Following the publication of the State Budget for 2017 we inform you of some of the news with impact in payroll and that are already in force since 1st of January:
1. Twelfths (Duodécimos)
According to the Law 42/2016 of 28th of December the twelfths regime is extended in 2017.
We remind you that the twelfths regime was approved in 2013 by the Law No. 11/2013 of 28th of January and establishes the payment of half of the holiday and Christmas allowances divided by the 12 months.
For permanent employment contracts this regime can be excluded if the employee expressly declares it within 5 (five) days from the date of the law entry into force, this is until the 06th of January. This communication can be done by e-mail. If it exists an agreement between the parties the permanent contracts can also remove the duodecimal regime after 6th of January.
For fixed-term contracts and temporary work contracts, this scheme applies only if there is a written agreement between the parties.
2. New Minimum Wage
According to the decree law 86-B/2016 of 29th of December the minimum wage is updated from 530€ to 557€ starting on 1st of January 2017.
3. Extraordinary rates
The Extra Tax Rate maintains in 2017 but will be subject to a progressive reduction, according to the following schedule:
4. Meal allowance
The increase of €0, 25/day in the meal allowance of State employees results in an increase in the limit of the tax exemption for the meal allowance to private employees. Therefore, the new IRS exemption limits planned for 2017, are as follows:
5. – Increase of the IAS (Social Support Indexation)
By the Ministerial Ordinance 4/2017 of 3rd of January, the amount is updated to 421, 32€ for 2017.
6. New Withholding Tax Tables in 2017
Published in decree nº 843-A/2017 and 843-B/2017, of January 13th, are the new IRS Tax and Extra Tax rates to be applied in the monthly payroll.