The "Agenda for Decent Work" ("Agenda para o Trabalho Digno" in Portuguese) was approved by the Portuguese Parliament on 10 February 2023 (with only Socialist Party (SP) votes), and it is estimated that the new rules will come into force on 1 April 2023.
Portugal intends to tighten its legislation in particular on undeclared domestic work.
What's new from 1 April 2023?
- Individuals will have 6 months to declare their domestic workers to the social security and pay the corresponding contributions.
- The criminalisation of undeclared work will apply to both companies and individuals.
- Offenders will face up to three years in prison or a fine of up to 360 days.
- The declaration of the domestic worker to the social security system must be made within 6 months of employment, by e-mail or by post, and implies the payment of the corresponding contributions, even if the work performed is only for a few hours in a week.
Summary of the employer's obligations towards the domestic worker to date:
- In addition to the agreed remuneration, the following must be taken into account:
social security contributions,
holiday and Christmas bonuses,
and accident insurance.
- Whether they work full time or only a few hours a week, all domestic workers are entitled to social protection.
- Domestic workers must have an employment contract. The contract must contain the identification of the employer and the employee, the duration of the service, the tasks, the place where the work is carried out, the amount of remuneration and the rules concerning holidays and holidays. The contract must be signed by the employer and the employee, who must keep a copy. The salary can be agreed per hour, day, week or month.
- The holiday bonus and the Christmas bonus are equal to the monthly salary.
- The employer must also take out accident insurance, which covers accidents suffered by the domestic worker during work or on the way to and from work, among other things.
- Another administrative obligation is the filing of Form 10 (Modelo 10), via the Finance Portal (AT Portal das Finanças), before 24 February, declaring the amounts paid to the employee during the previous year, as well as the contributions paid to social security and, if applicable, the deductions made for income tax purposes (IRS).
- How is the payment of social security contributions calculated?
This depends on the type of earnings declared. It may be monthly, daily or hourly, but the rate payable is always 28.30%, of which 18.9% is the employer's share and 9.4% the employee's share.
The contribution must be paid between the 10th and 20th of each month for work done in the previous month. You can pay it at social security offices, through your bank's home banking service or at cash machines (Multibanco).