The salary is about two thirds of what the hire costs
Nobody argues with the 23.75%. What catches people out is that it applies to fourteen payments rather than twelve, that the meal allowance is paid on top of all of it, and that accident insurance is not a benefit you choose to offer. By the time a first hire is actually working, the monthly figure the founder had in mind has grown by about half.
Two of the months are not months
The single most common error in a first Portuguese budget is multiplying by twelve. The Christmas subsidy and the holiday subsidy are each a full month of pay, they are statutory, and employer social security applies to them exactly as it does to the other twelve.
A typical year: the holiday subsidy before the summer break and the Christmas subsidy by 15 December. You may pay both in twelfths across the year instead, which smooths the cash flow and leaves the annual total untouched.
So the base figure is not the monthly salary. It is the monthly salary times fourteen, and then 23.75% of that again. For a €1,500 offer that is €21,000 in salary and €4,987.50 in employer contributions before anyone has bought a laptop.
Put your own number through the statute
Every rate below is fixed in law for 2026. The two inputs that are genuinely yours are the salary and the insurance quote, and we have left the last line at zero so you can see what the law alone produces.
Cost per working day, across roughly 220 days after holiday and public holidays: —
The filing rules moved, and most guides have not
Decreto-Lei 127/2025 took effect on 1 January 2026 and rewrote how employers talk to Social Security. If you are reading a guide written before December 2025 — which is most of them — three of its deadlines are now wrong.
Article 29 now says the admission is communicated until the start of performance of the contract. The old rule was fifteen days in advance. Very short contracts and shift work may still be reported within twenty-four hours after the start.
Not fifteen days ahead any moreFail to report and Social Security presumes the person began on the first day of the third month before the breach, and charges contributions from there. The previous text reached back twelve months. Still expensive, and now finite.
Three months, not twelveInstead of filing remunerations each month, the system computes from the permanent remuneration you declared at hiring. You confirm or correct by the 20th of the following month, and silence counts as acceptance. Social Security may also fill gaps itself from data it holds.
Declare once, confirm monthlyThe payment window moved. Guides still quoting the 10th to the 20th are describing the previous article 43. The transition to the new model runs through 2026 and is compulsory for every employer from 1 January 2027.
Opt in during 2026, or be moved in- Decreto-Lei n.º 127/2025, de 9 de dezembro — twentieth amendment to the Código dos Regimes Contributivos, amending articles 23.º-B, 29.º, 32.º, 40.º and 43.º, adding article 40.º-A, in force 1 January 2026, mandatory for all employers from 1 January 2027.
- Lei n.º 98/2009, art. 79.º — the employer must transfer work-accident liability to an authorised insurer.
- Decreto-Lei n.º 139/2025 — minimum wage of €920 from 1 January 2026, with €970 and €1,020 agreed in social concertation for 2027 and 2028 but not yet enacted.
- Portaria n.º 51-B/2026/1 — meal allowance reference value of €6.15, with the card ceiling 70% above it.
- Lei n.º 13/2023 — the Agenda do Trabalho Digno, which raised dismissal compensation to 14 days per year of service and set the 180-day probation for first-job seekers and the long-term unemployed.
The sequence, in the order it has to happen
None of these steps is difficult. They are only expensive when done late, and two of them have to be finished before the person is allowed to start.
Your Social Security employer number has to exist before anyone can be attached to it. If the company was formed without staff, this is a separate step and not an automatic one.
A Portuguese social security number and tax number. For a foreign hire this is the step that actually takes time, and it is not yours to control. Start it early.
You have seven days to inform the employee of the duration and conditions of the probation period. Fail and it is presumed excluded — which removes the cheapest window you will ever have to change your mind.
Compulsory, and it has to cover the person from the first hour worked. The payslip must identify the insurer carrying the risk, which is a useful way to check that someone actually bought the policy.
Through Segurança Social Direta, declaring the NISS, the contract type and the permanent remuneration. Under the new model that declaration is what the monthly contributions are then computed from, so an error here repeats every month.
Required from the first employee, normally contracted from an external provider, including the admission medical examination. It is a small annual cost and a common inspection finding.
Three other ways, and what each one actually buys
Legitimate when the person is genuinely independent: their own clients, their own equipment, their own hours, paid for a result. Legitimate far less often than it is used. The law presumes an employment contract when indicators such as a fixed workplace, company-owned equipment, set hours, periodic payment and a place in the company structure are present, and two are enough.
Cheap until it is reclassifiedSomeone else employs the person and invoices you. You pay the full statutory cost plus a margin, you avoid setting up payroll, and you do not hold the relationship. Sensible for testing a market, weak for building a team you intend to keep, and the person can usually be moved onto your own payroll later with seniority intact.
