Portugal's economy has had its share of ups and downs, but it is currently bouncing back and growing in the tourism, agriculture, and energy industries. With a large workforce, your company can...
Read MorePortugal's economy has had its share of ups and downs, but it is currently bouncing back and growing in the tourism, agriculture, and energy industries. With a large workforce, your company can benefit from expanding to Portugal and adding some of this talent to your payroll. However, you must first decide between multiple Portugal payroll options and set up your payroll according to local labor laws.
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Portugal’s economy has had its share of ups and downs, but it is currently bouncing back and growing in the tourism, agriculture, and energy industries. With a large workforce, your company can benefit from expanding to Portugal and adding some of this talent to your payroll. However, you must first decide between multiple Portugal payroll options and set up your payroll according to local labor laws.
Globalization Partners can help. Our Employer of Record solution allows us to hire employees on your behalf and add them to our established PEO and payroll. You do not have to worry about compliance or risk, as we take on the burden for you.
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 tax scheme through which employees owe a higher percentage as their salary increases.
Employers should expect to pay several corporate income taxes (IRCs) at varying rates, including:
Companies have four main options for setting up Portugal payroll:
To set up 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. Or you could work with a global PEO, like Globalization Partners. Through our established subsidiary, you can start hiring and compensating employees right away.
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 were terminated for objective reasons.
If you are ready to expand to Portugal, we can help run your payroll and keep you compliant. Contact us today for more information.
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