Portugal

Overview

Strategically located on the Iberian Peninsula, Portugal offers access to land and sea trade routes. 

With a population of over 10 million, the country boasts a skilled workforce that operates remotely and on-site. 

The country’s strong business infrastructure makes it an affordable and practical choice for tapping into global talent. 

Moreover, language is rarely an issue—many young professionals speak fluent English, making it easier for international employers to connect and collaborate.

Any company wishing to hire employees in Portugal must adhere to its robust labor laws. 

From strict worker protection rights to offering a bonus 13th-month salary, employers might find it difficult to navigate these intricate international laws. 

This is where a Portugal Employer of Record comes in, which will help you from hiring and recruiting to processing payroll and managing employees.

Employer of Record Portugal, or EOR Portugal, is a third-party service that allows a company to hire employees without setting up a legal entity in a country. 

The Portugal Employer of Record will thus act as your legal employer, handling payroll and employee benefits like health insurance, leaves, etc. 

Skuad's Portugal EOR (Employer of Record) solution helps your business expand into Portugal without needing an entity setup. 

Our unified and automated global HR platform enables you to expedite the onboarding of your remote team and compliantly manage their payroll in Portugal, benefits, etc. 

We help you streamline the global expansion process with the assistance of our international network. Book a demo today to learn more about Skuad's effective EOR solutions.

Additionally, Skuad’s employee cost calculator can help—it is an essential tool for businesses. It provides an estimate of the expenses of workforce management in Portugal and other countries.

Portugal at a glance

• Estimated Population: 10,304,434
• Currency: Euro (€)
• Capital: Lisbon
• Languages spoken: Portuguese, Mirandese and English
• GDP: 238.8 Billion USD (2019)

Employment in Portugal

In most cases, employers and businesses in Portugal prefer to hire through referrals, and a lot depends on professional and personal recommendations and relationships. 

Emphasis is given to building trust and relationships, which is why it is a big challenge for foreign companies and business entities to hire the local workforce in Portugal. 

Employment in Portugal is based on a written employment contract wherein all details of the new employee's salary, benefits, compensation, additional compensation, and termination requirements must be mentioned.

Portugal's thriving industries include tourism, hospitality, automotive, electronics, transportation, construction, footwear, and textiles. 

The unemployment rate is 5.6% (June 2020), and youth unemployment is 25.6%. In recent years, there has been an increase in the hiring of foreign workers.

Contact Skuad for more information.

Hiring in Portugal

After your decision to enter Portugal has been taken and well-analyzed, you must work fast to build your team. 

The entire process could be a big challenge because of the intricate nuances, including employment laws, compliance, and hiring. 

Looking at outsourcing the HR functionalities of Skaud, the team-building process can become easy and smooth sailing.

To hire employees in Portugal, you can start by building your international team using your relationships and being present at networking events. 

Alternatively, you can get help from popular online platforms like Indeed, Adecco, Net-Empregos, BonsEmpregos, Expressoemprego, Alertaemprego, and many other hiring companies in Portugal.

The hiring model in Portugal starts by preparing the employment contract in writing. 

The contract contains every last detail about the employment, from compensation and employee health benefits in Portugal to probation and termination. 

Every detail is mentioned in Euros rather than any other foreign currency.

The Collective Bargaining Agreement (CBA) also needs to be covered in the contract. Even though there is no explicit mandate about the onboarding process, the usual method is to prepare an employee code of conduct and ensure training for your employee.

Skuad's Employer of Record Portugal solution seamlessly handles all aspects of hiring and onboarding local Portuguese employees, completely compliant with the local Labor Code, rules, and regulations. To learn more about our work, speak to us today!

Setting up an entity in Portugal

Portugal has well-developed education system is the backbone of its skilled workforce. 

Having a low labor cost, Portugal is a cost-effective destination for a company looking to hire top talent. 

However, hiring workers in Portugal on your own can be difficult, especially when understanding the country's local laws and ensuring compliance. 

The labor market is also competitive, so hiring and retaining top talent can be tricky.

When starting a business in Portugal, it is vital to understand the business climate in the company. 