Statutory cost, plus marginNeeds a legal justification — a temporary need you can name — and the Agenda do Trabalho Digno tightened both the grounds and the renewals. At the end the employee is owed compensation. It buys a defined horizon, not a cheap exit.
Justification required, compensation at the endThe honest default. The probation period is where the flexibility is: 90 days generally, 180 for complex or trust roles and for first-job seekers and the long-term unemployed, 240 for senior management. Either side may end it, with 30 days’ notice once it has run 120 days.
The flexibility is at the startWe say this to clients more often than they expect: if the plan is to put someone on recibos verdes because the employer cost is uncomfortable, the plan is not a hiring plan. The contribution is what the role costs in this country. Either the role earns it or it does not, and finding out two years later through an inspection is the most expensive possible way to learn the answer.
What this page does not tell you
- 23.75% employer contribution, general regime
- Fourteen payments a year
- Meal allowance exempt to €6.15 cash / €10.46 card in 2026
- Minimum wage €920 on the mainland
- Accident insurance and occupational health are compulsory
- Report the hire by the start of work, confirm payroll by the 20th, pay by the 25th
- Your collective agreement, which may raise the minimum for your sector and add benefits
- Your accident insurance rate, which depends on the occupation
- Madeira and the Azores, which set higher regional minimum wages
- Any hiring incentive you might qualify for
- What ending the employment will cost, which depends on how it ends
One more thing worth saying plainly, because it was the biggest story of the year and it changed nothing: the Trabalho XXI reform package, which would have rewritten more than a hundred articles of the Código do Trabalho, was rejected in the general vote on 19 June 2026. No part of it is in force. Anything you read describing those changes as the new rules is describing a bill that failed.
What founders ask before the first hire
What does an employee really cost in Portugal?
Roughly 1.5 times the twelve-month salary you had in mind. The salary is paid fourteen times a year rather than twelve, because the holiday subsidy and the Christmas subsidy are each a full month. Employer social security is 23.75% on top of all fourteen. Work accident insurance is compulsory. Occupational health is compulsory. The calculator on this page puts your own number through all of it.
Why fourteen payments and not twelve?
Because Portuguese law gives the employee a Christmas subsidy equal to one month of pay and a holiday subsidy equal to another. They are not bonuses and they are not discretionary. Some employers spread them across the twelve months in twelfths, which changes the cash flow and nothing else: the annual cost is the same fourteen months either way.
Is the meal allowance compulsory?
Not by itself in the private sector. It becomes compulsory if a collective agreement covering your sector provides for it, or once you have promised it in the contract or paid it long enough to have created an entitlement. In practice almost everyone pays it, because it is exempt from tax and social security up to 6.15 € a day in cash or 10.46 € on a meal card in 2026, which makes it the cheapest euro you can give someone.
When do I have to tell Social Security about the hire?
By the moment the contract starts being performed. This changed on 1 January 2026: Decreto-Lei 127/2025 replaced the old rule of fifteen days in advance. Very short contracts and shift work may still be reported within twenty-four hours after work begins. Miss it and Social Security presumes the person started on the first day of the third month before the breach, and bills the contributions accordingly.
What is changing about the monthly payroll filing?
The remuneration declaration is being replaced. Under the new model the system calculates from the permanent remuneration you declared when hiring, and you confirm or correct by the 20th of the following month — silence counts as acceptance. Contributions are paid between the 1st and the 25th. Employers can join during 2026 and all employers are mandatorily in it from 1 January 2027.
Can I use a contractor on recibos verdes instead?
Only if the relationship really is independent. Portuguese law presumes an employment contract when a set of indicators are present — fixed workplace, equipment owned by the company, set hours, periodic payment, a position in the company structure — and two of them are enough to trigger the presumption. The savings are real and so is the reclassification, which arrives with back contributions and the employment rights that go with them.
How hard is it to end the employment?
Harder than in most common-law countries and easier than its reputation. The probation period is the cheap window: 90 days as a rule, 180 for roles of complexity or trust and for first-job seekers and the long-term unemployed, 240 for senior management, and either side can end it with little formality. After that, dismissal requires a legal ground and a procedure, and compensation runs at 14 days of base pay per complete year of service.
Should I use an employer of record instead?
It is a reasonable way to test a market before you commit to an entity, and a poor way to run a team you intend to keep. You pay the statutory cost plus the provider margin, you do not build the employment relationship yourself, and if the role works out you migrate the person to your own payroll later with their seniority intact. Decide on whether this is an experiment or a beachhead.
We run the payroll, and the deadlines run themselves
Employer registration, the contract, the Social Security declaration, the insurance, occupational health and the monthly confirmation — set up once and then kept. Including the migration to the new contributory model, which stops being optional on 1 January 2027. Tell us the role and the salary and we will send the real monthly figure before you make the offer.