Independent Worker

The provision of work under the Independent Work regime is definitely installed in labour relations in Portugal.

It is not the place to make history here, but to look at the present, at what regulates the exercise of professional activity in this regime.

In 2000, there were about 1.2 million workers, “unofficial” numbers. As of 2011, Social Security itself began to monitor this indicator and publishes a figure of 680 thousand. It decreased slightly and today shows a tendency to increase again, far exceeding 700 thousand workers.

The information provided below was sourced from the Practical Guide for the Independent Worker (the text of which is reproduced here almost in its entirety), which we recommend reading in its entirety.

Being in the digital age, it is important to mention that all communication between the Independent Worker and Social Security must be carried out through the Social Security Direct portal.

If you are going to use Direct Social Security and do not yet have the access password, you must register on the Social Security portal on the internet, at www.seg-social.pt.

FRAMEWORK FOR INDEPENDENT WORKERS

Identification

The process begins at the Finance Portal, where the employee submits a declaration of activity. The Tax Administration officially communicates to Social Security the start of activity of Independent Workers, providing them with all identification elements, including the tax identification number (NIF).

Based on this information, Social Security identifies the Independent Worker in the Social Security Information System or updates the respective data, if the worker is already identified.

Registration/Framework

Based on the elements contained in the official communication from the Tax Administration, Social Security proceeds with the registration of the worker, if he is not registered, and classifies him in the Independent Workers Regime, even if he is in the conditions of the right to the exemption.

The Independent Worker is notified by the Social Security of registration and membership of the Independent Workers Regime, as well as the respective effects.

If it is the first time as an Independent Worker, the first inclusion in the Independent Worker Regime will only take effect on the first day of the 12th month after the start of the activity.

In case of cessation of activity during the first 12 months, the period counting is suspended, continuing from the 1st day of the month of the resumption of activity, if this occurs within the 12 months following the cessation.

If you have already worked as an Independent Worker, this is a restart of activity and the framework takes effect on the 1st day of the month of the restart.

In the case of resumption of activity until the first quarterly declaration, when it is verified that there is no income or the value of contributions due by the relevant income calculated is less than €20.00, the tax base corresponding to the amount of contributions in that amount unless an incidence base applicable to the period has already been established.

OBLIGATIONS OF THE INDEPENDENT WORKER

Quarterly reporting obligation

Independent Workers, when subject to compliance with the contributory obligation (not exempt), are required to declare quarterly until the last day of the months of January, April, July and October:

1. The total value of income associated with the production and sale of goods;

2. The total amount of income associated with the provision of services.

a.The quarterly statement also identifies other income necessary to determine the relevant income of independent workers.

b.The quarterly declaration is made until the last day of the months of January, April, July and October, about the income obtained in the three immediately preceding months. The elements contained in the declaration can be replaced up to the 15th day after the end of the deadline set for the submission of the quarterly declaration.

c. With the suspension or cessation of activity, the Independent Worker must make the quarterly declaration at the immediately subsequent declaration time.

d. In the month of January, Independent Workers who have been obliged to submit at least one quarterly declaration, relating to income obtained in the previous calendar year, must confirm or declare the values ​​of income related to the previous calendar year.

DETERMINATION OF RELEVANT INCOME

Determining the relevant income

The relevant income of the Independent Worker is determined based on the income obtained in the three months immediately preceding the month of the quarterly declaration, in the following terms1.

1. 1. 70% of the total value of services rendered;
   2. 20% of income associated with the production and sale of goods;
   3. 20% on the provision of services within the scope of hotel and similar activities, catering and beverages, and who declare it as such.
   The relevant income of the Independent Worker covered by the organized accounting system, provided for in the Personal Income Tax Code, corresponds to the value of the taxable profit calculated in the immediately preceding calendar year (declared in Annex SS, of the IRS Model 3 Declaration).

The aforementioned income is calculated by Social Security based on the values ​​declared by the independent worker person, as well as the values ​​declared for tax purposes.

The Tax Administration officially communicates to the competent Social Security Institution, by electronic means, the income declared by the Independent Workers.