The Portuguese Companies Code defines the following business types:

• A business owned by a single individual can be subdivided into a solo trader, an Individual Limited Liability Establishment, and a Single-Member Limited Company.
• Businesses owned by two or more people: Private Limited Company or Sociedade por Quotas can have at least two partners with a minimum investment of €5,000.
• Public Limited Company or Sociedade Anomina – requires a minimum of five shareholders and an investment of €50,000.
• Partnership or Sociedade em Nome Colectivo – two partners with personal liabilities.
• Limited Liability Partnership or Sociedade em Comandita – two partners with unlimited liability and sleeping partners with limited liability.

There are enough business opportunities in Portugal. Incorporating a holding company in Portugal has many benefits.

With a ten percent share, the dividend income can be tax-exempt, while the capital gains from the company attract a low tax rate. It is ideal to speak to a specialist on this matter before venturing into Portugal.

Here are the things to make a note of before hiring employees in Portugal:

Pros

• Market access: Once a business establishes its entity in Portugal, it has swift access to the European countries. This enables seamless trade and commerce across member states and operates with flexible Portugal tax rate barriers.
• Favorable tax structure: Portugal's government attracts a lot of foreign investment with its business-friendly tax structure. It has a reduced corporate tax policy in certain areas like Madeira.
• Support for start-ups: Portugal's work culture supports startup businesses, offering them a chance to expand. The government also offers incentives to support innovations. It offers a startup visa program and a resident visa, ideal for aspiring entrepreneurs. 
• An educated and skilled workforce: Portugal's economy is driven by a skilled and educated workforce. English fluency is common among the population, which is advantageous for foreign businesses.

Cons

• Tax complexity: Tax complexities can be a roadblock to foreign businesses operating in Portugal. Understanding them properly, and ensuring compliance often requires professional guidance.
• Bureaucracy: Setting up a business in Portugal means tackling bureaucratic procedures. These are time-consuming and involve various regulations and permit requirements.
• High setup costs: Establishing an entity in Portugal can come with added costs. Companies must bear additional costs in the beginning, such as legal or administrative charges.
• Longer timeline: Setting up an entity in Portugal comes with a longer timeline. It can take up to 12 weeks to complete all registrations and ensure compliance.

If you hire via an EOR, like Skuad, you can easily navigate issues like misunderstanding Portugal tax brackets or employee misclassification. 

Skuad simplifies your business expansion from day one and will help you with hiring in Portugal, tax compliance, and much more.

Employer of Record (EOR)

When you have decided to expand your business in Portugal, the ideal way to start is to partner with a high-caliber EOR like Skuad. 

Its versatile solution supports you through and through in hiring and onboarding the right team for business growth. 

Every foreign land has its sets of challenging laws. When dealing with the workforce, you must ensure that no local law is ignored or bypassed during recruitment, payroll processing, or deducting taxes.

An Employer of a Record offers an end-to-end HR functional solution so that you can focus on your business and expansion and let them handle the labor-related aspects.

Skuad is one of the most promising and experienced employers of record solutions in Portugal. 

It is a high-end EOR platform with a smart and intuitive interface and comprehensive features that can become your go-to platform for expanding not just into Portugal but anywhere on the globe. 

With low costs and customized solutions, Skuad gives you a helping hand 24x7.

‍Learn More

Onboarding & Agreements

What is onboarding

Onboarding is a process or step in recruitment where newly hired employees are integrated into the organization. 

They are made aware of the company's policies, vision, mission, and values. 

It begins even before an employee's first day and includes proper check-ins once they've completed their first work week. 

It gives the new hires a sense of welcome, confidence in their job roles, and an understanding of the company’s expectations.

How to successfully onboard employees in Portugal

Once you hire employees in Portugal, the next step is successful onboarding. 

