16 October 2013: Employment Contracts in Portugal

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25th September 2013
23 October 2013: Income Tax in Federation of Bosnia and Herzegovina
23rd October 2013

Severance Payment Fund applied to New Contracts from 1 October 2013 –

Compandben’s Payroll and Employment Partners in Portugal –


A new regulation has been approved in Portugal that defines a new manPortugal flagdatory contribution to be charged to the employer for new contracts signed after 1st October 2013 (Lei nº 70/2013, de 30 de Agosto).

This contribution will be paid to a Fund covered by Social Security (Fundo de Compensação do Trabalho) that can be actuated if the employee is dismissed and has the right to severance (for cases of collective dismissal, extinction and end of temporary contract).

The purpose is to assure to the employee the right to receive his severance. However, if the amounts are not used when the employee leaves the company they are returned to the employer.

For New Contracts signed after 1st October 2013:

Employer Costs will be the gross amounts plus social security contribution and Fund of Severance:

  • Gross Salary
  • Employer Contribution for Social Security – 23.75%
  • Compensation Fund – 1% applied to base salary and seniority

As this new law will have impact in the October payroll, as long as there are new admissions, it is important to know what are the new obligations:

  • To enroll the company
  • To enroll the employees who have signed contracts since 1st October 2013
  • To pay contributions the declaration with reference to pay is issued after 10th of the following month and has to be paid between 10th and 20th
  • To manage these situations online-access to a dedicated area (to be advised) will be required.

We emphasize that this is initial information about this subject and may need to be updated.

This information was contributed by Patricia Isabel Nunes Dias for Compandben’s client service in Portugal.

Contact Compandben or visit Compandben Main Website – International Payroll HR Services – Portugal

John Tinsley

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