With the aim of providing COVID-19 support and guaranteeing the “defense and promotion of adequate salaries and decent incomes”, the Portuguese Government has recently announced labor updates with an impact on companies operating and investing in the country.

According to Decree-Law 109-B/2021 of 7 December 2021, the Portuguese monthly minimum wage will increase to €705 from 1 January 2022. In addition, the government has confirmed creation of an exceptional support scheme to compensate employers for the increase.

Employers, regardless of their legal form, and natural persons with one or more employees, are entitled to a monetary allowance of €112 per employee, paid at once by Agência para a Competitividade e Inovação (IAPMEI), or by the I.P Instituto do Turismo de Portugal. This is to be awarded to the employer for each employee who earned the 2021 monthly minimum wage (i.e. €665) in the December 2021 payroll return submitted to Social Security.

Employers will also receive an allowance of €112 for each employee who earned between €704.99 and €665.01 in the December 2021 payroll return submitted to Social Security, if the salary is determined by virtue of a collective bargaining agreement revised or amended in 2021 and, provided that, in December 2020, the declared base remuneration was lower than €665.00. For employees earning between €704.99 and €665.01 in the December 2021 payroll return submitted to Social Security who are not subject to collective bargaining agreements, the monetary allowance amount will be €56. Only employers with a regularized tax situation are eligible for this benefit.  

Employers identified by social security as eligible to receive the allowance will receive details of the IAPMEI and Turismo de Portugal electronic registration system, accessible through the respective websites, to collect additional information. This registration must be completed by 1 March 2022.

Auxadi’s Portugal experts are at your disposal to assist with this, or any other procedures related to payroll, accounting or tax management.

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Filipe Miguel Pedro Custodio
Payroll Services Manager

Local Knowledge – International Coverage

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All information contained in this publication is up to date on 2021. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.