Here are a few things that ensure an effortless onboarding:

• Pre-onboarding: This stage begins before an employee's first day. The company can send an introductory mail containing the employee's paperwork, tax forms to fill out, credentials for the company's portals, etc.
• Orientation and training: Once the newly hired employees join the company, arrange an orientation session and role-specific training programs. This will clarify the company's goals and expectations from the employees, and a training session will make them accustomed to the required skill sets.
• Assign a mentor or buddy: An office mentor or buddy can help them make connections and conduct proper networking. These mentors may also give the new joiners an office tour to make navigating the workspace easier.
• Focus on team bonding: Good team bonding will help your new joiners feel relaxed during their initial days. The company can organize team lunches or outings to bring a sense of harmony to the team. 
• Follow-up sessions: Once the new joiners have completed their first work week, schedule a follow-up session to understand their experience and concerns.

Types of Employment Agreements in Portugal

An important aspect of Portuguese law is the prohibition of discrimination of gender, age, sex, marital status, family background and situation, religion, origin, genetic heritage, ideological beliefs, economic situation, parentage, trade union affiliation, reduced work capacity, and disabilities.

• Fixed-term: This contract has a limited duration, usually six months. It could be less than this and up to a maximum of three years.
• Contract with unspecified duration: This employment contract is unlimited but not more than six years.
• Very short-duration contract: This type of contract lasts sixty days. It is used during seasonal work, such as agricultural and tourist seasons.
• Part-time contract: Part-time workers do not work more than 75% of the hours a full-time worker works.
• Intermittent contract: There are breaks in this type of work contract wherein employees work intermittently. Employers must offer employees full-time contracts with a minimum of six months and mandatory consecutive employment of four months.

As per Portuguese law, employment contracts must be in writing, except for short-duration contracts.

What details are included in the Employment Contract?

As per laws of employment in Portugal, the employment contract should include:

• Employer's identification
• Employee identification
• Job responsibilities and duties
• Payment terms
• The object of the contract
• Start date and last date of the contract.
• Duration of employment and justification for the same
• Day-to-day work timing
• Job location

Onboarding Checklist

Keep this onboarding checklist with you for hiring employees in Portugal:

• A welcome email, which helps the new employees feel welcome.
• A welcome package, which contains some office merchandise and work supplies.
• Proper paperwork or documentation, like tax documents, contracts, and employment agreements.
• A list of supplies and office equipment to make them get going in their role from their first week.
• A clean and tidy workspace setup.
• A proper mentor or office buddy who makes the new hires feel comfortable during their initial days.

Types of Visas in Portugal

A Portugal work visa gives the opportunity to live and work in a peace-loving country with political and social stability. 

It also gives the right to move freely within the EU, have family members join you in Portugal, and apply for Portuguese residency at the end of five years.

Portugal work visa requirements

Among other things, applicants must submit:

• The completed visa application
• Valid passport
• Letter of invitation from the employer
• Health insurance and accident insurance papers
• One passport-size photo
• Biometric data
• Flight tickets
• Hotel reservation or accommodation proof

Work Permits

For applying for a work permit in Portugal, the following papers are required:

• Valid passport
• Accommodation proof in Portugal
• Valid Portuguese residence visa
• Two passport-size photos
• For Portugal work permits for foreigners, it is pertinent to submit tax documents
• Police verification certificate for background checks
• Employment contract
• Social Security registration documents

It is impossible to have a Portugal work permit without a job offer because the employer needs to apply for the work permit, which they do after offering the job.

Taxes

Here’s what you need to know about Portugal's tax brackets:

Employer tax obligations

The tax percentages under different sub-heads in Portugal are as follows:

Portugal Income tax rate slabs for employees

Understand the Portuguese income tax rate slabs for your employees:

Social security contributions

The social security contributions in Portugal cover benefits like pensions, unemployment, and family allowances. 

• The employer has to deduct 11% of the employee's salary as a contribution towards social security funds. 
• The employers have to contribute 23.75% of the employee’s salary to this fund.

Employee tax deductions

The tax percentages for employees under different sub-heads in Portugal are as follows:

VAT

Currently, VAT in Portugal doesn’t apply to businesses hiring employees in Portugal.

Compliance

Legal landscape (Employment laws)

Here are a few details of the Portugal labor laws:

Employee/Contractor classification

According to the Portuguese Labor Code, an employee is committed to offering intellectual or manual activities for an employer, company, individual, or organization. 

