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Are you curious about the Portuguese workforce? With its vibrant culture and unique history, Portugal is a fascinating place to explore. From the economy to the labor market, there are many interesting aspects to discover.

In this blog post, we’ll be highlighting 10 facts about the Portuguese workforce that you may not know. From the country’s high employment rate to the importance of education in the workforce, we’ll uncover some intriguing insights into the Portuguese labor market. So read on to find out more about the Portuguese workforce!


Lowest unemployment rates in Europe

The Portuguese workforce has achieved one of the lowest unemployment rates in Europe, coming in close to the average EU rate of 6%. This is particularly impressive when compared to their closest neighbour, Spain, who have an unemployment rate of 12%. This positive job market can be attributed to a number of factors.

Firstly, the Portuguese government have invested heavily in job creation initiatives, with a particular focus on technology and start-up companies. Furthermore, many businesses are choosing to open their doors in Portugal, taking advantage of their favourable corporate tax laws and incentives for hiring new employees.

It’s also worth noting that the country’s booming tourism industry has had a large impact on job availability in Portugal. The sector accounts for 10% of the total workforce, making it a major driver of employment in the country. With unemployment figures remaining low despite the global pandemic, it’s clear that Portugal is doing something right when it comes to its workforce. As the nation continues to invest in creating new job opportunities and nurture its vibrant tourism industry, there is every reason to believe that this trend will continue.


The majority of workers are employed in the service sector

When it comes to employment in Portugal, the service sector dominates. According to the most recent figures from the Portuguese Institute of Statistics, nearly three-quarters of Portuguese employees are employed in the service sector. This means that the vast majority of Portuguese workers are engaged in occupations related to sales, food services, administrative support, education, health care, and other services.

This trend is reflective of the current economy in Portugal as a whole. Although the manufacturing and agricultural sectors are still important, the service sector has grown significantly in recent decades, with many businesses providing services both domestically and to foreign customers. This has helped to create a more diversified economic base in Portugal and contributed to the country’s overall growth.

As the Portuguese workforce continues to evolve, it’s important to understand the sectors where employment opportunities are the most plentiful. The service sector has consistently been the leader in terms of employment for Portugal, providing jobs for millions of people across the country. With a strong focus on innovation and entrepreneurship, Portugal is well-positioned to continue growing its service sector in the years ahead.


Minimum wage is relatively low

When discussing the Portuguese workforce, one of the most important factors to consider is the minimum wage. Portugal has a relatively low minimum wage compared to other European countries; currently it stands at €760 per month (since January 2023), before taxes. Although this may seem low in comparison to other European countries, Portuguese citizens are still able to maintain their quality of life on this amount.

The country’s lower minimum wage helps to keep prices of goods and services relatively low in comparison to other European countries, allowing Portuguese citizens to make the most of their wages. This lower cost of living can be beneficial for employers who may not be able to afford higher wages, as they can access a larger pool of qualified applicants. It can also benefit those who wish to pursue more entrepreneurial projects, as they can access a larger customer base due to lower costs of products and services.

Overall, despite the relatively low minimum wage in Portugal, citizens are still able to enjoy their lifestyle and pay for all necessary expenses with relative ease. The low cost of living helps to ensure that residents can get the most out of their earnings, and businesses can benefit from having access to a larger pool of potential customers.


Hours worked per week

It’s no secret that Portuguese workers are often paid much lower wages than their European counterparts. However, despite this, the hours worked per week by the Portuguese workforce is pretty similar to the EU average. According to a recent survey, the average Portuguese worker spends 39.59 hours each week at their job, which is close to the European Union average of 40.6 hours.

So why are Portuguese workers so committed to their roles? One theory is that they are making up for low wages with extra hours. Another reason could be the relaxed attitude in the workplace; the Portuguese often take a few breaks throughout the day to enjoy leisure activities with their colleagues, as well as only having one lunch break.

It is evident that while Portuguese workers are willing to put in extra hours to make ends meet, employers need to ensure that their employees are not working themselves too hard. By taking into consideration the long-term consequences of excessive working hours, both employers and employees can benefit from a better work-life balance.


The average worker earns relatively low wages

Despite earning lower wages, Portuguese workers benefit from a range of subsidies and benefits. For instance, lunch subsidies are provided to employees to cover the cost of lunch. This subsidy amount varies from €5 to €8 per day depending on the number of hours worked. Additionally, Portuguese workers are also entitled to travel benefits. Depending on the company’s policy, an employee can receive up to 75% reimbursement of the expenses incurred while traveling for business purposes.

These benefits help to offset the low salaries earned by Portuguese workers and make their work more attractive. Furthermore, Portugal also has one of the highest quality of life ratings in Europe, meaning that workers enjoy a good balance between work and leisure activities. This further adds to the overall quality of life enjoyed by Portuguese workers.


