Portugal charges a single social security contribution on employment income, the Taxa Social Única (TSU), and the rate is 34.75% of gross pay. The employer pays 23.75% and the employee pays 11% (Código dos Regimes Contributivos, the Código Contributivo approved by Lei n.º 110/2009, Art. 53). One rate, one law, two shares. The arithmetic is simple. What takes attention is everything around it: there is no earnings ceiling, the correct rate depends on the worker category, work-accident cover is a separate policy, and the monthly declaration and the payment fall on two different dates.
The rate: 34.75%, split 23.75% employer and 11% employee
Article 53 states the rate in one sentence: *"A taxa contributiva global do regime geral correspondente ao elenco das eventualidades protegidas é de 34,75 %, cabendo 23,75 % à entidade empregadora e 11 % ao trabalhador."* In plain terms, the total contribution for the general regime is 34.75%, of which the employer owes 23.75% and the employee owes 11%.
The employee's 11% is withheld from gross pay and shows on the payslip as a deduction. The employer's 23.75% is a cost on top of gross that never touches the payslip. For a worker on €2,000 a month, the employee sees €220 deducted, and the employer owes a further €475, for a combined €695 sent to Segurança Social for that month.
No ceiling: the contribution scales with the whole salary
The feature that separates Portugal from most of its neighbours is the absence of a contribution ceiling. Germany caps its social insurance contributions at monthly earnings ceilings, so above those ceilings they stop increasing. France caps part of its contributions, such as the capped old-age contribution, at its monthly social security ceiling. Portugal applies the full 34.75% to the entire gross, with no upper limit.
The effect grows with pay. On €1,500 a month, the employer TSU is €356.25 and the employee TSU is €165. On €10,000 a month, the same rates produce €2,375 employer and €1,100 employee, every month, with nothing exempted at the top. For an adviser quoting the cost of a senior hire, the 23.75% employer share applies to the whole figure, not to a capped band of it. There is no threshold to track and no income level above which the contribution stops increasing.
What the TSU funds
The 34.75% is a single contribution covering the general regime's list of protected contingencies (Código Contributivo, Art. 53). Those contingencies are old-age and retirement pensions, invalidity, survivors' benefits paid on a worker's death, sickness, parental leave, occupational disease, and unemployment. The worker does not choose a subset. The general regime bundles the protections, and the single rate funds all of them.
Work-accident insurance is a separate mandatory policy
Occupational accident cover is not part of the TSU. Portuguese law requires every employer to hold a private work-accident insurance policy (seguro de acidentes de trabalho) with a licensed insurer, under the reparation regime in Lei n.º 98/2009. The premium is priced by the insurer according to the occupation and its risk, so it is not a fixed percentage of payroll the way the TSU is; a clerical role is priced at a low rate and a construction role at a much higher one.
Two points matter for budgeting the real cost of employment. First, this premium is an additional charge beyond the 23.75% employer TSU, and no statutory rate applies: the insurer sets it on the declared payroll and the risk of the activity. Second, insurers collect, together with the premium, a small statutory contribution calculated on insured wages that funds the Fundo de Acidentes de Trabalho (FAT), the fund managed by the insurance regulator (ASF) that pays benefits when an employer or insurer cannot. Compliance with the insurance requirement is enforced by the labour inspectorate, the Autoridade para as Condições do Trabalho (ACT). The premium and the FAT contribution are paid to the insurer, never to Segurança Social, and an employer that runs payroll correctly but holds no valid policy is still in breach.
Reduced and different rates by worker category
The 34.75% is the general rate, and several categories use a different one. Members of a company's statutory bodies (membros dos órgãos estatutários) who do not exercise management functions contribute at 20.30% employer and 9.30% employee (Código Contributivo, Art. 69); a director who does exercise gerência or administração returns to the standard 23.75% and 11%. Certain non-profit and social-solidarity institutions pay a reduced employer share of about 22.30%. Domestic and agricultural work, sea fishing, and religious institutions each have their own reduced rates.