An independent contractor undertakes a project or renders a certain kind of manual or intellectual work but is not under any legal subordination of the beneficiary.

In the case of employees, the employer has legal subordination in the following gamut that is determined by the employment contract law in Portugal:

• Fixing the working time
• Fixing work or job description
• Fixing the location
• Providing the required working tools
• Paying the employee regularly as per the employment contract in Portugal
• Determining the performance of the employee
• Integrating the employee in the work environment.
• In the case of a contractor, the beneficiary is responsible for making timely payments to the contractual worker and integrating them within the work environment.

The difference between contractors and employees also lies in the tax treatment. 

Social Security contributions are paid by the employee (23.75%) and the employer (11%) in the case of an employee, as per the employment agreement in Portugal. 

In the case of a contractor, social security contributions are the sole responsibility of the contractor. The social security contribution of the contractor is 29.6%.

VAT (Value Added Taxes) applies to independent contractors, and most services offered fall under the VAT purview. 

However, in certain cases, independent contractors are exempt from VAT.

Working with an Employer of Record in Portugal for hiring local workforce and handling onboarding, payroll, taxation, compliance and legalities, and more. 

By choosing a strategic EOR Portugal as your partner, the route to enter Portugal becomes smooth and cost-effective. To know more, talk to Skuad’s experts today.

Fines/Penalties

The Portuguese Labor Code imposes strict penalties against child labor misuse. 

The penalties can go up to 2 years in jail or 240 days in fine. 

Furthermore, since 2021, employers cannot contact employees beyond their sanctioned work hours unless it is an emergency. 

Any unnecessary contacts will attract penalties for the employer. 

Other than that, the misclassification of employees can also lead to hefty penalties. 

IP protection

In Portugal, the employer usually owns the IP or Intellectual Property created by any employee during their employment. 

However, certain exceptions can be made if there is a written agreement.

Payroll

Portugal payroll processing involves many key steps and must comply with local employment laws. 

You must ensure a written employment contract for each employee, which outlines employment terms like salary and payment frequency. 

Before payroll processing, you must remember the social security contributions - 11% to be deducted from the employee's salary. 

Once you've calculated the net salary, you can clear out the payments by bank transfers, or other digital payment platforms like Paypal. 

Employers in Portugal must also provide their employees with monthly payslips, including details on their gross salary, deductions, and net pay.

Best ways to pay employees in Portugal

Payroll outsourcing in Portugal is one of the best ways to address the country's complicated HR ecosystem. 

Consider Skuad your EOR and speak to us to learn more about how we can become your effective partner.

Another option is to pay employees directly through cash, bank transfers, or other systems. 

However, this can become tricky when hiring in a country like Portugal, as their payroll processing laws differ from other regions. 

Managing these complexities can lead to compliance issues, making payroll outsourcing a more efficient solution.

Benefits & Compensation

Benefits and compensations in Portugal cover health insurance and social security contributions. 

Before hiring employees in Portugal, it is important to know these contributions, so that your company can ensure compliance with the local laws. 

Knowing the benefits and compensations also ensures that you can offer attractive pay packages to the employees. 

Here are the benefits and compensations available in Portugal:

Government benefits:

Public Health Insurance

• Unlike many other countries, public health insurance is not mandatory in Portugal.

Private Health Insurance

• Portugal's companies often partner with private health insurance service providers. 
• These service providers assess the gender and age of the employees and then offer packages. 
• The employees can choose their preferred package and pay the additional premium, which is charged annually.

Social Security Contributions

• These contributions cover other areas like pensions, unemployment, and family allowances. Both the employer and the employee contribute.

Worker Rights

Minimum working age

• Sixteen years is the minimum working age.
• Once individuals are 18, they can work on an employment contract without completing their formal education.

Working hours

• The statutory working hours in Portugal are 40 hours weekly or 8 hours daily.
• A typical working day in Portugal begins at 0900 and ends at 1300, followed by a two-hour lunch break from 1500 to 1900.

