We have observed, over the past decade, how Portugal has attracted attention from businesses looking for new talent and growth markets. As we walk through 2026, the opportunity to hire in Portugal continues to expand, supported by stable economic indicators and the country’s appeal for tech and innovation sectors. At EWS Limited, we have helped many businesses overcome regulatory hurdles and settle quickly into the Portuguese market. In this guide, we are sharing our insights—facts, figures, and first-hand experiences—designed to help you succeed with hiring in Portugal in 2026.
Hiring in a new country starts with understanding its people, rules, and risks.
Any hiring decision must be grounded in knowledge of the job market. According to the Portugal News, Portugal’s unemployment rate has reached 5.6% at the end of 2025, the lowest level since 2002. Notably, adult unemployment dropped to 4.7% and youth unemployment improved to 18.4%. The job market is robust and continues to welcome foreign investment and companies establishing operations for the first time.
This resilience is confirmed by information from EURES, which shows an employment rate of 72.4% in 2023—two points higher than the EU27 average. With higher levels of economic participation among both women and men, the country stands out in workforce inclusivity. Youth employment still needs focus, yet even here, there is progress.
The outlook for 2026 is steady according to Banco de Portugal and the European Commission. Unemployment is predicted to hover around 6.2%, paired with ongoing job creation and moderate but positive employment growth rates into 2027, as also outlined by Portuguese Public Finance Council forecasts.
Our clients often describe Portugal’s talent pool as educated, multilingual, and adaptive. Many young professionals speak fluent English, and technical skills are increasingly common, especially around Lisbon, Porto, and other urban hubs.
When we discuss the challenges of hiring abroad with our partners, understanding local laws is always top of mind. Portugal’s labor laws, updated periodically, belong to the European social model—protecting employee rights while providing frameworks for flexible employment when needed.
Portugal recognizes indefinite (open-ended), fixed-term, and part-time contracts. Written contracts are compulsory in most situations, especially for fixed-term and part-time arrangements. Within the contract, the following must be addressed:
Probation periods are typically 90 days for most positions. For senior roles, probation may extend to 180 days, though it cannot exceed 240 days in managerial or highly technical jobs.
The standard work week in Portugal is 40 hours, usually split across five days. Overtime is limited and must be compensated. In our experience, wage supplements for overtime are set at 25% above the base for the first hour, and 37.5% for each following hour on workdays, with higher rates for weekends or holidays.
Portugal grants a minimum paid leave of 22 working days annually. National holidays (nine per year) are observed, with regional holidays added depending on where the work is performed.
Work-life balance laws are not just respected—they are expected.
Dismissal rules are clear. Termination can be for cause or redundancy, but sufficient notice must always be given. Severance is required, calculated based on tenure—12 days’ pay for each year, capped by seniority and law. Employees can appeal termination, so documentation and fair process are critical.
Portugal’s rules on anti-discrimination align with EU directives. No discrimination on grounds of sex, age, disability, religion, or sexual orientation is allowed. Strict regulations exist to protect employee data, brought into local law from the GDPR.
Employers must comply, not only in contracts and daily dealings, but also in record-keeping and payroll data. We have seen audits focus first on contract transparency and data storage.
In our experience, hiring in Portugal succeeds when businesses focus on transparency from the very start. The process aligns closely with what is seen in other EU countries but carries its own nuances.
For remote hires or setups outside major cities, digital onboarding is widely accepted. However, local documentation, such as proof of address or tax ID confirmation, is always required.
Candidates need to provide:
Companies in Portugal must comply with payroll rules that are precise and well-enforced. Monthly payroll must account for gross salary, income tax (IRS), and social security contributions, typically 23.75% paid by the employer and 11% by the employee.
We have often helped partners with Employer of Record solutions to manage these requirements when entering Portugal for the first time, ensuring compliance with all obligations and helping avoid unnecessary errors.
The minimum wage is set annually by the government. For 2026, projections indicate continued small increases in line with cost-of-living changes. The exact rate will be officially published in late 2025, but most estimates, based on government statements, put the minimum monthly gross wage close to €950. Salaries for IT, engineering, and management roles are higher, especially in Lisbon and Porto.
Add-ons and non-salary benefits are common parts of total compensation. Employees often expect allowances for:
In Portugal, employees receive a 13th and 14th salary payment, typically for Christmas and summer holidays. This double-salary system is a legal requirement for many contracts. It is usually split and paid throughout the year, unless otherwise agreed.
Contributions to the social security system cover unemployment, illness, parental leave, and pensions. For companies and staff, this means robust safety nets—but also the importance of accurate payroll management, especially across multiple countries.