The gender pay gap is relatively high

It is no secret that the gender pay gap is still an issue in many countries. Portugal, however, stands out when it comes to this issue. According to a recent study, Portugal has one of the highest gender pay gaps in the European Union, with women earning an average of 13.3% less than men for the same job. This gender pay gap could be attributed to a number of factors, such as the fact that many men in Portugal are still employed in professional and higher-paying roles, while women often remain in traditionally lower-paying jobs.

Additionally, some women in Portugal remain at home to take care of the household and their families, instead of working outside of the home. This could also contribute to the disparity between male and female wages in Portugal.

It is clear that more needs to be done to close the gender pay gap in Portugal and ensure that women are being paid fairly for the same job as men. Whilst it’s encouraging to see that countries like the United Kingdom are taking steps towards closing this gap and fighting against this difference. It is important that other countries, including Portugal, follow suit and put measures into place to ensure gender equality in terms of pay.


There is a relatively high rate of temporary employment

It’s no secret that Portugal is a popular tourist destination, but there is also an increasing number of people relocating to the country in search of employment opportunities. However, what many may not know is that the Portuguese workforce is comprised largely of temporary employment contracts.

Though permanent employment contracts are becoming more common in recent years, the majority of Portuguese workers still choose to have temporary contracts. This could be for various reasons. For one, a temporary contract can give workers the opportunity to gain skills across different companies, or to simply explore different fields before settling on a career path. On the other hand, with Portugal’s influx of tourists, there is also a need for temporary workers to fill gaps in the labour market.

In addition to this, the Portuguese government has made it easier for companies to hire temporary workers, due to lower taxes and social security payments associated with temporary contracts. This has enabled employers to hire more workers while ensuring they remain cost-effective.

Overall, the prevalence of temporary employment contracts in Portugal indicates that the country is heading towards a more flexible job market that can cater to both locals and those from abroad. It is an exciting time for anyone looking for work in Portugal and a great opportunity for those looking to make their mark on the job market.


The rate of self-employment is relatively high

The rate of self-employment in Portugal is surprisingly high. It could be due to the increasing number of tourists who visit the country and choose to become freelancers so they can work for an international company from wherever they are. This provides them with a number of advantages, including tax advantages, as well as the freedom to work from any location.
Self-employment also offers greater control over a worker’s income, which can be beneficial for many people. In addition, freelancers often have the opportunity to work with a variety of clients, allowing them to gain valuable experience in their chosen field.

Despite these advantages, it is important for those considering self-employment in Portugal to research the local laws and regulations to ensure that they are compliant with all applicable rules and regulations. In addition, Portuguese freelancers should consider setting up a business bank account to keep their finances separate from personal expenses.

With the right preparations, self-employment in Portugal can be a rewarding and lucrative career choice. As the country continues to welcome more tourists every year, there are plenty of opportunities for entrepreneurs and freelancers to take advantage of.


The rate of part-time employment is relatively low

When it comes to the Portuguese workforce, one thing that may come as a surprise is the rate of part-time employment. In Portugal, only about 6.9% of employed persons work part-time, compared to an average of 21.0% in other European Union countries. This low percentage of part-time employees could be attributed to several factors, but one of the most likely explanations is the country’s traditionally male-dominated workforce.

The gender gap in the Portuguese labor market remains wide, with men outnumbering women in both full and part-time employment. This means that many men feel obligated to take on full-time jobs in order to provide for their families. This preference for full-time employment has naturally led to a low rate of part-time employment in Portugal.


The rate of underemployment is relatively high

When talking about the Portuguese workforce, one of the most surprising facts is that the rate of underemployment is relatively high. This means that many people are only able to find work that does not require their full range of skills, or where they have to take on additional tasks in order to meet their financial needs.

This could be because international companies are beginning to migrate to Portugal and hire employees without having a full understanding of what skills they possess. Additionally, the low minimum wage could be discouraging people from using all of their skills for a job unless they are getting adequately compensated.

As a result, those who are underemployed may be unable to reach their full potential, as their skills go unused or underutilised. This means that potential employers may not be able to get the most out of the Portuguese workforce and thus hindering the country’s economic development. Therefore, it is important for employers to understand the skills and capabilities of the Portuguese workforce and adjust their expectations accordingly. This will enable them to get the most out of their employees and create more meaningful opportunities for people in Portugal.


How RHJ Accountants can help

There are lots of factors to take into consideration when hiring Portuguese employees. And seeming as you must have a certified accountant in Portugal, we can help you setup all the correct processes for your employees. Alongside our expert accountants, we have a team of lawyers who can produce contracts and legislative documents for your employees to follow.

If you would like our help in setting up, or expanding further into Portugal don’t hesitate to visit our Incorporation Services page or just simply contact us today to arrange a free consultation.

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💬 PSA: between April & June our Portuguese team have limited meeting availability due to the Tax Return Submission Period 🇵🇹