Employer of Record (EOR) in Portugal
What Is an Employer of Record (EOR)?
An Employer of Record (EOR) in Portugal is a third-party company that legally employs workers on behalf of a foreign business.
The EOR handles:
Employment contracts
Payroll and tax compliance
Social security contributions
Data security and Local labor law compliance
This enables international companies to hire talent in Portugal quickly and compliantly,
without the need to open a Portuguese branch or subsidiary.
Why Use an Employer of Record in Portugal?
Portugal has a strong talent pool and a business-friendly environment, but local compliance can be complex.
With an EOR, you get:
Fast Market Entry
Hire in Portugal within days — no entity required.
100% Legal Compliance
We handle contracts, social security, and local labor laws.
Cost Savings
Avoid legal, HR, and accounting overhead.
Focus on Growth
You manage the work — we manage the employment.
UK Legal Compliance
For UK Companies, avoid IR35 issues by getting remote workers in Portugal - a solution like this is also known as employee leasing.
What How EOR Works in Portugal
Task
Done by You
Define role & salary
Day-to-day work management
Done by EOR (Us)
Sign compliant employment contract
Run payroll in Portugal
Pay social security & taxes
Terminate employment legally
Day-to-day work management
Superior Employee Experience & Support
Portuguese Employment Law:
What You Should Know
Social Security:
Employers contribute 23.75% and Employees 11% of salary on Social Security Tax.
Sick Leave:
No cost to employer. Paid via Social Security after 4th day.
Termination:
Requires notice and/or compensation.
Our EOR service ensures full compliance with Work Authority - ACT (Autoridade para as Condições do Trabalho); Social Security - Segurança Social and Tax Authority - AT - Autoridade Tributária a Aduaneira.
Local employment law (Lei n.º 7/2009, de 12 de fevereiro) here and a short resume on law compliance here
Our Employer of Record Service Includes
Employment contracts
(EN & PT)
Monthly payroll & payslips
Income tax and social security filings
Employee onboarding & offboarding
HR support in English and Portuguese
Life insurance, health insurance, and individual retirement savings scheme (PPR) as optional fringe benefits
Who Uses Our EOR Services in Portugal?
Tech startups
hiring remote engineers
Consulting firms managing local projects
Global companies
testing the Portuguese market
Remote-first teams
hiring top European talent
Sales rep
for companies entering the Portuguese market
Relocation support in Portugal
Visa for employees and family
Tax number (NIF) for employees
Social security number (NISS) for employees
Fiscal Benefits - NHR & NHR2.0 (IFICI) = 20% flat rate on income tax for highly qualified workers for 10 years
FAQ: Employer of Record in Portugal
Is it legal to hire through an EOR in Portugal? Yes, EORs are a compliant way to hire under Portuguese labor law.
Can I hire contractors instead? Yes, but it comes with higher legal risk. Many “contractors” are deemed employees by Portuguese authorities. EOR ensures full compliance.
How fast can I onboard a Portuguese employee? Typically within 1 week after gathering required documentation.
What if I want to convert to a local entity later? You can transition employees from our EOR to your company at any time.
Why Outsourcing-Portugal.co.uk?
Foreign Exchange (FX) & Hidden Fees
We know that international payroll can come with surprise costs.
That’s why:
All fees are disclosed upfront—no hidden markups.
We pay and invoice only in EUR.
Your employees receive full salary transparency, with net pay and deductions clearly documented.
Local Tax & Social Security Contributions
Portuguese law requires employers to contribute 23.75% of an employee’s gross salary to social security, while employees contribute 11%.
These are built into our payroll calculations and reported to you monthly, so there are no surprises.
Sick Leave, Parental Leave & Public Holidays
Employee leave policies vary by country. In Portugal:
Employees are entitled to 22 working days of paid annual leave plus 13 public holidays.
Sick leave and parental leave are paid according to local law and processed through the Portuguese Social Security system.
We manage all compliance and employee communication on your behalf.
Local Tax & Social Security Contributions
For non-EU citizens, immigration processes can be complex.
We offer:
Support for visa and work permit applications where legally applicable.
Guidance on contract structures that align with immigration law.
