. Basically, the income tax is reduced by up to 30% in the first years at work and by 10% in the last year, respectively, when they turn 26.
Our payroll specialists in Portugal can tell you more about employment contracts and employment in a company in this country. You can work with us and benefit from a good start in business, with the help of our personalized services.
About maternity and paternity leave in Portugal
The initial parental leave in Portugal is 180 days. In this case, the mother can benefit from 30 days before the birth of the child and 6 weeks after the event. There are two options in this case: either 120 days of maternity leave fully paid or 150 days paid at 80% of the salary. As for paternity leave, fathers can stay home with the newborn for 20 days, fully paid, with the possibility of optionally extending it for another 5 days. However, both parents can opt for another 90 days of maternity and paternity leave, but with partial pay. You can find out more about the rights and benefits of parents in Portugal by contacting our payroll specialists.
The minimum wage in Portugal
According to the latest data, the minimum wage in Portugal is set at EUR 870 per month, but there are variations for the autonomous regions. Thus, in Madeira, the minimum wage is around EUR 915 per month. In the Azores Islands, another autonomous region, the minimum wage reaches somewhere around EUR 913.50 per month.
We assist international clients in company formation in Portugal. All the procedures for setting up a company in Portugal can be managed in a fast and reliable manner. Plus, investors can benefit from payroll services in Portugal right from the start, therefore, they can get in touch with our team as soon as a business decision is made. We are here to provide you with all the information about Portuguese payroll taxes.