Last updated: 28 September 2026 · By Haider Shah, accounting technician in Portugal
Hiring your first worker, whether for a restaurant, a mini-market, a construction company or a sole-trader business, brings new obligations. Most fines come from small missing steps, so here is the full checklist.
1. Register as an employer with Social Security
If you have never had employees, you must register as an employer (entidade empregadora) in Segurança Social Direta. Companies are often registered automatically when they are created, but check this. Sole traders (recibos verdes) usually need to register themselves.
2. Sign a contract
Permanent contracts can legally be verbal, but always use a written contract. Fixed-term contracts must be written and state the reason for the fixed term. Contracts with foreign workers must also be written, and you must check and keep a copy of the worker’s valid visa or residence document.
3. Communicate the admission to Social Security
You must register the new employee in Segurança Social Direta no later than the start of the contract. You need the worker’s NISS. If they don’t have one, you can request it for them.
4. Work accident insurance
Every employee must be covered by work accident insurance (seguro de acidentes de trabalho) from day one. Ask any insurer for a policy based on your total payroll.
5. Occupational health and safety
You must organise health and safety at work (SST), which includes occupational medicine. Most small businesses hire an external company that does the risk assessment and the workers’ medical exams.
6. Payroll every month
- Pay the salary and give a payslip (recibo de vencimento)
- Withhold IRS using the official tables and declare it to Finanças in the monthly remuneration declaration (DMR), by the 10th of the following month
- Pay Social Security: 11% withheld from the worker + 23.75% paid by you
- Pay the holiday and Christmas allowances and grant 22 working days of holidays
7. Documents to keep at the workplace
- Work schedule map (mapa de horário de trabalho), posted where workers can see it
- Record of working time (registo de tempos de trabalho)
- Holiday map
- Copies of contracts, insurance policy and the SST contract
These are what the labour inspectorate checks first. See employer obligations: what ACT checks.
What about the compensation funds (FCT / FGCT)?
The FCT was closed and no longer receives contributions. FGCT contributions are suspended until the end of 2026. You do not pay either for new hires at the moment.
What does one employee really cost?
| Monthly gross salary | Employer Social Security (23.75%) | Total monthly cost (without insurance/SST) |
|---|---|---|
| €920 | €218.50 | €1,138.50 |
| €1,200 | €285.00 | €1,485.00 |
| €1,500 | €356.25 | €1,856.25 |
Remember this is paid 14 times a year, plus insurance, occupational health and any meal allowance.
Need help with this?
I run payroll, Social Security and employer paperwork for small businesses in Portugal. Send me a message and I’ll check what applies to you.
Contact meOfficial sources
- despacho.pt – Simplificação do ciclo contributivo 2026
- HR Portugal – O que muda na lei laboral e na Segurança Social em 2026
- despacho.pt – Fundo de Compensação do Trabalho em 2026
- CGD – Vai admitir um trabalhador?
- JE Advogados – Lei n.º 61/2025 and hiring foreign workers
This guide is general information, checked against official sources on 28 September 2026. Rules and portals in Portugal change often, so confirm the current rules with the official source before you act. It is not legal advice.
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