Hire in Spain vs Portugal: employment costs and compliance compared

1. Step 1

   Model the total cost in both markets

   Share the role, the salary range, and the location shortlist. Teamed models employer SS in Spain or TSU in Portugal against your salary mix and shows you the all-in monthly cost per employee in each market. You see the numbers before you hire, not on the invoice.

2. Step 2

   Issue a locally compliant employment contract

   Teamed issues the contract in Spanish or Portuguese, applying the relevant statutory minimums and the applicable collective agreement for your sector in Spain, or the Labor Code defaults in Portugal. Your new employee signs under local law with their statutory protections intact.

3. Step 3

   Run monthly payroll and remit contributions

   Payroll runs in euros each month. Teamed remits employer SS to the Tesoreria General de la Seguridad Social in Spain or employer TSU to the Instituto da Seguranca Social in Portugal. You receive one invoice with FX shown against the mid-market reference, absorbed at zero markup on the fee.

4. Step 4

   Ongoing support from real HR and legal experts

   When a question arises, a real HR or legal expert responds. No AI bot wall, no shared ticket queue. If your headcount grows to the point where your own entity beats EOR on cost, Teamed models the crossover month and sets up the entity via Global Entity & Employment Operations (GEMO) on the same system.

Frequently asked questions

• Do Portugal employer costs run lower than Spain?+

  On employer-side social contributions, yes. Portugal's TSU is approximately 23.75% of gross salary; Spain's total employer SS is approximately 29.9%. On a €60,000 gross salary, that's roughly €3,690 per year per employee in Portugal's favour, before sector premiums or collective agreement floors in Spain. At a team of five, the difference compounds to roughly €18,450 per year. Total employment cost also reflects the salary itself: Barcelona and Madrid typically command higher market rates than Lisbon and Porto for equivalent seniority. The lower contribution rate in Portugal can offset part of that, or you can pass some of the saving through as a more competitive gross salary.
• Do I need a legal entity to hire in Spain or Portugal?+

  No. Teamed is the Employer of Record in both countries, which means Teamed holds the legal employer obligations (contract, payroll, statutory contributions) while you direct the work. You don't need a Spanish Sociedad Limitada, a Portuguese Lda, a local director, a local bank account, or a local accountant to start hiring. If your headcount grows to the point where your own entity makes more financial sense, Teamed models the crossover and sets up the entity via Global Entity & Employment Operations (GEMO) on the same system, with no re-onboarding of existing employees.
• What is the notice period for employees in Spain and Portugal?+

  In Spain, the minimum statutory notice for objective (individual economic or organisational) dismissal is 15 days. Collective agreements often extend this, and Works Council consultation is required for collective redundancies. In Portugal, notice periods run from 15 days for employees with less than one year of service, up to 75 days for more than ten years of service, set by the Labor Code. Both countries require a formal hearing or notification before any dismissal proceeds. Teamed manages the process in each market.
• Is Portugal in the same time zone as the UK?+

  Yes, throughout the year. Portugal observes WET (Western European Time, UTC+0) in winter and WEST (Western European Summer Time, UTC+1) in summer, which aligns with UK time year-round. Spain runs one hour ahead of the UK (CET in winter, CEST in summer). For UK-headquartered teams, Portugal offers simpler live collaboration: 9am standups, end-of-day handoffs, and live debugging sessions all land at the same clock time without a one-hour offset.
• How does Spain's collective bargaining (convenios colectivos) affect hiring?+

  Spain's sector-specific collective agreements (convenios colectivos) are legally binding and set minimum salary floors, working conditions, and termination terms that apply above the statutory Labor Code baseline. Every employer in Spain must apply the relevant sectoral convenio for each employee's role. For example, an engineering hire typically falls under a technology or metalworking convenio. Teamed identifies the applicable agreement for your sector and ensures the employment contract and payroll meet its requirements. Portugal has collective agreements too, but they are less universally pervasive and a larger share of contracts run on Labor Code defaults.
• What severance applies if I need to let an employee go in Spain vs Portugal?+

  In Spain, unfair dismissal compensation is 33 days per year of service, capped at 24 months' salary. Objective dismissal (economic, technical, organisational, or production grounds) is 20 days per year of service, capped at 12 months. In Portugal, statutory severance for dismissal is 12 days per year of service, capped at 12 months' reference compensation. The difference in unfair-dismissal exposure is material at longer tenures: a five-year employee on €60,000 faces a Spain statutory claim of roughly €27,500 vs roughly €10,000 in Portugal. Both markets require formal process and documentation. Teamed manages both.
• Can Teamed hire in both Spain and Portugal on the same contract?+

  Yes. Teamed covers both countries under one master services agreement. You get one invoice per employee, one support contact, and one system from first hire through entity setup if the headcount warrants it. Adding a country to your Teamed footprint doesn't require a new commercial negotiation, a new vendor relationship, or a new onboarding process. Teamed models the employer cost for both markets and shows you the all-in figure before you hire.

• Spain vs Portugal for hiring: which has lower employer costs?+

  Portugal. Spain's total employer social security contribution is approximately 29.9% of gross salary; Portugal's employer TSU is approximately 23.75%. On a €60,000 gross salary, the gap is roughly €3,690 per employee per year. Barcelona and Madrid command higher market salaries than Lisbon and Porto for equivalent seniority, so the total employment cost gap is even wider in practice. Both markets are covered by Teamed's EOR service with no entity setup required. Portugal also shares the UK time zone, which reduces collaboration friction for UK-headquartered teams.
• Do I need a local entity to hire employees in Spain or Portugal?+

  No. An Employer of Record (EOR) like Teamed holds the legal employer obligations in both markets, so you don't need your own entity. Teamed issues the employment contract, runs monthly payroll, remits employer SS to Spain's Tesoreria General de la Seguridad Social or employer TSU to Portugal's Instituto da Seguranca Social, and provides ongoing support from real HR and legal experts. You direct the work; Teamed carries the local compliance. If your headcount grows past the EOR crossover point, typically 10 to 15 employees in most European markets, Teamed models that month and sets up your entity via Global Entity & Employment Operations (GEMO), with no re-onboarding of existing employees.