Portugal isn’t just attracting digital nomads with its golden beaches, Lisbon’s vibrant culture, and pastel de nata — it’s establishing itself as a serious player in the remote work revolution.
While the country's Digital Nomad Visa gets plenty of press, there’s an even bigger story unfolding: Portugal has crafted some of the European Union’s most progressive remote work legislation, protecting local and international remote workers with comprehensive teleworking laws.
If you're employing remote workers in Portugal or considering it, understanding your legal obligations isn't optional — it's essential for staying compliant and building a successful international team.
Key takeaways:
- Portugal's remote work laws grant employees extensive rights, including expense reimbursements, the right to disconnect after hours, and special protections for parents with young children.
- Written telework agreements are mandatory and must specify location, schedule, equipment provisions, and reimbursement terms to ensure compliance with Portuguese employment law.
- Companies without a Portuguese entity face the risk of permanent establishment and must carefully navigate tax obligations when employing remote workers in the country.
What Counts as Remote Work in Portugal?
Portuguese law takes a clear stance on defining telework. Under current legislation, telework is defined as work:
- Performed under subordination to an employer
- Carried out in a location not determined by the employer
- Using information and communication technologies (ICT)
Recent changes have significantly broadened this definition to protect more workers, whether they work fully remotely or from home a few days a week. The previous requirement for "habitual" work outside company premises no longer applies. This means employees who split their time between home and office in hybrid arrangements are now covered under Portugal's telework regime.
The distinction between occasional and habitual telework still matters for specific provisions. Occasional telework typically involves temporary arrangements during unusual circumstances, whereas habitual telework follows a regular and predictable pattern.
However, both types of arrangements trigger specific employer obligations under Portuguese employment law that companies need to follow.
Key Remote Work Legislation in Portugal
Portugal's remote work journey began in 2009 with the enactment of the Labour Code (Law No. 7/2009). This legislation officially recognized telework as a legitimate employment arrangement and gave employees the legal right to request remote work arrangements.
The law also established that teleworkers should enjoy the same rights as their in-office counterparts, including equal pay, equal treatment, and equal opportunities.
But, let's be honest: the 2009 law was bare-bones. It provided a framework, but left countless details to individual negotiation between employers and employees. Many companies found themselves navigating murky waters, unsure about their specific obligations.
Then came the COVID-19 pandemic, and Portugal responded with Law No. 83/2021, which took effect in January 2022. This labor law wasn't just a minor update; it was a complete overhaul that positioned Portugal as one of the EU's most worker-friendly countries for remote employment.
The 2022 law dramatically expanded protections.
- Teleworking parents and caregivers received special considerations.
- Employers faced new restrictions on after-hours communication.
- Equipment and expense reimbursements became mandatory, not optional.
With this legislation, Portugal said, "If remote work is the future, let's make sure to do it right."
Compliance Risks When Hiring Remote Workers in Portugal
Here's where things get tricky — and expensive if you get it wrong. Now, all of the progressive telework protections discussed thus far apply exclusively to employees; self-employed independent contractors operate under entirely different rules. However, if someone works solely for your company, follows your schedule, uses your tools, and functions as an employee, Portuguese law will likely consider them an employee, regardless of the terms of your contract.
The distinction between employees and contractors in Portugal isn't just paperwork; it's a compliance minefield. Misclassify an employee as a contractor, and you're looking at back payments for social security, taxes, benefits, and potentially hefty fines.
Tax residency adds another layer of complexity. Non-resident remote employees living in Portugal may trigger local income tax obligations and mandatory social security contributions for your company. The current social security rate? A combined 34.75% (23.75% employer, 11% employee). That's not pocket change.
Without a legal entity in Portugal, you also run the risk of accidentally creating a permanent establishment. If Portuguese authorities determine that your remote workers constitute a permanent establishment, you could face corporate tax obligations on Portuguese-sourced income.
First-time employers in Portugal often find themselves overwhelmed by these interconnected compliance requirements; that's why many companies turn to local legal experts or partner with an Employer of Record to safely navigate these waters.
Remote Work Employer and Employee Agreements
Forget verbal agreements or casual email exchanges, Portuguese law demands written telework agreements, period. And these aren't simple documents that can be drafted and sent in five minutes; they require substance and specificity.
Your telework agreement must spell out:
- The exact work location: "Working from home" isn't enough. You need the specific address where telework will occur.
- Work schedule and hours: Specify standard working hours, flexibility parameters, and any core hours when the employee must be available.
- Duration and renewal terms: Is this a permanent or temporary arrangement? What's the review process?
- Professional details: Include job title, remuneration, professional category, and any supplementary benefits specific to remote work.
- Equipment and expense provisions: Who provides what? Who pays for what? How are reimbursements handled?
- Face-to-face requirements: Detail any mandatory in-person meetings, including their frequency and location.
- Type of arrangement: Full remote? Hybrid? If hybrid, which days are remote versus in-office?
If you miss any of these elements, your agreement may not be enforceable under Portuguese employment law. You could also face penalties for non-compliance with telework regulations.
Employee Rights Under Remote Work Laws
Portuguese remote workers enjoy strong protections that go well beyond those of many other EU countries. For example, employees can formally request remote work arrangements, and while employers can refuse, they must provide written justification based on legitimate business needs. Simply preferring employees in the office isn't enough.