Beyond the standing categories, the law also lets the employer's share be reduced as a hiring incentive: temporary relief on the 23.75% for hiring young first-job seekers and the long-term and very long-term unemployed (the latter aged 45 or over) on permanent contracts, subject to conditions and time limits. The important operational point is that the rate is a property of the worker's category and situation, not a single company default. Applying 34.75% to a statutory-body member who qualifies for 29.60% overstates the contribution; applying the standard rate to someone the law puts in a reduced band produces the wrong number in both the deduction and the employer cost.
Two deadlines: declare the month, pay by the 25th
Portugal separates the declaration from the payment, and they fall on different dates in the month after the work.
The declaration to Segurança Social reports each worker's pay and contribution base for the month (Código Contributivo, Art. 40(1)). Under the old model, the employer files this Declaração de Remunerações (DRI) by the 10th of the following month. The DRI is separate from the Declaração Mensal de Remunerações (DMR), which goes to the tax authority by the 10th of the month after payment and reports pay and income-tax withholding (Código do IRS, Art. 119(1)(c)(i)).
Since 1 January 2026, every employer pays contributions between the 1st and the 25th of the following month (Código Contributivo, Art. 43, as amended by Decreto-Lei n.º 127/2025); the previous deadline was the 20th. The same decree replaces the DRI with a pre-filled model, the Simplificação do Ciclo Contributivo (SCC): Segurança Social calculates the month's values from the permanent pay on file, and the employer confirms them or adds variable pay by the 20th, with silence counting as acceptance (Art. 40(7) to (9)). The SCC is optional during 2026 and compulsory for every employer from 1 January 2027 (Decreto-Lei n.º 127/2025, Art. 5). The underlying obligation stays the same: declare the month, then pay it.
A worked example: a worker on €1,500 a month
Take a worker on a round gross of €1,500 a month.
- Employee TSU: 11% of €1,500 = €165, deducted from the payslip.
- Employer TSU: 23.75% of €1,500 = €356.25, an added cost on top of the €1,500.
- Sent to Segurança Social for the month: €165 + €356.25 = €521.25.
Then apply Portugal's 14-payment structure. Salaries are paid across 14 amounts a year: twelve monthly payments plus a holiday subsidy and a Christmas subsidy, each equal to a month's pay. The TSU applies to the subsidies as it does to ordinary pay, so the annual contribution is calculated on 14 payments, not 12. Over a full year the base is €1,500 × 14 = €21,000. The employer TSU is 23.75% of €21,000 = €4,987.50, and the employee TSU is 11% of €21,000 = €2,310. Reading only the twelve monthly runs understates the yearly employer contribution by two months, here €712.50.
Where the mistakes come from: ceiling, category, cover, and the two deadlines
The rate is fixed and the split is fixed, so the contribution itself is not where mistakes come from. Four things are:
The no-ceiling rule means the contribution keeps increasing with pay, so cost projections for higher earners cannot borrow the capped intuition that holds in Germany, or for part of France's contributions. The correct rate code depends on the worker's category, and standard, statutory-body, non-profit, and incentive rates each produce a different deduction and a different employer cost. The work-accident policy is separate, priced by risk, and enforced by a different authority, so a clean TSU calculation does not by itself make an employer compliant. And the split deadlines, the declaration by the 10th (or the SCC confirmation by the 20th) and payment by the 25th, are two obligations in the same month, either of which can be missed on its own.
These four items are the recurring upkeep behind a rate that looks like one number. Flux applies the current rate and split for each worker's category, calculates the TSU on the full gross with no ceiling and across all 14 payments, and files the monthly declarations on schedule, so the parts that change with the worker and the calendar stay correct without a manual check each month. The 34.75% is the easy part. The category, the cover, and the two dates are the work.
Mehmood Deshmukh
CTO & Co-Founder
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