Hiring in Portugal

The terms set out role, salary in EUR, working time, leave, notice and any restrictive covenants. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Contracts are normally issued in Portuguese, often with an English version alongside.

Fixed-term contracts are permitted only for a genuine temporary need and are capped at two years including renewals, so most EORs default to indefinite terms.

Set probation in writing from day one. If the contract does not state the probation period, it is treated as waived, and the statutory maximums can be shortened but not extended.

Probation is the only window in which the contract can end without a statutory ground. Ask how the EOR handles it before you agree a start date.

Overtime on working days is paid at a 25% premium for the first hour and 37.5% after that, rising to 50% and 75% once annual overtime passes 100 hours. The annual cap is 150 or 175 hours, depending on the size of the employing entity.

Senior hires are often placed on an exemption from working hours (isenção de horário), which needs a written agreement and normally a pay supplement. Put the position in writing either way.

Market practice for professional roles is 22 to 25 days, so the statutory floor is close to what candidates expect. Carnival and a municipal holiday are commonly granted on top of the national holidays.

Sick pay comes from social security from the fourth day of absence, with the first three days unpaid unless the contract says otherwise. Parental leave is also state funded, so confirm whether the EOR tops up pay.

There is no termination at will. Dismissal is only lawful for just cause, extinction of the role, collective dismissal or unsuitability, each with a formal procedure, and an unlawful dismissal can lead to reinstatement.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, unused leave and the proportional holiday and Christmas subsidies. In practice, most exits are agreed by mutual termination with a negotiated payment.

A meal allowance, private medical cover and group life are standard for professional roles even though they are not mandatory.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Employer social security adds 24.75% on top of gross salary. That is before accident insurance and the EOR fee.

The 14-payment structure is the trap. Holiday and Christmas subsidies are each worth a month's pay, so divide an annual salary by 14, not 12, when you set the monthly figure, and budget employer contributions on both subsidies.

Ask whether the EOR's own entity issues the contract for the visa or refers to a partner. Fast-track routes such as the Tech Visa depend on the employer's certification, which an EOR entity may not hold, and the in-country route without a visa has closed.

Set start dates after the visa is issued, not before.

Get the data processing terms in the service agreement, not just the privacy notice. Transfers outside the EEA need an adequacy decision or standard contractual clauses, and Portuguese law restricts remote monitoring of employees.

Ask where payroll data is hosted and who in the partner chain can see it.

Incorporation here is quick, with same-day company formation available, but the running cost is the point: a certified accountant, monthly payroll and social security filings, a statutory audit above size thresholds and payroll software set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.