Overtime

• Overtime cannot be more than 150 hours annually in companies with 50 employees, and,
• Overtime cannot be more than 175 hours in companies with less than 50 employees.

Portuguese Minimum wage

• The Portugal minimum wage has been fixed at 740.8 EU each month with 12 installments or 635 EU per month with 14 installments.
• There is no obligatory date for salaries to be paid to employees in Portugal. However, the salary or wage must be paid once every month.

Overtime Pay

Overtime work is paid at the normal hourly rate plus 25% for the first hour and 37.5% for every subsequent hour.

Specific labor laws

The Portuguese Labor Law guides employment in the country. It provides mandates regarding everything from working hours, overtime pay, probation, termination, and offboarding. 

It mandates a 40-hour workweek. Overtime is fully paid, ranging from 25% to 37.5% of the employee's wage. 

Employees are given a range of leaves, from public holidays and annual leaves to children's care leaves and wedding leaves.

Notice period

• During probation, the notice period in Portugal varies between zero and 30 days, depending on the number of service days.

Resignation by an employee during probation

Resignation by an employee after probation

Severance pay

• Severance pay is mandatory in Portugal, locally known as compensação por despedimento/caducidade.
• It is calculated as a percentage based on an employee's service year length and salary.

Working conditions

• Working conditions in Portugal are quite employee-friendly, and the Labor Code clearly establishes zero tolerance for employee discrimination. 
• Every employer must ensure that employees have a secure workplace where they feel mentally and physically safe. 
• The Labor Code lays down rules for employee dismissal, ensures that unfair terminations are prevented, and makes severance pay mandatory.

Anti-discrimination laws/acts

• Subsection III of the Portuguese Labor Code lays down provisions for the equality of every employee in the country. 
• Every employee has a right to seek work and employment, and they cannot be discriminated against based on gender, religion, ethnicity, or origin. 
• The employer has to bear the compensation if they've practiced any form of discrimination.

Health & Safety

• In Portugal, health and safety measures are necessary per the Portuguese Employment Code, Arts. 281 to 284.
• Every employer must maintain a healthy and hygienic workplace, and the protocols must be followed by both the employer and the employee.
• Every employer is bound to ensure workplace safety, preventing workplace health hazards.

Remote & Hybrid Work

The remote work policy outlines the guidelines, expectations, and procedures for remote work. 

It sets the work expectations and regulations to be followed during remote & hybrid work. 

Many countries have specific remote & hybrid law policies, which may be difficult to navigate without a Portugal EOR, like Skuad.

Flexible work arrangement

The Portuguese Labor Code does not have a specific law or section exclusive to remote work. 

However, it is important to note that the remote & hybrid work culture is growing in the country and is more commonly termed 'telework.' Section V of the Portuguese Labor Code provides certain relevant regulations. 

• To avail of a work-from-home facility, a written 'telework contract' is mandatory.
• Any employee who has a child of up to 3 years can utilize this opportunity to set up a teleworking system. 
• Any employee who has a child with special needs can also avail of the telework facility.
• Single parents with a child of up to 8 years are also eligible to avail themselves of telework facilities.
• Teleworking facilities are available for employees with a history of domestic violence, and a non-main caregiver for four years.

Furthermore, the Portuguese government is also encouraging remote and hybrid working facilities. 

Since 2022, there has been a legislative change, and the government has introduced the "Digital Nomad Visa." It is a special visa that allows remotely working employees to stay and work in the country for 12 months. After this span, they can apply for a residence visa.

Technology requirements

Employer obligations: The employer is required to provide appropriate training to the employees on proficiently using the technologies. 

Along with the training, the employees should be given the required equipment, such as a laptop, headphones, mouse, etc. 

The communication channels between the employer and employee should stay open at all times. 

Setting up a home office has some expenses, which the employer should provide. These may include internet costs, electricity costs, and system maintenance costs. 

Employee responsibilities: The employee is responsible for maintaining all the equipment and devices provided by the office and diligently attending technological sessions conducted by the office. 

A reliable internet connection is necessary for remote work, and setting one up is the employee's obligation. 

They must also respect the standard working hours, and be fully engaged in office work allotted to them. 

