Written and fact-checked by the EORquotes research team · Data verified July 2026
Hiring an employee in Portugal costs significantly more than their gross salary. This calculator itemizes every mandatory employer contribution so you can budget an offer accurately — before you talk to an EOR provider.
How much does it cost to hire an employee in Portugal? Employing someone in Portugal costs roughly 25.25% above their gross salary in mandatory employer contributions. A 2,300 EUR per month hire costs about 3,361 EUR per month all-in — 40,330 EUR per year across 14 salary payments.
Cost of hiring in Portugal: key facts (2026)
- Employer contributions add about 25.25% on top of gross salary — a 2,300 EUR/month hire costs roughly 3,361 EUR per month all-in.
- Salary is paid 14 times a year, not 12 — a mandatory extra that raises the annual cost.
- The 2026 minimum wage is 920 EUR/month (14 payments).
- Statutory paid leave is 22 days plus 13 public holidays, on a 40-hour week.
Hiring in Portugal in 2026: what to know
Portugal has become one of Europe’s busiest remote-hiring markets: strong English proficiency, a deep tech talent pool around Lisbon and Porto, and salaries well below Western European averages for comparable roles. That combination keeps demand high — and it means good candidates move fast.
The trade-off is a rigid labour framework. Permanent contracts are the default, dismissal is procedurally demanding, and collective agreements can layer extra obligations on top of the Labour Code. Budgeting a hire correctly from the start matters, because unwinding a mis-scoped contract in Portugal is slow and expensive.
For 2026 the national minimum wage rose to 920 EUR per month (paid 14 times a year), and FGCT wage-fund contributions remain suspended through the end of the year. Portugal’s successor to the old NHR expat tax regime — the IFICI incentive, often called NHR 2.0 — continues to attract qualifying foreign professionals, which is relevant if you are relocating staff rather than hiring locally.
This page focuses on what a hire costs. For the full employment picture — contract types, probation, benefits, termination — see our Portugal EOR country guide.
Calculate the true cost of an employee in Portugal
How this calculator works: contributions are computed on the annual gross salary
(14 payments per year), rate ranges use the midpoint, and every rate is cited
in the sources at the bottom of this page.
What a hire in Portugal actually costs: worked examples
Example: a minimum-wage hire (920 EUR/month)
Employing a minimum-wage hire (920 EUR/month) in Portugal costs 16,132 EUR per year — an effective 1,344 EUR per calendar month, about 46% more than the monthly gross written in the contract.
| Annual gross (14 payments) | 12,880 EUR |
| Social security (TSU) (23.75%) | 3,059 EUR |
| Work accident insurance (1.0–2.0%, midpoint used) | 193 EUR |
| Wage guarantee fund FGCT (contributions suspended through 2026) (0.0%) | 0 EUR |
| Total annual employer cost | 16,132 EUR |
| Effective monthly cost | 1,344 EUR |
Example: a typical professional hire (2,300 EUR/month)
Employing a typical professional hire (2,300 EUR/month) in Portugal costs 40,330 EUR per year — an effective 3,361 EUR per calendar month, about 46% more than the monthly gross written in the contract.
| Annual gross (14 payments) | 32,200 EUR |
| Social security (TSU) (23.75%) | 7,648 EUR |
| Work accident insurance (1.0–2.0%, midpoint used) | 483 EUR |
| Wage guarantee fund FGCT (contributions suspended through 2026) (0.0%) | 0 EUR |
| Total annual employer cost | 40,330 EUR |
| Effective monthly cost | 3,361 EUR |
Where the money goes
At a typical 2,300 EUR/month salary, this is how the annual cost of employing someone in Portugal divides between take-home pay and the mandatory contributions on top:
- Annual gross (14 payments) — 32,200 EUR (79.8%)
- Social security (TSU) (23.75%) — 7,648 EUR (19.0%)
- Work accident insurance (1.0–2.0%, midpoint used) — 483 EUR (1.2%)
Skip the paperwork. An EOR employs your Portugal hire through its own local entity — payroll, contributions, insurance and compliance handled for a flat monthly fee. Most teams are up and running in days:
What’s behind each employer cost in Portugal
Social security (TSU)
The Taxa Social Única funds state pensions, unemployment protection and sickness benefits. The employer pays 23.75% of gross pay on top of salary; employees contribute a further 11% deducted from their own pay.
Work accident insurance
A mandatory private insurance policy every Portuguese employer must hold. Premiums are risk-rated by occupation — typically around 1–2% of payroll for office roles, higher for physical work.
Wage guarantee fund FGCT (contributions suspended through 2026)
A wage-guarantee fund that protects employees if an employer becomes insolvent. Contributions are officially suspended through the end of 2026, so it currently adds 0% — but budget for its possible return.
What the employee pays in Portugal
Employer contributions are only one side of the ledger. Employees in Portugal pay their own 11% social-security contribution out of gross salary, plus progressive income tax withheld at source — the exact rate depends on income level and personal situation. That is why gross salary, net take-home and total employer cost are three different numbers. This page focuses on the employer side: what a hire actually costs your budget.
Why Portugal pays 14 salaries a year
Mandatory 13th (vacation) and 14th (Christmas) salary payments. In practice: a 2,000 EUR monthly salary in Portugal means 28,000 EUR in annual gross pay (14 × 2,000), and every employer contribution above is calculated on that annual figure — which is why the calculator works on an annual basis before showing you the effective monthly cost.
