Minimum wage to increase

IMPACT – MEDIUM

What is the change? Portugal’s monthly minimum wage for foreign workers is set to increase from €580 to €600 (about US$685). The minimum monthly wage for highly skilled workers, including EU Blue Card holders among others, will increase to €1,307.28.

What does the change mean? The new salary minimums will apply to all applications, including renewal applications, submitted on or after Jan. 1. It also applies to applications that were pending as of Jan. 1.

• Implementation time frame: Jan. 1.
• Who is affected: Portuguese companies employing foreign workers, foreign nationals working or residing in Portugal.
• Business impact: Businesses may see an increase in labor costs because of the new minimum wage.

Background: Portugal’s minimum salary requirement for foreign workers is adjusted annually. As of Jan. 1, employee salaries must be at least €600 per month, not including benefits. Highly skilled workers have separate salary requirements, which are calculated as three times the amount of the social support index, or IAS, value. As of Jan. 1, the IAS value will rise to €435.76, thereby raising the monthly minimum for highly skilled workers to €1,307.28. Employers are encouraged to pay highly skilled workers at least €1,500 per month, however. The same salary minimum is recommended for other specialized worker categories, including researches and investors.

Analysis and Comments: Employers should take the salary minimums and the recommended pay for highly skilled workers into account when budgeting for 2019.

Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.