Flip the script: Employers can request that employees work remotely, but workers can decline without providing a reason. No justification is needed, and no reprisals are allowed. Firing someone for refusing remote work? That's illegal termination territory.
Equal Rights and Protections
Remote employees maintain identical rights to office workers regarding:
- Pay and compensation structures
- Working conditions and schedules
- Health and safety protections
- Data protection and privacy
- Protection from occupational hazards
- Career advancement opportunities
But it goes further — employers must actively ensure remote workers aren't disadvantaged in any aspect of their employment.
Equipment and Training Obligations
Employers must provide or maintain:
- All necessary hardware (computers, monitors, keyboards)
- Required software and licenses
- Communication tools and platforms
- Ergonomic equipment, when needed
- Repairs and replacements when equipment fails
- Comprehensive training for any new tools or software
When a computer breaks down, it's the employer's responsibility to fix or replace it. When new software is rolled out, training is mandatory and provided by the employer.
Mandatory Expense Reimbursements
Expense reimbursements aren't optional. Employers must compensate for:
- Internet and phone costs
- Increased electricity bills
- Heating and cooling expenses
- Portion of rent if a home office is required
- Office supplies and materials
- Any other telework-related expenses
The exact amounts vary, but the obligation is non-negotiable.
Employee Responsibilities
Employees have their part to play, too. They must:
- Follow employer health and safety instructions for home offices
- Stick to agreed-upon working hours and schedules
- Use work equipment exclusively for professional purposes (unless authorized otherwise)
- Maintain confidentiality and data security standards
- Participate in required training sessions
- Report any equipment issues promptly
Health and Well-being Protections
Employers must provide health protections, including:
- Initial health assessments for all remote workers
- Periodic evaluations of telework's impact on physical health
- Mental well-being check-ins and support
- Eye examination costs for screen-based workers
- Corrective equipment or ergonomic solutions as needed
- Adjustments to working conditions based on health assessments
Yes, mental health is explicitly included. Additionally, Portuguese law rejects the “out of sight, out of mind” approach. Remote employees must receive the same access to health care resources and career development opportunities as those working on-site.
The Right to Disconnect
Portugal doesn't just suggest work-life balance, it legislates it. The right to disconnect isn't a nice-to-have company perk; it's legally mandated. Employers are prohibited from contacting employees outside working hours or during rest periods. There are no emails, no calls, and no "quick questions" on Slack.
The only exceptions are genuine emergencies or force majeure situations. And no, that urgent-but-not-actually-urgent project doesn't qualify as an emergency.
Violations aren't just frowned upon; they're fined. Companies can face substantial fines for violations, with penalties varying according to company size and the severity of the offense. Repeat offenders face escalating fines and potential legal action from employees.
However, it’s not just about compliance; it's about recognizing that constant connectivity leads to burnout, decreased productivity, and higher turnover. Portugal figured out what many countries are still debating — protecting employees' personal time is good for business.
Special Provisions for Parents and Caregivers
Portugal goes the extra mile for working parents. Employees with children up to three years old have an almost automatic right to telework, provided their job can be performed remotely. Does your employee have a child under eight? They still have preferential rights under certain conditions, such as being a single parent or if their partner doesn't qualify for telework.
Single-parent households receive additional considerations. The law recognizes their unique challenges and provides additional flexibility in telework arrangements. In households where only one parent's job allows telework, that parent receives priority consideration for remote work approval.
These aren't suggestions or best practices; they're legal requirements. Denying telework to an eligible parent requires substantial business justification, and even then, authorities may override employer decisions if they deem them unreasonable.
Practical Tips for Hiring Remote Employees in Portugal
Success with Portuguese remote workers starts with standardized, compliant contracts. Avoid adapting employment contracts from other countries. Portuguese requirements are specific and non-negotiable. Build templates that include all mandatory telework provisions from day one.
Expense reimbursement policies need a clear structure. Define calculation methods, submission processes, and payment timelines. Portuguese employees shouldn't have to chase reimbursements or argue about legitimate expenses. Make it systematic and transparent.
The right to disconnect requires more than good intentions — it necessitates operational changes. Train managers on respecting boundaries, implement communication protocols that respect off-hours, and consider technical solutions, like scheduled email delivery, to prevent after-hours disruptions.
Cultural awareness matters, too. Portuguese work culture values work-life balance, family time, and mental health. Managers accustomed to always-on availability might need to adjust. Regular check-ins about employee well-being aren't just nice, they're part of your health and safety obligations.
Here's the reality: managing Portuguese employment law, tax obligations, social security system contributions, and telework compliance while running your core business is overwhelming. That's precisely why many companies partner with an Employer of Record. An EOR handles the complex compliance landscape while you focus on building your team and growing your business.
Hire and Manage Portuguese Remote Workers With RemoFirst
RemoFirst enables companies to employ workers in 185+ countries, including Portugal, and manage contractors in 150+ countries, taking the compliance headache off your plate entirely.
As an Employer of Record, RemoFirst ensures compliance with every aspect of Portuguese employment law — from crafting legally sound telework agreements to managing tax contributions, paid time off, employee benefits, and complex expense reimbursements. When regulations change (and they almost assuredly will), RemoFirst adapts automatically, keeping you compliant without the scramble.
You get to build your dream team in Portugal while RemoFirst handles the intricate legal framework that makes it possible.
Ready to employ remote workers in Portugal without the complexity? Book a demo and see how RemoFirst makes Portuguese employment simple, compliant, and scalable.
