Payroll Services in Portugal: What You Need to Know (Plus Costs)
Doing payroll in Portugal isn’t different from everywhere else. Sure, taxes and their names vary, but, at its core, the process is very similar from one country to another. So, if you’re thinking of expanding your business, you should know some of the core tasks you need to look for in a payroll provider.
Both local and international companies can provide payroll services in Portugal, but they’re not the only ones. Accountants can provide those services, too. However, if you’re looking for an all-in-one solution, consider reaching out to a professional employer organization – like BRIDGE IN – who handles it all on your behalf.
Let’s now focus on the payroll services you should care about and their costs.
What You’ll Learn:
Payroll Services in Portugal: Meet the Ones Your Business Needs and How Much They Cost
What Are Payroll Services?
How Much Do Payroll Services in Portugal Cost?
What if I Ask an Accountant to Handle the Payroll? Is it Cheaper?
The Mandatory Benefits, Payroll, and Taxes Information
HR Administration Services
Labor Law Support
Payroll Services in Portugal: Meet the Ones Your Business Needs and How Much They Cost
It’s true it all depends on the kind of activity you provide. However, the general services and processes are very similar. First, you must understand these services and how they’ll benefit your business.
What Are Payroll Services?
Payroll services refer to managing employee compensation and benefits, which can be handled internally or through outsourcing. However, outsourcing doesn't necessarily limit a company to just payroll tasks.
Service providers like BRIDGE IN offer comprehensive HR management solutions – including Employer of Record (EOR) services, recruitment, employee onboarding, and payroll management. This approach allows companies to choose a more integrated service model, which reduces risks, optimizes times, and cuts costs.
Payroll services include multiple responsibilities, such as calculating everyone’s salaries, managing tax withholdings, handling deductions, and ensuring compliance with local labor laws.
Payroll services are mandatory in Portugal. But it’s up to you to decide if you’ll do it indoors or through outsourcing, an option that can save you time, money, and avoid fines. Having a professional dealing with each employee’s payment every month is a relief. That way, you can focus on expanding your business into the country.
How Much Do Payroll Services in Portugal Cost?
Here’s the answer you hate: it depends. As a business leader, you know that. The cost of payroll services varies depending on several factors, such as:
The size of your business
The payroll provider you choose
The number of people employed
The complexity of your payroll needs
Small businesses with fewer employees may find more affordable options, while larger companies with complex payroll structures might pay higher costs. According to Forbes, you should weigh your options by comparing the:
Base subscription fee
Setup and support fees
Taxes and compliance fees
Per-employee or per-transaction fees
Add-on fees for additional services or features
Payroll values vary according to the amount of particular services you need. Usually, if you do it indoors, it tends to be a bit more affordable. But then again, it all depends on your business needs. So, ensure your budget is aligned with that.
Plus, you should know something that happens with payroll companies: as the number of employees increases, the fees you pay for each reduce. So, keep that in mind when choosing payroll services in Portugal.
The overall cost varies, but you must ensure the essential payroll services – such as salary calculations, tax filings, respective payments, administration tasks, tailored benefits packages, and compliance management.
So, before picking the ideal provider, consider your specific payroll needs and assess the scalability scalability and team size.
What if I Ask an Accountant to Handle the Payroll? Is it Cheaper?
You’re free to do it. Accountants know their way around payroll, but that doesn’t necessarily mean it’ll be cheaper. As you ask them to add payroll tasks to their usual, they tend to charge higher fees.
Accountants doing payroll services in Portugal typically charge based on hourly rates or a fixed monthly fee. The hourly rates can range from €50 to €150 or more, depending on the accountant's expertise and location. Some may offer tiered pricing based on the complexity of the payroll tasks and the service frequency.
When hiring an accountant for payroll services, it's essential to discuss the specific requirements of your business and negotiate a transparent pricing structure.
Consider all your options first, but don’t discard the possibility of partnering with a payroll specialist (either an individual or a company). Besides helping you with your business’s core tasks, they can assist you from the minute you start onboarding employees. Not all accountants have that expertise and availability.
The Mandatory Benefits, Payroll, and Taxes Information
When building a team in Portugal, you need to worry about basic salaries and benefits, allowances, mandatory contributions, and payroll taxes. So make sure you remember the following when doing your overall math:
Employer payroll contributions: Social Security and Labor Accident Insurance.
Employee payroll contribution: Social Security (SS) and Personal Income Tax (IRS), which varies based on income, family situation (if married or not), and number of dependents (children).
Most common employee benefits: workers’ compensation, holiday pay, meal allowances, private health insurance, amongst others.
Additional employee benefits: these can include company cars, meal allowance cards, childcare vouchers, voluntary benefits, flexible benefits, workplace canteens, bike to work, and gym fees, amongst others.
Accident insurance: local labor laws establish that employees must pass a mandatory medical exam and have the right to Labor Insurance – covering accidents at work or during the commute.
Holiday pay: all workers are legally entitled to 22 paid holidays per year. In some cases – when collective labor agreements are in force – a higher period of paid holidays must be granted (typically 25 days).
Meal allowance: employers generally pay employees a meal allowance for each workday. Such value is fully taxable unless you pay it through a card or ticket; should this be the case, the allowance becomes tax-exempt up to a certain limit.
Hiring a team in Portugal isn’t straightforward, so ask for help if you need it. For instance, if you work with BRIDGE IN, you ensure an all-in-one service, ready to assist and guide you from the start. Besides handling everyday, essential payroll tasks, here’s what you can benefit from.
HR Administration Services
Spread through a wide range of essential tasks, like managing personal employee files, preparing employment-related documentation, and offering specialized HR consultancy – to ensure compliance with Portugal's statutory reporting and regulatory requirements. We tailor our services to meet the unique needs of your HR teams, providing a range of solutions designed for optimal efficiency:
HR Files Administration: we organize and maintain employees’ files, ensuring they meet statutory requirements.
Newcomers and Leavers Agenda: we handle the registration of new or departing employees with local authorities, provide administrative support during onboarding, prepare employment-related documents for new or leaving employees, and offer necessary training – such as for payroll processes.
Employment Documentation: we draft employment documents like contracts, amendments, and job descriptions, ensuring they align with Portuguese legislation.
Audits and Inspections: our team can assist you during audits and inspections, prepare supporting documentation, and resolve disputes.
Additional Consultancy: we provide consultancy on Portuguese personal income tax, health insurance, social security, non-residents, and global mobility issues.
Labor Law Support
Our HR administration and payroll services include extensive labor law support from our in-house legal team. They specialize in the following employment-related areas in Portugal:
HR Process Design and Implementation: creating and implementing internal HR processes, developing guidelines, policies, and procedures, and preparing a standard set of templates.
Employment Documentation Preparation: drafting employment contractual documents, including contracts, amendments, job descriptions, termination agreements, and liability for damage and material responsibility agreements, ensuring full compliance with Portuguese legal standards and best practices.
Employment Matters Resolution: handling various employment issues, such as work schedules and shifts, employment termination (including mass layoffs), working conditions, annual and parental leave, workplace health and safety, and employee benefits.
GDPR and Data Protection Consultancy: providing expert advice on GDPR compliance and personal data protection in Portugal.
When choosing the ideal payroll services in Portugal for your business, ensure you have all the information you need. Understand each provider’s services, evaluate the associated costs, and reach a decision based on your business needs. Don’t ignore the size of your company, the complexity of the payroll you need, the number of people you employ, and the expertise required. By doing that, you ensure 100% compliance with local regulations.