The company provides tools and equipment for office use only, so following that guideline strictly is the employee's duty. They must not use these devices for personal work.

Infrastructure requirements

To support a remote and hybrid work setup, both parties need to be assured of a few infrastructural requirements. You can keep this checklist at hand before sanctioning telework in Portugal:

• A safe, comfortable, and correctly set up workspace should have sufficient lighting, whether natural or artificial.
• A storage space for the safekeeping of essential documents and equipment.
• A supportive remote and hybrid work policy from the company will quickly address an employee's issues.
• An up-to-date headset and webcam for quality audio and video during virtual meetings.
• Free and open access to platforms like Microsoft Teams and Zoom.

Salary

The average salary in Portugal is  €20,946 per year, which roughly translates to USD 22697 per year at the current exchange rates. 

This average income varies largely with the job role, total years of experience, the overall economy of the country, job industry, etc. 

Knowing the average salary in Portugal can help ensure fair and competitive pay packages, making it easier to retain highly qualified candidates. 

Salary benchmarking also helps employers follow state—and federal-sanctioned wage guidelines like the minimum wage in Portugal.

Being your EOR Portugal, Skuad can guarantee that your company hires the best talent in a fair package. 

You can use the Skuad cost calculator to estimate your hiring budget, where you have to feed in your estimated salary, for an overview of costs.

Leave Policy in Portugal

Understand the leave policy in Portugal to ensure legal compliance:

Public holidays in Portugal

All employees in Portugal get a day off on public holidays. These are:

Annual Leave

• Twenty-two days of paid annual leave is statutory.
• The leaves are accrued if not used.
• It is up to the employer to give more than the statutory paid leave.

Bereavement Leave

Employment laws in Portugal includes leave for bereavement. 

Employees who have lost a family member can take up to two days of paid bereavement leave.

The employee has to submit these two documents – 

(a) the death certificate of the family member, and 

(b) the Probative document sent to the employer by the authorities.

Sick Leave

• Employees can avail of sick leave, but the minimum requirement is four consecutive days of leave.
• Social Security pays sick leave.

Maternity Leave

• Social Security pays maternity leave in Portugal.
• New mothers can avail themselves of the leave for 120 days.

Paternity Leave

• Mandatory 20 days of leave is granted to the father. An additional five days are optional.
• Social Security makes the payment of the leave.

Other types of leaves

• Marriage Leave: Employees can take up to 15 consecutive days on the occasion of their marriage.
• Study Leave: Employees can take leave a day before and on the test day.‍
• Family Care Leave: Employees can take up to 30 days to care for a family member who is less than 12 years of age. For elders, employees can take up to 15 days' leave.

Background Checks

An employee background check is vital as it helps companies make quick, informed decisions and reduce their hiring risks. 

Portugal background checks are not mandatory by law. However, they are legal, provided the employer complies with the provisions mentioned in GDPR and National Data Protection Laws. 

GDPR clearly outlines that any employee's personal data cannot be unnecessarily kept with the employer once the purpose has been served. 

So, you must have the employee's consent to the screening and specify the purpose and timeline of background checks in Portugal. 

In case there are any discrepancies in the data, you should ensure complete transparency because employees in Portugal have a right to dispute such findings. 

Some of the most common background checks are criminal background checks, reference checks, education history checks, and employment history checks. 

However, credit checks without prior consent or access to your employees' private, sensitive information are illegal. 

They can cause a serious violation of data protection laws, and the fines can go up to €250,00.

To avoid these legal issues, hire employees in Portugal via an EOR like Skuad. Contact us today to learn more about how we can help!

Probation and Termination

The termination of employment in Portugal can happen on four grounds:

• Disciplinary dismissals
• Position abolition
• Collective dismissal
• Job unsuitability

Employers must inform employees in writing about the reason for dismissal. When it is on disciplinary grounds, a hearing needs to occur, during which the employee is asked to respond to charges.

The Ministry of Labor and the workers' representative must be informed about the dismissal. During the final settlement, the accrued leaves and vacations not taken need to be paid to the employee.

