A scant 23% of household employees enjoy the security of insurance coverage
In Portugal, the importance of social security contributions cannot be overstated, as they are integral to accessing various social benefits such as old-age pensions, sickness benefits, and unemployment benefits. Here's a breakdown of how employers can ensure compliance with social security contributions for domestic workers.
Steps for Ensuring Compliance
- Understand Legal Requirements: Employers must familiarise themselves with the legal obligations regarding social security contributions for domestic workers. The law requires a minimum of 30 hours to be declared per month, with a total contribution rate of 28.3% (18.9% paid by the employer and 9.4% by the employee).
- Registration and Declaration: All domestic workers must be registered with Social Security. This involves declaring the minimum required hours and making contributions on time.
- Utilize Digital Payment Methods: Employers can leverage digital payment options like ATM home banking and MB Way to simplify the contribution process, making it easier to manage contributions.
- Monitor Contribution Payments: Regular checks should be made to ensure that contributions are being made correctly and on time.
- Communicate with Employees: Inform domestic workers about the importance of contributions for their social benefits. This encourages employees to ensure their contributions are up to date.
- Consult Professional Advice: If necessary, consult with a legal or financial advisor to ensure compliance with all relevant laws and regulations.
Addressing Non-Compliance
- Awareness and Education: Both employers and employees need to understand the consequences of non-compliance, such as reduced social protection and potential legal penalties.
- Government Support: Encourage the use of government initiatives aimed at simplifying contributions and increasing formalization, such as digitalization efforts.
- Legal Framework: Advocate for policies that promote formalization and compliance, such as gradual sanctions for non-compliance or incentives for timely contributions.
By following these steps, employers can help increase compliance with social security contributions for domestic workers, ensuring that both parties benefit from the social security system.
As of December 2024, 220,360 domestic workers were registered with the Social Security Institute, with an average monthly wage of 358 euros. However, 48% of domestic workers in Portugal are not making social contributions, a figure that has remained stable over the past three years. The Syndicate of Workers in Door, Security, Cleaning, Domestic, and Various Services (STAD) and the Commission for Citizenship and Gender Equality (CIG) have been involved in initiatives to promote formalization and compliance, such as the publication of the "White Paper on Dignified Domestic Work" in April 2024.
From 2023 to 2024, the number of officially registered domestic workers remained practically stable, with a difference of only 825 professionals. Despite this, the number of domestic service employing entities increased by 42%, from 334,000 to 475,000, from 1990 to 2022. The employing entity is responsible for paying holiday pay (22 working days of holiday per year) and Christmas pay, as well as declaring a minimum of 30 hours per month, even if the cleaning worker works fewer hours at the employer's home. The declared hourly wage used to calculate contributions is 3.01 euros per hour, regardless of the actual wage.
Ensuring compliance with social security contributions for domestic workers in Portugal is crucial for both employers and employees, as these contributions are essential for accessing social benefits. By promoting formalization and compliance, we can ensure a fair and sustainable domestic work sector in Portugal.
- To ensure their personal-finance well-being, domestic workers in Portugal need to contribute to the social security system regularly, as these contributions are crucial for accessing various social benefits like old-age pensions, sickness benefits, and unemployment benefits.
- In the realm of business, it is imperative for employers in Portugal to prioritize compliance with social security contributions for domestic workers, as this not only benefits the employees but also contributes to a fair and sustainable domestic work sector.
