Portugal – Salary and Statutory Deductions Policy

1. Purpose

The purpose of this policy is to outline the salary structure, mandatory deductions, and employer contributions applicable to employees based in Portugal. This policy ensures compliance with Portuguese labour laws and company standards.

This policy applies to all employment types, including full-time, contract, remote, internship, and short-duration contract employees.

2. Introduction

All employees working under Vandey Consultancy Services Pvt. Ltd. (Portugal operations) are compensated in accordance with applicable local laws and statutory requirements.

The HR department manages employee records, employment contracts, and payroll eligibility, while the Finance department ensures timely salary processing, statutory deductions, and tax compliance.

3. Salary Structure and Components

Component	Description
Base Salary	Monthly fixed wages mutually agreed between the employer and employee.
13th Month Salary	Equivalent to one month’s salary, paid in June each year.
14th Month Salary	Equivalent to one month’s salary, paid before November each year.
Overtime (OT)	Paid for hours worked beyond standard working hours, as per Portuguese labour regulations.
Meal Allowance	Optional benefit provided by the employer. Mandatory only if specified under an IRCT. Cash payment: up to €6.00 per day exempt from tax and social security Meal card/vouchers: up to €10.20 per day exempt Amounts above these limits are taxable

4. Salary Standards

Minimum Wage: €920 per month (as per the 2026 national minimum wage for full-time employees)
Standard Working Hours: 8 hours per day / 40 hours per week
Additional hours are treated as overtime and compensated accordingly

5. Mandatory Deductions (Employee Contributions)

Deduction Type	Description	Rate
Social Security (ESS)	Covers pension, unemployment, sickness, and family benefits	11% of gross salary
Personal Income Tax (IRS)	Withheld monthly based on progressive tax brackets	As per IRS table (14.5% – 48%)

6. Employer Contributions

Contribution Type	Description	Rate
Employer Social Security	Contribution towards pensions and healthcare	23.75% of gross salary
Work Accident Insurance	Mandatory insurance covering work-related injuries	~1.75% (varies by risk level)
Wage Guarantee Fund	Protection in case of employer insolvency	1% of gross salary

7. Payroll and Disbursement

Salaries are processed monthly, typically at the end of each calendar month
Electronic payslips are issued via the payroll system
Payslips are encrypted and protected using the employee’s tax identification number
All payments are made in Euros (€) to the employee’s registered Portuguese bank account

8. Roles and Responsibilities

Department	Responsibilities
HR Department	Maintaining employee records, validating contracts, ensuring labour law compliance
Finance Department	Payroll processing, statutory payments, audits, and tax compliance

9. Non-Compliance or Errors

Incorrect or delayed submission of bank details, tax documentation, or employment information may result in delayed salary payments. Corrections may be applied in subsequent payroll cycles after HR and Finance validation.

10. Review and Updates

This policy is reviewed annually to ensure alignment with Portuguese labour law, tax regulations, and social security requirements. Any updates will be formally communicated to employees.

11. Reference

For reference purposes, the Portuguese version of this policy is available at:

Política de Salários e Deduções Legais – Versão Portuguesa