Employment in Madeira is governed by Portuguese labour law, with a few regional differences. This guide covers the points an employer should settle before the first hire.
Contracts
Portuguese law recognises permanent contracts and several fixed-term forms, each with limits on duration and renewal. Put the contract in writing, state the role, pay, hours and place of work, and keep a signed copy. A lawyer or accountant should check the contract type before you sign it, because the wrong form can be reclassified as permanent.
Social security
- The employer’s contribution is 23.75% of gross pay.
- The employee’s contribution is 11%, withheld from pay.
- Both are declared and paid to Segurança Social each month.
The employer registers the company and each employee with Segurança Social before work starts.
Minimum wage
The national monthly minimum wage for 2026 is €920. Madeira sets a higher regional figure: €980 a month from 1 January 2026, under Regional Legislative Decree 1/2026/M. It is reviewed every year, so check the current decree before you set pay.
Other obligations
- Work accident insurance is mandatory for employees.
- Payroll tax withholding (IRS) is applied to salaries and paid to the Tax Authority.
- Holiday and Christmas pay are statutory entitlements, and employees are also entitled to holidays and public holidays, including regional ones in Madeira.
- Health and safety duties apply from the first employee.
Hiring non-EU workers
Workers from outside the EU generally need a work-related residence permit or visa. Start the process well before the planned start date, and check the current rules with the immigration authority.
Official and primary sources
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