Portugal

HR and HR Software Guide

Country Overview

Portugal, a key nation of the Iberian Peninsula, went through a lean patch between 2005 and 2013, which made the country’s GDP dip to be one of the lowest among other European nations. However, beginning from 2013, Portugal has bounced back steadily and with stable growth rates achieved during the last 5 years, the GDP is expected to touch $225 billion by 2020. The country has a predominantly service-based economy, which mainly revolves around exporting clothing, footwear, chemicals, machinery, and paper products.

Currency: Euro

Principal Language: Portuguese

Government: Representative Democracy

Capital City: Lisbon

Major Provinces: Alentejo, Algarve, Beira, Douro Litoral, Estremadura, Minho, Ribatejo, Trás-os-Montes

A standard workweek in Portugal is typically 40 hours in 5 workdays with 8 hours a day. Although the 2009 Labor Code emphasizes that employers have some flexibility in extending or reducing the workday under certain circumstances.

Employees are entitled to a minimum 1 rest day per week. Sunday is the default rest day, but another can be substituted when business circumstances arise. Employees’ work hours must not be more than 5 hours without a rest break. The rest break must be a minimum of 1 hour and a maximum of 2 hours. Employees must get a resting period of at least 11 consecutive hours between two consecutive daily working periods.

Employees get at least 22 days of guaranteed paid leave in a calendar year. New employees with a service of 6 months get 2 working days’ leave for each month of work during their year of hire. In addition to their usual pay for the period of vacation, employees get an equal amount as a vacation allowance. Employers must provide new hires with 2 days of paid leave for every month worked for the initial year of their contract. Employees may take this leave after 6 months of work.

Unused vacation may be carried forward to April 30 of the subsequent year. Any annual leave of more than 20 days may be exchanged for cash. Determination of annual leave schedule is through an agreement between employer and employee. The leaves can be broken down into periods of no less than 10 days.

Holidays
Employees get the following 9 paid public holidays:

  • Jan. 1: New Year’s Day
  • Good Friday
  • Easter Sunday
  • April 25: Liberation Day
  • May 1: Labor Day
  • June 10: Portugal Day
  • Aug. 15: Assumption Day
  • Dec. 8: Immaculate Conception Day
  • Dec. 25: Christmas

These are 9 mandatory holidays, but the autonomous regions may have to add to this list. Municipalities in the country may designate other holidays. Observance of holidays is always on the day they fall. Law entitles employees who work on public holidays to a 50% higher remuneration.

Mandatory social security contributions are equal to 34.25% of an employee’s gross income, out of which the 23.75% contributed by the employer and the balance 11% by the employee. From the total social security fund, 20.21% goes towards providing old-age benefits, 4.29% is allocated as disability benefits, whereas survivor benefits account for 2.44%. The remainder of social security contribution funds sick leave, maternity/paternity leave, unemployment and family benefits, and workers’ compensation.

Statutory Benefits

  • Maternity Leave
  • Paternity Leave
  • Surrogacy Leave
  • Adoption Leave
  • Caregiver’s Leave
  • Health Insurance
  • Unemployment Benefits
  • Pension Benefits

Simplify workforce management in Portugal with Mihi HR Software.

  • Accelerate employee onboarding with established workflows and guided processes that allow your new employees to hit the ground running from day one.
  • Improve employee time tracking and leave management while ensuring compliance with local labor laws and work-time regulations.
  • Store, manage, and track employee data on a single, secure system. Improve access and visibility, while built-in guidelines help you maintain legal compliance and audit readiness.
  • Turn workforce data into actionable insights with extensive HR reporting and analytics. Make better, more informed decisions and accurately assess the status of your global teams.
  • Provide your employees with the support they need with 24/7 access to our Employee Helpdesk.
  • One HR software for your global needs
  • Ensured compliance with in-country employment and labor laws
  • Connectivity and integrations with ERP and Payroll systems
  • Better workforce data and increased visibility of global teams
  • Supporting 170+ countries and localized in 17+ languages
  • Improved employee experience with employee self-service functionality and 24/7 employee support

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