Presidential Decree No. 227/18 of 27 September, which will enter into force on 26 December, repeals the Decree No. 38/08 of 19 June and establishes the Legal Framework on Binding and Contribution for Mandatory Social Protection.

This diploma applies to employers and equivalent entities and to workers who are covered by Mandatory Social Protection.

The legal relationship of binding is made through the registration of the employer and the respective employees in the Mandatory Social Protection Management Entity. The registration of the employer must to be made up to 30 days after its incorporation and the employer must declare the existence of workers under its responsibility. The employer must register the employee, as well as the registration of the respective dependents, within a period of 30 days as from the beginning of the legal-labor relationship.

The contribution rate is set at 8% for the employer and 3% for the worker, of the total remuneration of the worker on which the contributions are levied.

A contribution base is considered the gross remuneration of the employee, in particular all cash benefits which, according to the legal-labor relationship, are owed by the Employers to the employees. In case the employee receives part of the remuneration in kind, it must be referenced in cash for contribution base purposes.

The contribution base does not include:

• The social benefits paid by employers in the scope of Mandatory Social Protection;
• The amount corresponding to the holiday allowance;
• The amounts corresponding to the subscription or participation made by employees and employers of complementary social protection arrangements provided for in specific legislation.

The payment of contributions, both those owed by the employer and those relating to the employee, is the responsibility of the employer, and the employer must make a direct deduction in the employee's remuneration.

Contributions must be paid monthly, by settlement of the payment guide, until the 10th day of the month following that to which the contributions relate, except in special schemes where other deadlines are determined.

The employer that does not comply with the obligation to contribution within the term is subject to the payment of default interest of 1% per month on the amount of the initial capital of the debt.