Payroll and HR in Portugal

Local Information

Local Time (LIVE):12:07 PM
Local Currency:$1 = €0.9
Business Language(s):English and Portuguese
Tax Year Dates:1st January – 31st December

 

If you are considering expanding your business to Portugal, you’re in good company. Portugal is an attractive place to do business, thanks to English being a widely spoken language and the Portuguese Government’s non-habitual tax regime.

Introduced in 2009, the non-habitual tax regime was created to incentivise high value industries to do business in Portugal. Non-habitual residents in Portugal will benefit from a flat 20% income tax rate if you are a new resident and work in a one of their defined ‘high value’ industries. These include work of a scientific, artistic or technical nature, and the regime lasts for 10 years.

If you’re ready to expand, FMP Global are here to help make sure your business remains compliant with international payroll and HR. Though the tax incentives are good, it doesn’t make payroll and HR management any easier.

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Employer Must-Dos

In Portugal, the following reports must be submitted to strict deadlines.

  • Corporate income tax return
  • VAT Returns

Payroll in Portugal

What tax considerations are there?

The tax system in Portugal is made up of state and local taxes. Portuguese residents are taxed on their worldwide income at varied rates between 14.5% and 48% depending on how much they earn, their expenditure, and property ownership.

Non-residents are taxed only on income they have received from within Portugal. If employees are non-residents, they are taxed at a flat rate of 25% (correct at the time of publish).

If an employee receives a taxable income of more than EUR 80,000 a year, they are also liable to an additional solidarity rate of between 2.5% and 5%.

A flat corporate income tax rate of 21% is applicable for the global amount of taxable income realised by company’s resident in Portugal.

HR in Portugal

What are the regular working hours in Portugal?

In Portugal, the maximum legal working week is 40 hours, with most working days starting at 9am until 7pm with a 2-hour lunch break.

Termination

Employees can have their employment contract terminated due to: dismissal for cause attributable to the employee, collective dismissal, dismissal due to elimination of job, dismissal for inability to adapt, unilateral termination of the contract by the employee without just cause or unilateral termination of the contract by the employee with just cause.

Find out more about International Payroll

For more information and key considerations surrounding international payroll and HR, download our international payroll guide today.

Download Our Guide

FMP’s Portuguese Payroll and HR Solutions

Our Portuguese payroll and HR services are designed to help businesses maintain regulatory compliance and give you the guidance you need. No matter if you’re seeking payroll and HR in Lisbon or Porto, we can help. With a single point of contact, we’re here to help you every step of the way. Our services include:

  • Employment Contracts
  • Payroll Processing
  • Handling of payments (salaries)
  • Annual declarations (lodging, apprenticeship & training taxes for concerned companies)
  • Relations with social bodies
  • Regulatory Compliance
  • Tax and Labor Law Consulting
  • Assisting in payroll audit (or payroll department audit)
  • Handling of confidential payroll
  • Assistance in company restructuring plan
  • Assistance in implementation of procedures
  • Assistance with start-up (in link with lawyers)

Maintain Compliance with Your Portuguese Payroll & HR

Our Portuguese payroll and HR experts are ready to help you take the next step with your business expansion. We can help with compliance, legislation and employment law, allowing you to get on with the important day to day.

Start your International Expansion Today