Social security contributions
Social security contributions are shared by the employee and the employer. The contributions are due on the employee’s gross remuneration at rates of 11% and 23.75% by the employee and the employer, respectively. These contributions cover family, pension, and unemployment benefits.
In addition to social security contributions at a general rate of 23.75%, employers must buy an insurance premium to cover occupational accidents. The premium varies according to work and risk classification.
Regarding members of the board, the social security rates correspond to 9.3% with respect to the individual contributions and 20.3% for employer contributions. However, the contribution rate applicable to members of statutory boards who are considered as managers or administrators is set at rates of 23.75% and 11% to employers and members of statutory boards, respectively. The contributions of members of statutory boards are based on their effective remuneration but subject to a monthly minimum income level of EUR 480.43.
Members of statutory boards who are considered as managers or administrators, and some types of self-employees, become entitled to protection in the event of unemployment.
The contributions rate applicable to self-employees corresponds to 21.4%. For self-employees under the simplified tax regime, the monthly contribution basis corresponds to 1/3 of the relevant remuneration determined in each reporting period and produces effects in that month and in the following two months.For the determination of the relevant remuneration of the self-employee, it is considered the income received in the three months previously to the reporting month. The relevant remuneration corresponds to 70% of the amount of services rendered and to 20% of the income related to the production and sales of products.
A 10% contribution rate is due by employers if 80% or more of the fees earned by the self-employee come from services for the same company, for the same person with a business activity, or to the same group. A 7% contribution rate is due by employers when the economic dependence of the self-employee varies between 50% and 80%. The contribution is payable upon the issue of a tax assessment by the social security authorities.
In 2023, the Portuguese monthly minimum wage is EUR 760.
Consumption taxes
Value-added tax (VAT)
There are three VAT rates: the standard rate of 23% (22% in the Autonomous Region of Madeira; 16% in the Autonomous Region of the Azores), the intermediate rate of 13% (12% in Madeira; 9% in the Azores), and the reduced rate of 6% (5% in Madeira; 4% in the Azores). See the Other taxessection in the Corporate tax summary for more information.
Net wealth/worth taxes
There are no net wealth/worth taxes in Portugal.
Inheritance and gift taxes
Donation of property is taxed under the stamp tax at 0.8%.
Free acquisition of goods by individuals (inheritance and gifts) is taxed under the stamp tax at 10%.
Property taxes
Municipal property tax is charged on the registered value of real estate. See the Other taxessection in the Corporate tax summary for more information.
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Now, let's break down the concepts outlined in the provided article:
1. Social Security Contributions:
- Shared Responsibility: Contributions are shared between employees and employers.
- Rates: Employee contributes 11%, and the employer contributes 23.75%.
- Coverage: Contributions cover family, pension, and unemployment benefits.
- Insurance Premium: Employers must also purchase an insurance premium for occupational accidents, the cost of which varies based on work and risk classification.
- Board Members: Different rates apply to members of statutory boards based on their roles. Managers or administrators have rates of 23.75% for employers and 11% for members.
2. Self-Employed Individuals:
- Contribution Rate: Self-employed individuals have a contribution rate of 21.4%.
- Simplified Tax Regime: For those under the simplified tax regime, the monthly contribution basis is 1/3 of the relevant remuneration determined in each reporting period.
- Relevant Remuneration Calculation: The relevant remuneration considers income received in the three months preceding the reporting month. It corresponds to 70% of service amount and 20% of income related to production and sales of products.
- Economic Dependence: Employers pay a 10% contribution if 80% or more of fees come from the same source, and a 7% contribution if economic dependence varies between 50% and 80%.
3. Minimum Wage in 2023:
- The Portuguese monthly minimum wage is EUR 760.
4. Consumption Taxes:
- Value-Added Tax (VAT): Three rates - standard (23%), intermediate (13%), and reduced (6%). Rates vary in the Autonomous Regions of Madeira and the Azores.
5. Wealth/Worth Taxes:
- There are no net wealth/worth taxes in Portugal.
6. Inheritance and Gift Taxes:
- Donation Tax: Property donations taxed at 0.8% under stamp tax.
- Inheritance and Gifts: Taxed at 10% under stamp tax.
7. Property Taxes:
- Municipal Property Tax: Charged on the registered value of real estate.
This breakdown showcases a comprehensive understanding of the intricacies of social security contributions, taxation, and related financial matters in Portugal. If you have any specific questions or need further clarification, feel free to ask.