Ongoing compliance updates if rules change during employment.
Probation, Notice Periods, and Termination
Portuguese employment law includes:
Probation and Notice periods based on tenure.
Structured termination procedures, which we handle in compliance with labor laws and in partnership with your team.
Data Privacy and IP Protection
We operate under strict GDPR compliance. All employment contracts include:
Intellectual Property assignment clauses.
Non-disclosure and confidentiality agreements,
tailored to your sector.
Hire with Confidence
Working with an EoR shouldn’t involve guesswork. We proactively manage risks, explain all obligations, and keep you—and your employees—fully informed. That’s how we help international companies build teams in Portugal with peace of mind.
We’re a company with deep expertise in Portuguese employment law,
helping international businesses build teams in Portugal — the right way.
“Outsourcing Portugal made it seamless for us to hire a designer in Lisbon — no headaches, just results.” — UK Tech Startup CEO
Why EOR is Better Than Self-Employment or Freelance?
Full Legal Compliance (No Misclassification Risk)
Freelance risk
Portuguese labor authorities are strict about worker classification.
If a freelancer behaves like an employee (by setting regular hours, receiving regular pay, and having tools provided by the company), it can be legally reclassified as an employment relationship.
Some news about this can be found in the media here, and in here.
EOR advantage
With an EOR, the worker is considered fully employed under local labor laws, thereby removing the risk of tax audits, penalties, backdated social security contributions, or lawsuits.
In Portugal
retroactive reclassification can trigger:
Social security fines,
Employer tax back payments,
Penalties for unpaid contributions.
Better Social Security & Long-Term Protection
Freelancers/self-employed
must pay and manage their social security contributions
with fewer protections.
EORs ensure
Employer pays 23.75% into Portugal’s social security system.
Access to health insurance, unemployment, retirement pensions, maternity/paternity leave, and sick pay.
Optional add-ons like private health, life, or pension (PPR) plans.
This offers greater social protection, which is crucial in a country with a strong welfare system like Portugal.
Simpler for the Worker (No Bureaucracy)
Self-employed individuals must:
Open a fiscal activity with Finanças (Portuguese tax office),
File quarterly VAT,
Manage invoices (recibos verdes).
EOR-employed individuals:
Sign a compliant labor contract,
Receive monthly payslips,
Have taxes and contributions deducted automatically.
Result: No tax surprises or legal guesswork.
Better for Employer Branding and Talent Retention
Freelancers often feel like second-tier contributors, lacking benefits and job security.
EOR offers:
Paid holidays (22 days + 13 public holidays),
Sick leave, 13th/14th salary bonuses
Employees on EOR contracts feel valued and integrated—which improves retention, culture, and productivity
Visa and Immigration Compliance
Freelancers can't easily sponsor their visas or get residency unless through specific visa channels (e.g. D7, digital nomad).
EOR providers:
Can sponsor visas for non-EU talent,
Handle immigration paperwork, registration (NIF/NISS), and onboarding into national systems.
This is vital for startups or companies hiring talent relocating to Portugal.
Final Thought - EOR is ideal when:
You want to legally hire in Portugal without opening a company.
You're hiring long-term contributors, not short-term gigs.
You want to minimize legal, tax, and reputational risk.
Freelance or self-employment may seem cheaper or simpler, but it’s often a false economy.
,The potential risks—from fines to employee misclassification to denied visas—can outweigh short-term savings.
Ask for free annual simulation on employee cost according to your needs:
- Annual due to some annual costs like 13th/14th salaries, and mandatory work insurance
- Bonus, life and health insurance, retirement plan and other fringe benefits as optional
- Monthly fee in our simulation by % or fixed fee - You choose.
- If applicable only setup costs: Visa, obtain SS and Fiscal number and Fiscal Benefits for the employee. No hidden costs!
- Not sure if you are eligible for the Fiscal Benefit of IFICI? We evaluate for free!
- We offer the best financial package to the employees to reduce taxes, acording to their needs,
- Our services are customisable and we provide unlimited support
- Against other Global players like Remote and Deel, we offer a better service and prices!
Ready to hire in Portugal — without opening a company?
Talk to our EOR specialists.