Portugal
Regulations for Working in Portugal
Overview
Portugal is an attractive location for many companies – whether for temporary project work, remote work under the southern sun, or traditional assignments abroad. However, even in this popular EU country, specific regulations apply when employees are working there. Those who want to avoid tax risks, social security pitfalls, or labor law conflicts should familiarize themselves with the Portuguese requirements early on.
We provide you with a clear, practical, and up-to-date overview of the obligations involved in postings, business trips, and workations in Portugal.
EU Posted Workers Directive
Required Documents
The following documents must be retained and made available to the Portuguese authorities upon request:
- Employment contract / written document outlining the working conditions
- Documentation of remuneration, including proof of payment
- Records of working hours, specifying the start, end, and duration of daily working time
Foreign employers must keep the above-listed documents for one year after the end of the posting.
Contact Person in Portugal
The foreign employer must designate a contact person in Portugal who stores the relevant documents related to the posting and communicates on behalf of the foreign employer with the Portuguese authorities and, if necessary, with social partners regarding collective bargaining.
If foreign employers fail to notify the authorities of the posting, if the information in the posting notification is incorrect or incomplete, or if the receiving entity fails to conduct proper checks on the foreign employer, an administrative fine of up to EUR 9,690 per posted employee may be imposed.
If the posting is not reported to the authorities via the specified email address, foreign employers may face a fine of up to EUR 1,530 per posted employee.
Labor Law
Minimum wage
As of 2025, the minimum wage in Portugal is set at EUR 1,015 per month. This minimum wage applies regardless of profession, industry, or age. It applies to all employees.
There are no universally binding collective agreements.
Working Hours
Standard working hours are 8 hours per day / 40 hours per week.
Non-compliance with local labor law may result in financial liabilities, fines, or claims under local termination and working time regulations.
Social Security
For workers posted from an EU country, EU Regulation 883/2004 applies.
- With a valid A1 Certificate: the employee remains covered under their home country’s social security system
- Without an A1: Portuguese social security rules apply, and the foreign employer must act like a Portuguese employer
The consequences of a violation may include extensive administrative obligations, back contributions (interest), increased audit costs and severe sanctions. In addition, significant reputation damage can occur in this context.
Imcome Tax
There is no minimum period during which a posted employee is exempt from paying tax on their employment income in Portugal.
- Posted employees who are not tax residents in Portugal and whose income is taxable in Portugal under a double taxation agreement must pay tax in Portugal on Portuguese-sourced income.
- Posted employees are also required to file a tax return in Portugal.
- If the foreign employer does not have a permanent establishment in Portugal, they are technically not required to run Portuguese payroll for the purpose of withholding income tax.
Additional Information
Foreign employers and host companies are jointly responsible for providing appropriate and adequate remuneration to posted employees.
The consequences of non-compliance can vary depending on the situation, but there is often an immediate obligation to submit a tax return in the destination country, which can result in further, extensive consequences for the employees and the company.
Immigration & Visas
International activities require exact compliance with international visa and entry requirements. The traveler, the type of activity, the purpose of stay and the duration are decisive for this, whether a business visa, a work visa or other special permits are required.
The consequences in case of infringement may include entry bans and associated loss of revenue, sanctions, fines and reputation damage.
Permanent Establishment
Employees working abroad can establish a permanent establishment through their activities in the target country and thus trigger a chain of financial and administrative consequences for companies.
The consequences of a violation may vary depending on the situation, but each establishment entails a significant administrative burden. In addition to registration, profit allocation and filing of the corporate income tax return, income tax obligations usually also arise.
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