The National Minimum Wage (SMN) in Portugal is currently fixed at 870 euros, but what many are unaware of is that the way this amount is paid has not to be fully by bank transfer. Portuguese legislation allows only one part to be delivered in cash, being the remaining amount paid through other means, such as bank transfer or installments in kind.
Portuguese labor legislation provides that the retribution to the worker does not have to be exclusively in cash. According to Article 258 (1) of the Labor Code, “the retribution of the worker comprises cash benefit and the installments in kind that, under the terms of the contract, the collective labor regulation instrument or the use of the company, are due to the worker as counterpart of their work.”
In practice, this means that the final amount can be composed of different forms of payment, provided they are foreseen and agreed, the.
Only half can be in cash
The law states that at least half of the remuneration must be paid by bank or other means that guarantee documentary evidence. According to article 276 (3) of the Labor Code, “at least 50 % of the remuneration must be paid by allowing the worker to prove his receipt.”
This implies that from the current minimum wage of 870 euros, up to 435 euros can be paid in cash (species), being mandatory transfer or documentary means to the remaining amount.
What are installments in kind?
The installments in kind are goods or services provided by the employer in partial replacement of cash payment. According to Article 273 (1) of the Labor Code, “retribution may be composed of one part of cash and one in kind, provided that the latter is appropriate to the personal use of the worker and proportional to the importance of retribution.”
These installments may include food, accommodation or housing, and should be adequate to the needs of the worker.
Limits defined by law
The law itself imposes maximum limits on the installments in kind. According to Article 273 (2) of the Labor Code, “the retribution in kind cannot exceed the amount corresponding to a part of the national minimum wage.” Based on complementary regulations and guidelines of the authority for work conditions (ACT), the applicable reference limits are:
- Full food: up to 35% of SMN
- Accommodation: up to 12% of SMN
- Worker and family housing: up to 27.36 € per floor
These values are considered maximum and cannot be exceeded in compensation for the minimum wage.
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Requirements for validity of benefits
The installments in kind are only valid for the purposes of retribution when they are a direct benefit to the worker and are contained in the contract or collective regulation. This obligation is implicit in article 258 (1) already referred to, which requires that they are provided for in a recognized business contract or custom. If they are unilaterally imposed or have no real value, they may be legally contested.
Documentary proof obligation
Regardless of the payment method, the employer is required to provide documentation to the worker. Article 276 (1) of the Labor Code stipulates: “The employer shall deliver to the worker a document that contains the complete identification of the parties, the number of working days, the retributions and their discounts, as well as other paid amounts.”
In addition, paragraph 2 of the same article stresses that payment “must be made by allowing the worker to prove receipt, namely by bank deposit or nominative check.” These obligations guarantee transparency and abuse protection.
Possibility of application in other wages
The flexibility provided by law does not only apply to the minimum wage and can be used on other salary ranges, provided it respects the same legal criteria. However, most clarifications and inspections focus on SMN, as it is the minimum legal level required.
Article 273 (3) of the Labor Code confirms this requirement: “The overall value of the worker’s remuneration cannot be lower than the value of the national minimum wage.”
Act’s inspection
Compliance with the rules on paying the salary is supervised by the authority for labor conditions. According to the Articles 552 to 559 of the Labor Codenon -compliance with salary obligations may constitute a serious offense, subject to fine. The inspections focus on both the form of payment and the existence of proper documentary evidence.
The current legal framework aims to ensure protection to the worker, while allowing some flexibility in the way the work is made. The system is based on trust, but with proof and supervision mechanisms that intend to ensure compliance with legal obligations.
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