Want to enhance your team with talent from Portugal? You’re one of many global employers that dare to think outside the box. Portuguese workers are highly sought after among international employers looking to hire skilled workers in a cost-effective way. 

It’s safe to assume that you’re here to learn about Portuguese employee benefits. Compared to some countries, Portugal labor laws are on the more complicated side. They include mandatory leave, insurance schemes, collective bargaining agreements, etc.  

But don’t worry – in this guide, we’ll touch on all the pertinent information regarding employee benefits in Portugal so that you can create a benefit plan likely to reel in the right candidates and keep you on the right side of Portuguese law. 

Portugal Labor Laws for Global Employers

To learn about Portugal’s labor laws from the source, go to the official Portugal Government website- Republica Portugesa – XXI Governo Constitucional.

The Diario da Republica is another reliable source of information for those looking for Portuguese law information.

Also, we recommend checking out the full text of the Labor Code of 2009, the most recent law governing the employer/ employee relationship in Portugal. We reference these resources and more to bring you the information you need to know as an international employer.

Mandatory Employee Benefits in Portugal

Let’s get into the non-negotiable benefits you must include in your benefits plan for Portugal workers.

Parental Leaves

Under Portuguese law, there are several leaves, absences, and holidays that employers must allow their Portuguese employees. They include the following:

  • Childbirth Leave: The mother and father of a new child can take an initial leave of 120 to 150 consecutive days. The mother can take up to 30 days before the birth and must take 6 weeks after the birth. The labor code goes into childbirth leave in much more detail, and there are many situations where the legally obligated leave exceeds these numeric values.
  • Adoption Leave: The amount of time a Portuguese mother can take off for adoption leave is identical to that of a woman taking general childbirth leave. They get an additional 30 days for each adopted child beyond the first. You can find more information on adoption leave in Article 44 of the Labor Code 2009.
  • Leave for the Assistance of a Disabled Child: The employee could get anywhere from 6 months to 4 years of leave. The leave starts at 6 months but can be extended quite a bit if necessary.
  • Pregnancy Termination Allowance: If an employee’s pregnancy must end for a certified reason, they can receive funds covering up to 14 to 30 days of lost work, depending on the advice of a medical professional
Leave Type Duration/Details
Childbirth Leave Childbirth leave lasts 120 or 150 consecutive days. The mother may take up to 30 days before the birth, and six weeks after the birth are mandatory.
Adoption Leave Adoption leave follows the same duration as childbirth leave, with an additional 30 days granted for each child adopted beyond one.
Leave for Assistance of Disabled Child This leave begins with an initial six-month period and may be extended for up to four years or longer, depending on the child’s needs.
Pregnancy Termination Allowance This allowance covers between 14 and 30 days of lost work, based on medical advice.

The law clearly outlines how much time a Portuguese employee should have off for vacation. The employer must allow at least 22 days off for vacation. You and your employee will select the days during the drafting of the employee agreement.

In addition to vacation allowance, the employee should also receive Christmas Day and a holiday allowance (a set amount of money paid monthly to the employee).

Social Security Contributions

Just like in other countries, there are social security contributions that employees in Portugal are expected to be enrolled in. Sometimes, these Social Security accounts are funded by the Portuguese government. In other cases, they are funded by the employer.

Here are the main Social Security contributions international employers should be concerned about: 

  • Pension: Portuguese’s Ministry of Labor has enacted laws concerning pensions in the country. Employees should contribute 11% of each paycheck to their social security tax. Employers must allocate much more – 26.5% of an employee’s pay. This is steep when compared to regulations in some other countries.
  • Workers’ Compensation: Although Portuguese people have access to many provisions as part of their social security benefits, they are still entitled to workers’ compensation should they become injured on the job. If you’re found not to have this insurance option available to your employee, you could be on the hook for claims responsibility in the event that your employee or their dependents have a workers’ compensation claim.

    The amount of money you’ll need to contribute to workers’ compensation varies based on factors like location and industry.

