NAVHR: TAX AND YEAR-EARLY 2019 UPDATES
With the beginning of the year, the State Budget came into force, having already published a set of measures with an impact at the labor level. This information summarizes the measures that imply changes in the level of wage processing in the NAVHR, as of January.
Minimum Guaranteed Monthly Remuneration [Decree-Law No. 117/2018]
For Mainland Portugal, the minimum guaranteed monthly remuneration (RMMG) is updated from €580.00 to €600.00, as of January 1, 2019, pursuant to the Decree-Law No. 117/2018 – Diário da República No. 249/2018, Series I of 2018-12-27.
As a result of the progress of the RMMG, the steps of the Single Remuneration Table (TRU) that are below this value should converge to the RMMG value for 2019.
In the Azores, the RMMG will rise to €630.00 in 2019. The minimum wage in the Azores is always 5% higher than in Mainland Portugal, as provided by the article 3 of Regional Legislative Decree nº 8 /2015/A of March 30, 2015.
With regard to the Autonomous Region of Madeira, it has already been agreed that the new value of the RMMG will be set at €615.00 in 2019. Publication in an official source is awaited.
Withholding tax on pay for overtime and related to previous years [Law No. 71/2018]
In terms of article 257 of the Law No. 71/2018 of December 31 – Diário da República No. 251/2018, Series I of 12/31/2018, Article 99 of the Personal Income Tax Code, approved by Decree -Law No. 442-A/88, of November 30, in its current wording, determines that remuneration related to overtime work and remuneration related to years prior to the one in which they are paid or made available are always subject to withholding tax, not being added to the remaining income of the months in question for the purposes of determining the withholding rate to be applied, similarly to what already happens with the holiday and Christmas allowance.
For this purpose, it establishes that, when remuneration for overtime work is paid, the retention rate to be applied is that corresponding to the remaining income earned in the month in question (without taking into account the referred remuneration for overtime work).
With regard to the remuneration of previous years, it provides that, for the purposes of determining the retention rate to be applied, the value will be divided by the sum of the number of months to which they refer, the rate thus determined being applied to all remunerations.
It also establishes that, when holiday and Christmas subsidies relating to previous years are paid or made available, the calculation of the tax to be withheld is done independently for each year to which the subsidies refer.
Social Support Index – IAS [still to be regulated]
Although not yet regulated, it is planned to increase the value of the Social Support Index by 1.6% in 2019.
The IAS will have its value set at €453.76 as of January 1, 2019.
o This update will affect the Family Allowance level – income brackets and the respective family allowance amounts.
Service Request
ARQUICONSULT will provide an explanatory manual of the procedures to be observed, subject to the maintenance contract’s consumption of 1 hour, so, in case of interest, we would appreciate it if you request it via Service Request, on our support platform http://support.arquiconsult.com.
We further inform that, if you want ARQUICONSULT to carry out this update, you must indicate it in the Service Request, with the time being deducted from the maintenance contract or billed in situations where it is not active.
Change support
Changes to the product in versions prior to NAV 2015 need to be specifically estimated, as they are out-of-life versions / with discontinued support and, therefore, with additional effort to downgrade the solutions.
