Employer guide to parental leave and compensation in Portugal

In today’s global workplace, family-friendly policies are more than a perk—they’re a legal requirement in Portugal. Getting parental leave right helps you build trust with employees and stay onside with local laws.

This guide provides a complete runthrough of maternity, paternity, and shared leave entitlements, compensation frameworks, and employer obligations. It also outlines how a Portuguese Employer of Record (EOR) can streamline compliance, particularly for companies without a local entity.

Parental leave under Portuguese law

Parental leave under Portuguese law provides robust protections for employees, ensuring time off for maternity, paternity, and shared caregiving responsibilities. The law distinguishes between initial parental leave that is typically taken immediately after birth or adoption, and extended or shared leave options that allow flexibility between both parents.

During these periods, employees are entitled to job security and protection from dismissal, making it unlawful to terminate employment based on pregnancy or leave status. The system also includes compensation funded by Social Security, relieving employers of direct salary responsibility while maintaining benefits and rights. This legal framework supports both family well-being and workplace compliance.

Maternity leave entitlements

In Portugal, employees are entitled to 120 or 150 consecutive days of maternity leave, which may begin up to 30 days before the expected birth. This leave is fully paid, with compensation generally set at 100% of the employee’s salary, funded by Social Security rather than the employer.

To initiate maternity leave, employees must provide a medical certificate and notify their employer in advance. Employers play a key role in the process by certifying the employee’s work status and salary for Social Security purposes.

Any delay or failure to submit accurate documentation can result in the postponement of benefit payments. It may lead to legal or financial penalties for the business, underscoring the importance of timely compliance.

Paternity leave entitlements

Fathers are entitled to 20 mandatory working days of paternity leave, plus an optional five additional days. These must be taken around the time of birth, and the employer is required to update payroll and Social Security filings accordingly.

Payment is funded by Social Security, meaning the employer deducts contributions but does not bear the cost of the leave directly. Accurate record-keeping ensures smooth processing and maintains legal compliance.

Shared & extended parental leave

Portuguese law offers flexible options for extended or shared leave. Parents can choose to share their total leave entitlement or take additional unpaid or partially paid leave. These schemes are especially relevant for adoption, surrogacy, or premature births.

Employers must be prepared to manage flexible work arrangements, maintain job protection, and process documentation accurately in each case.

Employer responsibilities & compliance

To remain compliant, employers must uphold several key responsibilities:

• Protect job security: employees must be returned to the same or an equivalent role with the same salary and benefits.
• Facilitate the process by accurately accepting and filing all leave notifications and medical documents.
• Coordinate payroll: adjust pay, Social Security, and tax contributions to reflect leave periods.
• Support reintegration by implementing return-to-work plans and re-establishing working arrangements post-leave.

Failing to handle these responsibilities properly can result in legal action, fines, or damage to one’s reputation.

Government compensation framework

Under Portugal’s parental leave system, Social Security (not the employer) pays the leave benefits. While employers are responsible for deducting and submitting Social Security contributions, they do not directly fund maternity or paternity pay.

Instead, employees apply for benefits through Segurança Social, and the employer must certify employment status and salary history as part of the claim process. Accurate payroll reporting and documentation are essential to avoid delays in payment or administrative penalties. Although the financial burden rests with the state, employers remain legally accountable for supporting the application process and maintaining correct records during the employee’s parental leave.

How a Portuguese EOR simplifies compliance

A Portuguese Employer of Record can manage the entire parental leave workflow, making this easier for companies without a legal presence. Through an EOR:

• Employment contracts are fully compliant with leave provisions and protections.
• Payroll and filings are handled in-house, ensuring accurate Social Security and tax contributions.
• Leave tracking is automated, and notice periods are correctly managed.
• Government certification is prepared, minimising errors in benefit applications.
• HR support provides clear policies and reintegration planning.

For example, A UK-based health tech startup hired a remote developer in Lisbon without setting up a local entity. When the employee applied for paternity leave, the company didn’t fully understand Portugal’s Social Security procedures or documentation requirements.

By partnering with a Portuguese Employer of Record, the startup ensured the leave was processed correctly, salary certification was submitted on time, and the employee received his full benefits without delay, while the company remained compliant and focused on core operations.

For companies hiring in Portugal without a local entity, an EOR provides an end-to-end compliance solution while preserving operational efficiency.

Best practices for managing parental leave

Managing parental leave effectively in Portugal requires more than just legal compliance – it demands proactive planning, communication, and accurate administration. By implementing thoughtful procedures, international employers can support their team members during this critical life stage while minimising risk and disruption to business operations.

• Establish clear policies on your intranet or HR platform, outlining entitlements and processes.
• Train line managers to handle requests sensitively and effectively.
• Use payroll systems that integrate leave tracking with Social Security filings.
• Keep detailed records of notifications, contracts, and hours worked.
• Build a plan for return to work, including phased hours and performance reviews.
• Consider an EOR partner to ensure legal compliance and reduce administrative burden.

Adopting these best practices not only ensures your business compliance with Portuguese law but also fosters a supportive and inclusive workplace culture that supports employees balancing work and family.

Parental leave done right

Portugal’s parental leave rules offer strong employee protections and substantial support, but they also place administrative demands on employers. From maternity leave entitlements and paid paternity days to flexible shared leave options, compliance requires careful coordination between HR, payroll, and legal teams. Partnering with a Portuguese Employer of Record ensures your business honours employee rights without needing a local entity, while streamlining payroll, documentation, and return-to-work processes. If you’re hiring in Portugal, consider an EOR solution to manage these legal obligations efficiently, and with peace of mind.

Hiring in Portugal and need help managing parental leave? Contact us to discover how a Portuguese Employer of Record can ensure full compliance and streamline leave administration.