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Overview of Portugal

Portugal lies next to Spain on the Atlantic coast. It is the oldest nation state in Europe and was the first global empire in the World due to its many famous explorers. It has a population of 10.28 million and its main language is Portuguese. Portugal is ranked 42nd in the world economy. Lisbon is the capital of Portugal ans is older than Rome. Portugal is known for its great seafood and wines. It is also the largest cork producer, producing about 70% of the world’s exported cork.

Getting down to business in Portugal takes time. For a business meeting, the host is on time but the participants are usually 5 to 30 mins late. At initial meetings, the Portuguese want to get to know one another and not rush things. A lot of relationships are built over time and over preferably face-to-face contact.

Currency of Portugal

  • Euro

Health Insurance and the Social Security system of Portugal

The public health system in Portugal is called Segurança Social. It is subdivided into 3 systems: Previdencial (Welfare), Solidariedade (Solidarity) and Protecção Familiar (Family Support). The contributions to it are shared by the employer and the employee.

The welfare subsystem covers the following: sickness, maternity, paternity and adoption, unemployment, invalidity and old age.

The solidatory subsystem provides support in proven situations of personal or family need.

The family subsystem prvides support in instances of increased family expenditure for example in the case of disability or dependency.

An additional note for the employer – one has to have an extra policy covering occupational accidents. The public social security does not cover this.

Employer cost of Portugal

The cost for an employer to hire someone in Portugal is a plus of 23.75% to the gross salary.

Salary and bonuses of Portugal

Regular employees are paid once a month.

In Portugal employee’s are entitled to a 13th and 14th month salary – to be paid in June and December (Holiday and Christmas bonus).

Public Holidays in Portugal

In Portugal there are 13 public holidays with Carnival being an optional one.

  • January 1st – New Years Day
  • Carnival – usually 47 days before Easter Sunday
  • Good Friday
  • Easter Monday
  • April 25th – Freedom Day
  • May 1st – Labour Day
  • May/June – 60 days after Easter Sunday – Corpus Christi
  • June 10th – Portugal Day
  • August 15th – Assumption of Mary
  • October 5th – Republic Day
  • November 1st – All Saints Day
  • December 1st – Restoration of Independence
  • December 8th – Immaculate Conception
  • December 25th – Christmas

Working Hours in Portugal

Regular work hours in Portugal are between 9am and 6pm. There is no tradition of Siesta in Portugal.

The regular work week consists of 40 hours, 8 hours a day.

Overtime is paid as follows:

  • the first hour of overtime is compensated with a plus of 25%.

  • every subsequent hour is paid with a plus of 37.5%

  • If the overtime occurs during a bank holiday or on the weekend, it is compensated with a plus of 50%.

Vacation in Portugal

In Portugal one receives a minimum of 22 days of vacation a year. One is entitled to these as soon as ones employment contract starts.

Sick Leave in Portugal

To be eligible to receive compensation while one is sick, one has to have contributed to social security in Portugal for at least 6 months (may or may not be consecutive).

The first 3 days of the sickness are seen as a waiting period. These are not paid. The only exception here is if one is hospitalized or goes into surgery in which case the sick leave gets paid from the first day onwards.

When one falls sick, one has to go get a temporary invalidity certificate (CIT) from the medical doctor. This is transmitted to social security, the employer and the employee.

For the first 30 days of his illness, an employee receives 55% of the basic value of his salary. Between the 31st and the 90th day of being sick, one receives 60% of the basic value of his remuneration. Between the 91st and the 365th day, one receives 70% of the basic value of his remuneration. After 365 days, one receives 75%. The amount of sick leave one can take in Portugal is defined by social security at 1095 days.

Termination/Severance in Portugal

In Portugal one has to have cause to dismiss an employee. The cause can either be subjective (for example serious misconduct of the employee) or objective ( for example company going out of business, collective dismissals). To be able to dismiss an employee, one needs to issue a written communication.

If an employee is still in their probationary period, the notice period is as follows: if the employee has worked between 61 and 120 days, its 7 days notice. If he has worked more than 120 days, its 15 days notice. If one is terminating a fixed contract, one needs to give 8 days notice. For a non-fixed contract, if the employee has worked for the company for less than 6 months, its 7 days notice. If the employee has worked for the company between 6 months and 2 years, its 30 days notice. If the employee has been working for the company for more than 2 years, its 60 days notice.

Severance pay must be paid if the employee is in a non-fixed term contract. If the employee is terminated within the first 3 years, he receives 18 days of severance pay. After 3 years, he receives 12 days of severance pay. If an employee receives a dismissal during the probation period, he does not have a right to severance pay.