Standard probation period Portugal

The probationary period in Portugal is known as the trial period.

Offboardings

Notice period

An employer in Portugal can terminate and offboard their employee, based on justifiable grounds. The employer must provide a written notice of termination, including the reasons and effective termination date. 

For effective termination, a disciplinary document procedure must be followed, and notice periods must be served. The duration of the notice period varies with years of service and can be adjusted by mutual agreement.

Severance pay

Whenever an employee is dismissed with justifiable grounds, they’re entitled to a severance pay. It is calculated based on the employee's salary and length of service year.

Cultural Considerations

Mastering business etiquette in Portugal often takes time and effort. You have to be considerate of many of its cultures, which majorly include:

• Punctuality: Portuguese culture is rigidly based on punctuality. While a 15-20-minute delay can be acceptable, anything beyond that is not considered courteous.
• Proper attire: Dressing according to the occasion is important in the culture of Portugal. Business attire is of the utmost importance, where men must wear suits and women modest formal apparel.‍
• Communication style: Workplace communication in Portugal is mostly formal and indirect. You must communicate politely, maintain the essential non-verbal cues, and ensure proper eye contact. You must also be an active listener and participate in discussions.

Professional Employer Organization (PEO)

Usually, people confuse EORs and PEOs. Both operate in the HR domain but are different from one another. 

A professional employer organization in Portugal is more like your co-employer, and you need to set up your business identity in the country before starting to hire or start operations. 

That is not the case when you work with an EOR.

Skuad has expertise in both domains. As an EOR, we handle the entire hiring and HR processes independently without any need for your business to incorporate a business entity in Portugal. 

On the other hand, as a PEO service provider, we share your responsibilities in the HR landscape and ensure compliance with local laws to work seamlessly with your business set up in Portugal.

Conclusion

Setting up a remote workforce in Portugal can be daunting unless you decide to work with a specialist like Skuad as your Employer of Record in Portugal. 

We support you in saving your time, money, and resources. With us around, you do not have to get involved in intricate matters of interpreting local labor laws or corporate laws. 

Based on your exclusive business needs, you can choose to work with us as an EOR or PEO.

Take this further and speak to our experts. Contact us today!

FAQs

1) What is an employer of record in Portugal?

An Employer of Record (EOR) becomes the legal employer for your Portuguese staff, handling HR tasks like payroll, taxes, and social security. This eliminates the need to set up a local entity, saving time and resources. EORs also ensure compliance with Portugal's labor laws, minimizing legal risks associated with international recruitment.

2) What is the EU employer of record?

An EU Employer of Record (EOR) acts as your legal employer in Europe, simplifying workforce management. They handle HR tasks like payroll, taxes, and legal compliance across borders. This lets you hire European talent without setting up local entities in each country.

3) What is the difference between an employer of record and a PEO?

An employer of record (EOR) legally employs individuals on behalf of another company and handles all compliance, payroll, and HR tasks. A Professional Employer Organization (PEO) co-employs staff, sharing responsibilities with the client company but typically requires the client to set up local entities.

4) What are the benefits of EOR?

Hiring via an EOR comes with many benefits, like a simplified hiring process, compliance assurance, cost efficiency, etc. When you hire with an EOR, they become your official employer in a country and take charge of recruitment, payroll processing, and save on the costs associated with setting up a legal entity in a new market. They also ensure compliance with the local laws and reduce the risk of legal issues and penalties.

5) What is the difference between payroll and employer of record?

Payroll refers to the process of calculating and distributing employee salaries, including bonuses and deductions like taxes. An employer of record, on the other hand, is a third-party service provider who acts as the company's official employer, taking care of all functions like administration, taxation, human resources, etc.

6) How much does an EOR in Portugal cost?

A Portugal EOR can cost you anywhere between a hundred to a thousand euros per employee every month. You can check your estimated cost from Skuad, where you get various exclusive packages.

7) What is the employer of record for foreign employees?

Employer of Record acts as a bridge for companies seeking global talent. They take legal employer responsibilities for your global workers, handling critical HR functions like payroll, tax administration, and benefits management.