Companies expanding their international operations into Portugal open a wealth of opportunities for expansion throughout the European Union and further afield.
Challenges come alongside the potential benefits, however. Payroll management is among those challenges, whether your company is considering moving employees abroad or hiring new staff in-country. Employment laws, payroll and income tax regulations are areas where you cannot afford mistakes.
If a foreign company wants to operate commercially in Portugal without running payroll or opening a subsidiary, it is legally required to at least open a branch (sucursal) or another permanent local establishment (representaço permanente).
Taking the step of opening a subsidiary before running payroll in Portugal requires an in-depth knowledge of employment and taxation laws – and keeping up to date with changes.
However, there is another and simpler route. Bradford Jacobs’ will navigate around these potential pitfalls effectively and efficiently. We recruit the staff in-country and then put into action our comprehensive knowledge of tax and payroll regulations. As part of our service, Bradford Jacobs files returns, and remits associated payments for tax and social security contributions directly from our payroll system to the relevant authorities.
Outsourcing your payroll in Portugal will streamline your operations by dealing with the following:
- Obtaining employees’ Social Security Identification Number (NISS) from the Social Security Institute (Instituto de Segurança Social) within 24 hours of starting work.
- Registering with the relevant local social security office, as different funds may apply depending on the occupation and province where they work.
- Registering with the Portugal Tax and Customs Authority (Autoridade Tributária e Aduaneira, AT) to obtain their Tax ID Number (Número de Identificaçăo Fiscal, NIF) and tax card.
- Obtaining company tax code (Numero Fiscal de Contribuinte) from the local office of the Director General of Taxes (Direcçao-Geral dos Impostos).
- Providing photocopy of Citizen’s Card, ID Card, or passport for local employees.
For foreign employees, extra requirements and procedures include:
- Providing a valid passport.
- Providing Residency Card (Cartão de Residencia) from the Immigration and Borders Service (Serviço de Estrangeiros e Fronteiras, SEF).
- Photocopy of residence permit.
- Employment contract verified by employer and identifying the employer’s legal representative.
- Photocopy of individual’s social security document from home country, with registration number.
- In the case of non-European Union citizens, a photocopy of their work visa.
- Completed foreign workers’ identification form.
Additional payroll support includes:
- Calculating employees’ monthly salary and sending their pay slips, including for mandatory 13th and 14th month salary payments.
- Submitting employees’ and employers’ wage tax returns.
- Creating and submitting your company’s annual accounts and year-end statements.
- Creating payment schedules for salaries and any insurance contributions.
- Ensuring accurate personal income tax returns are filed for you and your employees.
