Portugal Payroll Services

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Portuguese Payroll

Successful international expansion depends on making the right moves from day one. This is essential for foreign companies establishing a presence and operating payroll in Portugal. The Portuguese are long-term members of the European Union (EU), having joined in January 1986, and joined the Schengen Area in March 1995. Portugal adopted the Euro as its currency in January 1999.

Bradford Jacobs’ Professional Employer Organization (PEO) and Employer of Record (EOR) platforms and networks provide complete answers to every question your company will encounter before you move into Portugal’s economy.

Our teams step in from day one. If we locate the talent in Portugal, we ensure they comply with necessary registration procedures for social security and taxation. Our payroll specialists at Bradford Jacobs remove the concerns of complying with taxation, payroll, and employment laws to safeguard your expansion objectives.

Handling tax filing, payroll regulations, social insurance and employee rights in Portugal’s employment market adds up to a testing workload. Failure to ‘get it right’ risks fines and other sanctions – and there are also EU directives to deal with.

What Portuguese Payroll Options are available for Companies?

Remote payroll: This option allows businesses to operate under a single payroll system, by adding employees in Portugal to your company’s payroll. However, these employees must operate under different regulations, which is likely to cause problems.

Internal payroll: You may operate payroll for your staff if you open a subsidiary, especially if you are committed to growing your company’s presence in Portugal. However, this does require hiring dedicated HR staff who understand Portugal’s employment and compliance laws.

Portugal payroll processing company: If you are considering outsourcing, then working with a Portugal payroll company will help in processing your payroll – but not when it comes to compliance.

Portugal payroll outsourcing: However, there is another option available that solves both concerns – by working with Bradford Jacobs. We can handle payroll and compliance for all your employees in Portugal. We lift the administrative stress from your shoulders so you can focus on what you do best.

Portuguese Payroll Services

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

What is required to set up Portuguese Payroll?

Companies planning to run payroll by establishing a legal entity subsidiary in Portugal have the choice of forming a private limited liability company, a Sociedade por Quotas or LDA with at least two shareholders. They do not own shares, but ‘quotas,’ which are detailed in the company’s Articles of Association and represent the capitalization.

Requirements for setting up and running payroll for staff in Portugal include:

  • Registering with the relevant local social security office to obtain employees’ Social Security Identification Number (NISS) from the Social Security Institute (Instituto de Segurança Social) within 24 hours of starting work
  • Obtaining company tax code (Numero Fiscal de Contribuinte) from the local office of the Director General of Taxes (Direcçao-Geral dos Impostos)
  • Obtaining employees’ Tax ID Number (Número de Identificaçăo Fiscal, NIF) and tax card by registering with the Portugal Tax and Customs Authority (Autoridade Tributária e Aduaneira, AT)
  • Providing photocopy of Citizen’s Card, ID Card, or passport for local employees

If companies have foreign employees on their payroll, additional requirements apply, including:

  • 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