Payroll in Portugal - Complete Services for Companies

Are you interested in payroll services in Portugal? Please explore this article for useful information and then access our free case evaluation page and send your inquiries. Our Portuguese payroll specialist is ready to provide you with support and details.

Quick Facts
Payroll definition	Payroll refers to a list of people employed by a company and their salaries paid every month.
Frequency of payroll in Portugal	Monthly
Employer social security contributions	23.75%
Employee social security contributions	11%
Minimum wage	920 euros/ month (2026, mainland)
Working hours	Standard 40 hours per week, 8 hours per day
Overtime regulations	If you work extra hours in Portugal, here's how you get paid for the first 100 hours: – On weekdays (Monday to Friday), the first extra hour earns you 125% of your usual pay; – Any additional hours on weekdays give you 137.5% of your regular salary; – On weekends and public holidays, all extra hours are paid at 150% of your usual salary.
Benefits	– Meal vouchers; – Transportation allowance; – Private health insurance; – Bonus; – Additional leave
Mandatory leaves/ days off	Annual leave, public holidays, sick leave entitlements
Paid leaves	In Portugal, your employment contract guarantees a minimum of 22 paid vacation days per year after completing one year of service, in addition to public holidays.
Regulations	Payroll in Portugal is regulated by the Labour and Employment Law.
Termination notice period	Notice periods are set by the Labour Code. For dismissal on objective grounds (collective dismissal, job extinction), the employer must give: 15 days (less than 1 year of service); 30 days (1 to 5 years); 60 days (5 to 10 years); 75 days (10 years or more). An employee who resigns must give 30 days' notice (up to 2 years of service) or 60 days' notice (more than 2 years).
Compensation	For the expiry of fixed-term contracts, compensation is equivalent to 24 days of base salary for each year of service.
Compliance with labor laws	Adherence to labor laws and regulations is mandatory.
Language of documents	Payroll documents are often written in Portuguese. If you need services in English regarding payroll in Portugal, we can assist you.

What is payroll and why is it mandatory for companies in Portugal?

Payroll is a specific process through which employees’ salaries are calculated & distributed. All companies in Portugal need to implement the payroll system from the start.

What are the key payroll services available at your firm in Portugal?

calculating & processing payroll,
managing tax filings,
handling employee benefits
HR support, and many more.

You can also explore the following infographic:

How is payroll done in Portugal?

our Portuguese payroll specialist has access to the company employee list,
the salary taxes are calculated and paid when payroll starts,
once the salaries are executed, payslips are issued,
all documents are then sent to the company management for signature,
salary payment & distribution are next.

NOTE: Wage calculations involve benefits, leaves, bonuses, etc.

What is a payslip?

A document containing individual tax breakdowns, processed by our payroll specialists in Portugal.

What is the system used by payroll specialists in Portugal?

Payroll specialists in Portugal use domestic software for payroll.

What are the payroll taxes in Portugal?

23.75% for social security – paid by the employer,
11% for social security – paid by the employee,
1%-2% as work accident insurance – paid by the employer,
12.5% – 48% progressive income tax paid by the employee.

How is payroll executed in Portugal?

Each month.

Where is payroll registered in Portugal?

At the Social Security Institute – Segurança Social in Portugal.

Is family allowance available in Portugal?

Yes.

What is the salary system in Portugal?

In Portugal, companies pay 14 salaries annually.

What is the Work Compensation Fund – FCT in Portugal?

A monthly contribution of 1% made by the employers/hiring companies for each employee to this fund – no longer due: FCT contributions ended in May 2023 (fund closed to new contributions from 2024) and FGCT contributions are suspended until the end of 2026.

Are there any specific payroll requirements in Portugal?

payroll specialists must respect the Portuguese Labor Code, referring to minimum wage, tax identification in case of foreign workers, allowances, bonuses,
not complying with the Portuguese Tax Authority & Social Security as a company owner leads to serious penalties.

What is the working week in Portugal?

Up to 40 hours/week (maximum normal working time).

Would you like to explore more about the payroll services we offer to companies in Portugal? You can reach out to our Portuguese accountants. Please contact us and ask for personalized offers and in-depth payroll services.