EOR vs opening your own entity in Portugal
Setting up a Portuguese subsidiary means incorporation, social-security and tax registration, and ongoing local accounting — a realistic lead time of weeks to months, which only pays off at several employees or more. An EOR compresses that to days: the provider already has the entity, payroll and mandatory insurances in place, and you pay a monthly fee per employee instead. The break-even question is headcount and time horizon; for one to five hires, or a market test, an EOR is usually the pragmatic choice. Providers such as Deel and Remote are the usual starting points — or compare quotes from several at once.
Key employment facts for Portugal
Beyond the payroll numbers, these statutory rules shape what a Portugal hire costs and how the relationship works day to day:
| Working hours | 40 hours/week |
| Paid annual leave | 22 days |
| Public holidays | 13 |
| Maximum probation | 8 months |
| Notice period | 15–75 days depending on tenure |
| Severance | 12–18 days of pay per year of service (regime dependent) |
Hire in Portugal without an entity
We match you with vetted EOR providers for Portugal — free, in one request:
Get free Portugal EOR quotes →
Or go direct to a provider covering Portugal:
Frequently asked questions
How much does it cost to employ someone in Portugal?
On top of gross salary, employers in Portugal pay roughly 25.25% in mandatory contributions (Social security (TSU), Work accident insurance, Wage guarantee fund FGCT (contributions suspended through 2026)), and salary is paid 14 times per year rather than 12, which raises the annual base the contributions apply to. Concretely: even a minimum-wage hire (920 EUR/month) costs about 16,132 EUR per year all-in. Use the calculator above for an itemized total at your exact salary level.
What payroll taxes do employers pay in Portugal?
Social security (TSU) (23.75%). Work accident insurance (1.0–2.0%, midpoint used). Wage guarantee fund FGCT (contributions suspended through 2026) (0.0%). The biggest single item is Social security (TSU) at 23.75% — see the plain-language breakdown of each contribution earlier on this page for what it funds and who pays what.
How many salary payments per year are required in Portugal?
14. Mandatory 13th (vacation) and 14th (Christmas) salary payments. When budgeting, multiply the monthly salary by 14, not 12: a 2,000 EUR contract is 28,000 EUR a year in gross pay before any employer contributions.
What is the minimum wage in Portugal?
920 EUR per month, paid 14 times per year — 12,880 EUR annually in gross terms. Employer contributions come on top of that; see the minimum-wage worked example above for the true all-in cost.
Can I hire in Portugal without opening a local company?
Yes — that is exactly what an Employer of Record does. The EOR already operates a legal entity in Portugal: it employs your hire on your behalf, runs compliant payroll including the full ~25.25% of employer contributions, and sends you one monthly invoice. You direct the day-to-day work; the EOR carries the legal employment relationship.
How fast can I hire in Portugal through an EOR?
Typically days rather than months. The slow parts of employing in Portugal — entity setup, social-security and tax registrations, mandatory insurances — already exist on the EOR’s side. In practice your timeline is usually the candidate’s own notice period with their current employer (notice periods in Portugal run 15–75 days depending on tenure).
What does an EOR service cost in Portugal?
Providers charge a flat monthly fee per employee on top of the statutory employment costs shown in the calculator above — the statutory costs are the same whoever you pick, but the fee is not. The same Portugal hire can be priced very differently across providers, which is why comparing several quotes at once pays for itself.
What is the notice period and probation limit in Portugal?
Probation runs up to 8 months, and statutory notice is 15–75 days depending on tenure. Getting these right in the contract from day one matters — an EOR applies the correct local terms automatically, which is where compliance risk usually hides.
How is severance calculated in Portugal?
12–18 days of pay per year of service (regime dependent). Because severance exposure grows with tenure, it is worth understanding before you make an offer — the calculator above covers ongoing cost, while severance is a separate end-of-employment liability.
How many paid leave days are mandatory in Portugal?
Employees are entitled to 22 days of paid annual leave plus 13 public holidays, on a 40-hour working week. Paid leave is part of the true cost of a hire even though it does not show as a payroll contribution.
Is Portugal a cost-effective place to hire compared with neighbours?
It depends on the role, but the honest comparison is total employer cost, not gross salary — the effective on-cost here is about 25.25%. Use the calculator for your exact salary, then compare against nearby markets from the country index linked below before you commit to a location.
Compare Portugal with other markets
Employer costs swing widely between countries — the same salary can cost far more or less depending on where you hire. See the full employee-cost calculator index for every country, or jump to a neighbour:
Compare EOR providers for Portugal
Knowing the cost is half the decision — the other half is which provider handles your Portugal hires best. These head-to-heads weigh entity model, strengths and pricing approach specifically for Portugal:
- Portugal: Deel vs Multiplier compared
- Multiplier vs Playroll for hiring in Portugal
- compare Deel and Remote in Portugal
- Remote or Oyster for a Portugal hire?
More Portugal resources
Costs are only part of the picture. Our Portugal EOR country guide covers contract types, benefits, termination rules and compliance for Portugal in depth — the questions that come up after the budget is approved.
Sources
Every number on this page traces to an official or authoritative source, checked on the date shown. Spot something outdated? Tell us and we will verify and correct it.
- Employer social security rate (TSU, 23.75%): Segurança Social (accessed 2026-07)
- Work accident insurance range (risk-rated, ~1-2% typical): ASF (insurance regulator) (accessed 2026-07)
- FGCT contribution suspended for duration of Medium-Term Agreement (through 2026-12-31): Fundos de Compensação (accessed 2026-07)
- Minimum wage 2026: EUR 920/month x14 payments: Governo de Portugal (XXV Governo Constitucional) (accessed 2026-07)
- Employee social security rate (11%): Segurança Social (accessed 2026-07)