Right of option

At the time of the quarterly declaration, the Independent Worker without Organized Accounting can choose to set a higher or lower income of up to 25%. This option is carried out at intervals of 5% (5%, 10%, 15%, 20%, 25%) to that resulting from the declared values, without prejudice to the established limits (minimum of €20.00 and maximum of 12xIAS (5,318 €.40, value in 2022)), except independent Workers who accumulate professional activity on behalf of others and who contribute for the amount of the Relevant Remaining Income.

Contributory tax base

1. The monthly contributory base corresponds to 1/3 of the relevant income calculated in each reporting period, producing effects in the same month and the two following months.

2. When it is verified that there is no income or the value of the contributions due by the relevant income calculated is less than 20.00 euros, the tax base will be fixed that corresponds to the amount of contributions in that amount, that is, 20.00 euros per month.

3. Whenever the relevant income is calculated based on organized accounting, the monthly incidence base corresponds to the twelfth of the taxable profit, with a minimum limit of 1.5 times the value of the IAS (€664.80, value in 2022) being fixed in October to take effect in the following calendar year.

4. The contributory base of Independent Workers with a relevant monthly average income calculated every quarter of an amount equal to or greater than 4 times the value of the IAS (€1,772.80, value in 2022), who accumulate this activity with professional activity on behalf of others, corresponds to the value that exceeds that limit).

5. The contribution base considered in each month has a maximum limit of 12 times the value of the IAS (€5,318.40 (maximum limit of 12xIAS).

Note: The relevant income amount that determines a contribution of less than €5.00 is not relevant for the purposes of the contribution base.

Contributory base on resumption of activity

In the case of resumption of activity and until the first quarterly declaration, if there is no income or if the value of contributions due by the relevant income calculated is less than €20.00, the base of incidence corresponding to the amount of contributions is fixed. in that amount, unless the tax base is already fixed for that period.

ANNUAL DECLARATION

In January, Independent Workers must declare their income for the last quarter of the previous year (October, November and December).

On that date, it also has to confirm or declare the values ​​of income related to the previous calendar year, except for pensioners, when they have been obliged to submit at least one quarterly declaration regarding income obtained in the previous calendar year.

To confirm the income figures for the previous calendar year, the independent worker person must access the option Employment > Independent Worker > Quarterly declaration regime > Previous year declarations. The quarterly statements that have been delivered are indicated by “Consult Statement”.

The Independent Worker must click on the “Consult Declaration” button, in the quarterly declarations that he wants to confirm, and after verifying the declared values, if they are correct, he must click on the “back” button, without having to click on any other button to make The confirmation.

Annual review of the incidence base

The Social Security services annually review the declarations relating to the previous year based on the income communication made by the Tax Administration and notify the Independent Worker of the differences found.

The value of the difference resulting from the annual review of the contributory base determines the calculation of the contributory obligation in January of the year following that to which the income relates and is considered proportionately in the employee’s contributory career for the entire year to which they relate.

Only the amount that exceeds the value of €20.00 is relevant for the purposes of the contributory tax base.

The Independent Worker is notified of the relevant amount of income resulting from the review, namely for the purposes of hearing the interested parties, under the terms of the Code of Administrative Procedure.

Contribution Rate

The contribution rate on the Independent Workers Contributory Incidence Base is 24.1%

PAYMENT OF CONTRIBUTIONS TO SOCIAL SECURITY

Issue the payment document on Social Security Direct

On the tab “Current Account” “Current Position”, “Amounts to be Paid”, select the desired option and then the option “Issue Payment Documents”.

Deadlines for the payment of contributions

Contributions must be paid monthly between the 10th and the 20th of the month following the one to which they refer.

Failure to comply with this deadline is a light administrative offence in the 30 days following the deadline and a serious one in all other situations and is subject to the payment of late payment interest.

Direct Debit

Independent Workers may authorise direct debit for the payment of contributions, as well as consult and change direct debit authorisations.

Subscribing to this service is compulsory through Social Security Direct, under the “Authorise Direct Debit for the Payment of Contributions” tab, by signing the subscription contract and completing the Direct Debit Authorisation Form (ADC).

Alterations such as amounts and deadlines can be made in the Multibanco network or the Bank.

Note: The direct debit system only charges the monthly contribution amount, that is, if the taxpayer has debts from other months or interests in debt, he will have to make the respective payment through the existing means.