Work Hours and Night Work Pay

If an employee agrees to work the night shift, they are entitled to 125% of their wages. Please note that a lawful workday for Portuguese employees is no more than 8 hours a day and no more than 40 hours per week. Employers who have their employees working outside of these hours could be hit with a serious administrative offense.

Mandatory Training

A provision surrounding mandatory training is incredibly rare in general. But if you hire an employee from Portugal, you’ll have to offer at least 40 hours of yearly training to foster professional growth. Either you can set up on-site or online training for your employees, or you can allow them to expand their skill set outside of the company. The key here is that the training must happen during work hours. This provision is only for full-time employees. 

Collective Employee Representation

Under Portuguese law, employees can assemble themselves into a union of sorts to push their personal interests and rights. This may look like an Employee Committee in your organization. Any employee can participate in the committee. 

There is no obligatory private health insurance requirement for employers. The government provides basic health insurance for their workers (through the Portuguese social security system). 

Supplementary Benefits in Portugal

After doing all the leg work with the mandatory benefits, it’s critical to look into supplementary benefits to strengthen your Portuguese employee benefits package. That is, if you have the resources to do so.

Here are some of the main supplementary benefits that employers tend to offer their Portuguese employees: 

  • Private health insurance to fill any gaps left behind by Portuguese public health insurance
  • Gift cards and allowances for food
  • Extra time off (paid or unpaid)
  • Allowances for fitness and wellness

How To Build an Employee Benefits Plan for Workers in Portugal

With the information above, you can start building your employee benefits plan for Portuguese workers. But how do you go all about it? Here’s a warning- there are lots of steps involved. Still, if you can systematically complete them, you can construct a benefit plan that abides by all the relevant regulations and laws and piques the interest of the candidates you’re looking for. Here are some steps to follow to craft a winning employee benefits plan: 

  • Ensure that all the mandatory bases are covered first – Be sure to allow the correct number of days of maternity leave and vacation, and fund any applicable Social Security benefits (among other things). You want to stay far away from compliance-related penalties. 
  • Look into Portuguese companies in your industry – What benefits are they offering their employees? Are they giving extended benefits or sticking to the minimum mandatory requirements? 
  • Take a good, long look at your budget – Can you afford the mandatory benefits laid out by the Portuguese government? How much, if any, money is left over for supplementary benefits to sweeten the deal for your candidates? 
  • Compile all the employee benefits information into an easy-to-read document – Whether it be an online document or a paper copy. Stay away from excessively legal jargon – you want any employee to be able to quickly decipher what the benefits are and if they could be beneficial.
  • Make regular updates to your employee benefits plan – As time goes on and regulations change, the mandatory benefits may no longer work for your Portuguese employees. On top of that, supplementary benefits may not hold the same appeal over time. Don’t be afraid to update the plan to ensure it’s current, relevant, and appealing to your candidates.

Resources to Consider as You Build Your Benefit Plan

Before you get started with your employee benefits plan for workers in Portugal, it’s important to know that you don’t have to drown in the process. There is help available for international companies looking to break into the Portuguese labor market. Here are some resources to consider: 

  • Professional Employer Organizations (PEOs) – They handle HR functions for companies looking to operate in various countries. They typically handle benefits management, benefit application, compliance, payroll, and more. You remain the legal employer when working with a professional employer organization.
  • Employers of Record (EORs) – These professionals become the legal employers of your Portuguese employees. They handle everything that an employer must contend with, from employment contracts to taxes to compliance to benefit creation and administration, and the list goes on and on.
  • Legal advice from an attorney with experience in international labor law. 
  • Human resources companies and individuals. 
  • A tax professional with experience navigating international laws.  

If you can find someone with experience in Portuguese labor law, you’re more likely to be in good hands. 

So, there you have it – everything you need to know about employee benefits in Portugal. We hope you found the information you were looking for and feel empowered to reach out to workers in this great country.