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Hiring Your First Employee in Portugal

Researched and written with AI tools from official sources. How we make our guides

What a first hire involves in Portugal, from telling Social Security before day one to the 23.75% employer rate, work accident cover, and monthly payroll.

The Portugal Brief 8 min read

Hiring Your First Employee in Portugal

Last verified: October 2026.

Who this is for

  • You run a company or work as a sole trader in Portugal and want to take on staff.
  • You are about to make your first job offer and want to know the real cost.
  • You already have staff and want to check the 2027 change to Social Security returns.

Not for you if: you want to employ a cleaner, carer, or nanny in your home. Read Hiring a Domestic Worker in Portugal instead.

When you hire someone in Portugal, you become an employer (entidade empregadora). Before the person starts, you must tell Social Security (Segurança Social) about the hire and have work accident insurance in place. Each month you then pay the salary and withhold income tax. You also pay social security: 23.75% of gross pay from you, plus 11% you deduct from the worker. Budget for 14 salary payments a year, not 12. The minimum wage for a full-time job is €920 a month in 2026.

Step 1: check your employer registration

Your business must be registered with Social Security as an employer before the first hire. Sign in to Segurança Social Direta, the online portal, and check that your business appears as an employer. If it does not, use the "register employer" service (inscrever entidade empregadora) on gov.pt.

Give your accountant access to the portal early. Most of the reporting below happens there, and the deadlines are short.

If you work as a sole trader on recibos verdes, hiring adds employer duties on top of your own. Nothing you already do goes away.

Step 2: agree the contract

The Labour Code sets the minimum your employee must get. You can offer more, but not less.

  • Permanent contract (contrato sem termo). The default.
  • Fixed-term contract (contrato a termo). Only lawful for a temporary need, such as a seasonal peak or covering an absent colleague. It must be in writing and state the reason. If it is not, the law treats it as permanent.
  • Part-time and remote work. Must also be agreed in writing.

Every new contract starts with a trial period (período experimental). For most permanent jobs it lasts 90 days. During it, either side can end the contract without a reason. After 60 days you must give seven days' notice, and after 120 days, 30 days.

Put every contract in writing, even when the law does not require it. Check whether a collective agreement (contrato coletivo) covers your sector, as it can set higher pay and other terms. The Employment Contracts, Pay, and Worker Rights in Portugal guide covers contract types, notice, and severance in detail.

Step 3: tell Social Security before the first day

You must report the hire to Social Security before the person starts work. You do it online in Segurança Social Direta. gov.pt says you can report it in the 15 days before the start date.

Only very short contracts (for seasonal farm work or tourist events) and shift work can be reported later, within 24 hours after the start.

You need:

  • the worker's social security number (NISS), or their details if they do not have one yet
  • the contract type
  • base pay and any other fixed monthly pay
  • job title and category

If the worker has no NISS, Social Security gives them one from the details you send. The NISS guide explains how that works.

If you report late

Social Security treats a late report seriously, because it is how undeclared work is caught.

  • Up to 24 hours late: a minor offence. A company with fewer than 50 staff pays €75 to €375, or €150 to €750 if it was deliberate.
  • More than 24 hours late: a very serious offence. A company with fewer than 50 staff pays €1,875 to €9,375, or €3,750 to €18,750 if deliberate.
  • Never reported: Social Security assumes the worker started on the first day of the third month before it found out. You owe contributions from then, unless you can prove otherwise.

Fines for an individual employer are lower, and for companies with 50 or more staff higher. Failing to report a hire for more than six months after the deadline can be a crime.

Step 4: take out work accident insurance

Work accident insurance (seguro de acidentes de trabalho) is compulsory for every employee. It is not optional cover. Have the policy start on the worker's first day.

The insurer pays treatment and part of lost pay if the worker is hurt at work or on the way to or from work. If you have no insurance, you pay those costs yourself. Your payslips must name the insurer. Update the policy whenever pay changes. See Claiming for a Work Accident in Portugal for what the insurer must cover.

What a hire really costs

The salary on the contract is not the full cost.

  • Minimum wage. No full-time worker can earn less than €920 a month in 2026. A collective agreement may set more.
  • Fourteen payments. You owe a holiday payment (subsídio de férias) and a Christmas payment (subsídio de Natal), each normally a month's pay. Budget monthly pay times 14.
  • Employer social security. You pay 23.75% on top of gross pay, including the two extra payments. The worker pays 11%, which you deduct.
  • Meal allowance. Most employers pay a daily meal allowance (subsídio de refeição). It is free of income tax up to €6.15 a day in cash, or €10.46 a day on a meal card or vouchers.
  • Insurance. The work accident premium, priced by your insurer.

Example. A worker on €1,000 gross a month costs you €1,237.50 in each of the 14 payments. That is €17,325 a year, or about €1,444 a month spread over 12 months. Add the meal allowance and insurance on top.

Some sectors and some workers have different rates. Social Security's practical guide lists them.

Step 5: run payroll every month

Once someone is on the books, the same cycle repeats.

  1. Pay the salary and give a payslip (recibo de vencimento). It shows gross pay, the 11% deduction, income tax withheld, net pay, and the name of your work accident insurer.
  2. Withhold income tax (IRS). You deduct it using the official withholding tables from the Tax and Customs Authority (AT). You pay it to the AT by the 20th of the following month.
  3. Report pay to Social Security. Under the current system, you send the monthly pay return (Declaração Mensal de Remunerações) by the 10th of the following month.
  4. Pay Social Security contributions. You pay between the 1st and the 25th of the following month. The deadline moved from the 20th to the 25th in 2026.
  5. Report changes. Tell Social Security about a change in fixed pay, and about the end or suspension of a contract by the 10th of the following month. Until you report an end, you keep owing contributions.

The change coming on 1 January 2027

Social Security is replacing the monthly pay return with a new model called Simplificação do Ciclo Contributivo (SCC). Under SCC, Social Security works out your contributions from the data it already holds. That includes contracts, rates, fixed pay, and days of sick or parental leave.

You then confirm or correct the amount by the 20th of the following month, and pay by the 25th. If you say nothing, the amount counts as accepted.

During 2026 you can join SCC at any time in Segurança Social Direta. It takes effect the following month and cannot be reversed. From 1 January 2027, every employer must use it. Keep each worker's contract and pay details correct, because the bill will be built from them.

Do you need an accountant?

A company must have its accounts signed by a certified accountant (contabilista certificado). Most small employers also use one, or payroll software, to run payroll, withholding, and Social Security returns.

The fines for a late report or an uninsured worker are far higher than a monthly fee. Agree in writing what your accountant does and what stays with you. If you are still setting up, see Starting a Company in Portugal.

A checklist before day one

  • Business registered as an employer with Social Security.
  • Written contract signed, with the trial period stated.
  • Hire reported in Segurança Social Direta before the start date.
  • Work accident insurance in force from the first day.
  • Payroll set up for withholding, the monthly return, and payment by the 25th.

This guide is general information, not legal or tax advice. Your duties depend on your sector's collective agreement and your situation. Check with a certified accountant, an employment lawyer, Social Security, or the Working Conditions Authority (ACT) before you hire.

Sources

This guide is written from official sources and, where relevant, organisations' own websites.

Last verified October 2026. Rules and fees change; check the official source before acting.

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