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Payroll in PtPortugal.






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Euro (€) (EUR)

Portugal has experienced a fair share of economic changes throughout the years, but the nation is currently growing in the tourism, agriculture, and energy industries. Companies can capitalize on growth opportunities by tapping into Portugal’s large talent pool of skilled workers. However, you must first set up compliant payroll before onboarding new hires. There are multiple Portugal payroll options, and G-P is here to help you make an informed decision.

Taxation rules in Portugal

Taxation rules in Portugal differ for employees and employers. All employees contribute 11% of their salary each month to social security coverage. Employers match it with 23.75%. The country uses a progressive income tax system, and employees are subject to a higher percentage as their salary increases, ranging from 0% to around 41%.

Portugal payroll options for companies

Companies have 3 main options for establishing payroll in Portugal:

  • Internal: Larger companies committed to keeping a long-term presence in Portugal can run payroll directly out of their subsidiary. This is the most expensive option and requires hiring an HR team to manage operations.
  • Portugal payroll processing company: Businesses that do not want to establish their own Portugal payroll can outsource with a local Portugal payroll processing company. However, the parent company is still liable for all matters of compliance if they choose this option.
  • Partner with an Employer of Record: The easiest way to run a Portugal payroll and stay compliant is through an Employer of Record like G-P. With us, you can rest assured that all employees will be paid on time, freeing you to focus on other important aspects of your business.

How to establish payroll in Portugal

To establish your Portugal payroll, you’ll first need to establish a subsidiary or find a subsidiary alternative. Then you must register with the country’s Tax Authority and Social Security. Many of the steps require a power of attorney, and it can take up to 30 days to fully incorporate. You will also need an in-country bank account to pay employees. Luckily, companies can bypass this lengthy process by partnering with G-P. Through our established Portugal subsidiary, companies can begin recruiting and paying workers in minutes, not months.

Entitlement and termination terms

The best way to hire employees is to draft a strong, written employment contract that outlines specific entitlement and termination terms. Since probationary periods are common in Portugal, it is vital to mention this period’s length as well as the number of days it can extend. Typically, termination notice depends on how many years an employee has worked for the company. Employees are entitled to severance pay if they are terminated for objective reasons.

Streamline global payroll management with G-P.

G-P streamlines each step of the payroll management process with our market-leading Global Growth Platform™. Pay your team with confidence anywhere in the world in 150 currencies with our 99% on-time automated payroll system — all with just a few clicks. Our products also integrate with leading HCM solutions, syncing employee payroll data across platforms automatically to create one reliable, convenient source of truth for HR teams.

Contact us to learn more about how we can support you.


THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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