Global Employment Solutions & PEO in Portugal

Omnipresent provides global employment solutions and professional employment organisation (PEO) services for companies looking to grow and build out a global team in Portugal. Traditional methods of establishing global employment and subsidiaries in Portugal typically take months and can incur heavy costs. Omnipresent’s global employment solutions and PEO services is helping hundreds of organisations onboard new employees in Portugal in a matter of days with full compliance of local labour laws. We use a tech-forward approach to streamline the process. 

• Your company conducts the hiring and candidate selection process in Portugal.
• Omnipresent hires the selected candidate through our local professional employment organisation in Portugal.
• We take care of ensuring your new employee is hired in compliance with local labour laws, payroll regulations, benefits and more -- all without needing to set up a subsidiary in Portugal.
• The individual is legally contracted by Omnipresent but assigned to work for your company and reports to a manager or team in your organisation as your full-time employee.

Employer costs include Social Security Tax and Compensatory Fund Tax. Use the OmniCalculator to estimate costs, or contact us for further information.

Income Taxes

Residents in Portugal for tax purposes are taxed at progressive rates varying from 13.25% to 48% for 2024.

Non-residents are liable to income tax only on Portuguese-source income, which includes not only that portion of remuneration that can be allocated to the activity carried out in Portugal but also remuneration that is paid / borne by a Portuguese company or permanent establishment (PE).

In 2024, an additional solidarity rate, which varies between 2.5% and 5%, applies to taxpayers with a taxable income exceeding EUR 80,000 and EUR 250,000, respectively.

Employee Contributions Social Security 11.00%

Social Security contributions widely vary depending on the type of employer and employee.

For general workers at for-profit organizations, employees are assessed a standard Social Security contribution rate of 11%.

Employees of nonprofit employers are assessed a Social Security contribution rate of 11%..

Domestic workers, agricultural workers, disabled workers and marine employees are subject to different contribution rates.

The employee's social security contribution is collected from their wages. Employees are not able to pay the taxes directly and there is no way for them to opt out of the national system.

Maximum working hours are 8 hours/day and 40 hours/week. Working week is 5 days a week. Overtime is restricted to only limited circumstances and compensated.

Employees cannot opt out of overtime, unless when determined by law.

Paid sick leave is typically paid by the employer for up to 3 days. From day 4, social security sick leave kicks in for up to 1095 days subject to compliance of applicable legal requirements. The government typically pays up to 55%-75% of the employees salary during this time depending on duration of sickness.

Maternity leave: 120 days at full pay, paid by Social Security. Max. 30 days before birth and min. 42 days after birth.

Paternity leave: 20 days at full pay, paid by Social Security.

Parental leave: After the required days of maternity leave (42 days) and paternity leave (20 days), parents can jointly take the remainder of days (120 - 150 days total). Pay will vary between 80-100% depending on days taken, paid by Social Security. Parents may be eligible for other unpaid parental leave.

Minimum paid annual leave is 22 working days per calendar year (excl. PH). Right to leave takes effect as of 1 January each calendar year. During 1st year of employment and after 6 months of service, employees earn 2 days leave per month worked up to a maximum of 20 working days per year.

Carrying over annual leave Holidays can be carried over to 30 April of the following year, if the employer agrees.

ITC: Severance payments will only be mandatory if you dismiss an employee due to their failure to adapt to the job position or due to the extinction of their job position. Calculated depending on seniority and the length of the contract.

Project: Severance payments are mandatory unless the employee is dismissed for disciplinary reasons. Accrues each month and charged as a standard part of the monthly payroll (18 days salary per year worked). Paid to the employee at the expiration of the project. 

In both cases severance will not be payable if the employee is dismissed during their probation period.

ITC: Reasons for termination include termination by mutual agreement, dismissal for disciplinary grounds, dismissal for unsuitability for the job or termination by the employee. Several formal procedures must be followed. Notice periods will vary depending on the term of the contract between 7-60 days minimum. 

Project: Process involves notifying the employee, notifying the Social Security and Tax Authority and filling out an unemployment document. Can be terminated with 7 days notice in the first 6 months, or with 30 days notice between 6 months and 2 years of service.

In both cases termination during the first 60 days of a probation period will not require notice.