The pandemic accelerated remote and hybrid work models in Portugal, and the changes are here to stay. According to labor law updates, remote work is allowed for many roles, with the company obliged to provide the necessary equipment or pay a remote work allowance.
Data security and privacy rules must be upheld when employees work from home. This means regular staff training, updated privacy policies, and secure digital payroll and HR platforms. For startups, tech firms, and scaling organizations, this flexibility is a draw for attracting young, skilled workers.
Hiring across borders is increasingly common as companies seek specific skills. In Portugal, welcoming foreign workers is supported by a range of visas and residency options. For non-EU nationals, the most common approvals are:
The process requires employer sponsorship, labor market testing (if outside tech startup scope), and proof of employment contract. Documentation is handled with the Serviço de Estrangeiros e Fronteiras (SEF), Portugal’s border and immigration service.
Employees from the EU/EEA/Switzerland need only register their residence. Non-EU staff must start their permit application before arriving in Portugal but can often complete the process soon after arrival.
We have found that immigration processing times have decreased post-pandemic, with most work permits processed within 2 to 4 months. Delays can happen, so planning ahead is always best.
Global mobility is more than just getting a visa. Companies should also plan for local registration, bank accounts, health insurance enrollment, and logistical support. Our team has extensive experience guiding businesses through the immigration and on-boarding process, supporting relocations for IT and management teams. For a closer look at what’s involved, our resource on international hiring compliance is helpful to review.
Hiring in Portugal 2026 means understanding not just what the law says, but how it is enforced. Inspections are frequent, and penalties for misclassification, improper contracts, or payroll errors can be significant. Many companies entering for the first time choose an Employer of Record (EOR) solution or else work closely with local legal and payroll experts.
Worker misclassification is a topic of active enforcement. Portuguese law is strict about employment status—part-time, contract, freelance, and staff all have clear definitions. Employment relationships that act as de facto employment must be given contracts, social contributions, and all protections under Portuguese labor law.
Workplace diversity and inclusion are growing trends, encouraged by government incentives and the expectations of younger professionals. Companies fostering a culture of openness and growth attract higher-quality candidates and enjoy lower turnover.
For startups, scale-ups, and established global companies, the biggest challenge is often growing from an initial hire to building a functioning team. At EWS Limited, we have advised founders through both employer-of-record (EOR) and local entity establishment. There are pros and cons to each model—EOR means speed and simplicity, while forming a local entity brings autonomy but requires handling all compliance yourself.
If you are curious about this, we recommend our guide on the first hire in a new country: EOR vs. entity setup. For companies looking to design a long-term people strategy, our advice is to plan for future scale, not just immediate needs. Tools and guidance for scalable HR strategies are proving especially useful for businesses in IT and tech.
As demand for skilled workers increases and the Portuguese workforce evolves, flexible approaches to hiring, retention, and compliance remain key to business success.
Many companies ask us if Portugal remains an attractive market for hiring. Our answer is a resounding yes. The country’s stable economic markers, multilingual talent pool, and business-friendly climate combine to make hiring smooth—when you respect both the letter and spirit of its labor laws. With the latest unemployment rate at just 5.6% and a strong commitment to job creation (as shown in independent forecasts), conditions are positive for both first-time and returning investors.
Our experience at EWS Limited tells us that companies who prepare properly, follow compliance requirements, and prioritize employee engagement realize the full potential of hiring in Portugal. If you are considering your next step, whether it’s expansion, first-time hiring, or building remote and international teams, we invite you to get in touch and discover how our services can help you grow safely, efficiently, and with total peace of mind.
The Labor Code is the main law regulating employment in Portugal. It covers employment contracts, hours, minimum wage, overtime, leave, anti-discrimination, and termination procedures. Other rules come from EU regulations (especially on equal treatment and data protection), collective bargaining agreements, and sector-specific rules for finance, healthcare, or education.
To hire in Portugal for 2026, companies need to:
Good planning, legal contracts, and proper onboarding ensure a smooth hiring process.
Minimum wage rules are set by the government each year. While the 2026 figure will be published at the end of 2025, most forecasts suggest a rate near €950 gross per month for full-time employees. Different sectors may have higher agreed minimums due to collective contracts.
Hiring foreign workers in Portugal is straightforward with the right support and planning. For EU/EEA/Swiss nationals, it is mostly a matter of registration. For non-EU staff, companies must sponsor a work permit, prove labor market need, issue a contract, and meet immigration requirements. Processing times have shortened in recent years, often taking just a few months.
Hiring costs include salary, employer social security contributions (23.75%), wage add-ons (like meal allowance and double salaries), and hiring/onboarding expenses. For skilled roles, especially in IT or management, base salaries are significantly higher than the minimum wage. There are also costs for compliance and potential relocation if hiring foreign staff.
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