Teleworking in Portugal: limits regarding the tax exemption and exclusion of social security contributions of the compensation amount due to the employees

The limit of compensation amount for tax exemption purposes and exclusion from social security contributions corresponds to the following:

• Electricity consumption - 10 cents per day;
• Personal Internet consumption - 40 cents per day;
• Computer or equivalent personal IT equipment - 50 cents per day.

These limits are increased by 50% when the amount of compensation expressly results from the Collective Bargaining Instrument negotiated by the employer.

Up until these limits the compensation amount attributed by the employer to the employees is deemed as a cost for the employer and not as part of the employees’ salaries for tax and social security purposes.

The exemption limits only apply to the compensation provided for the use of goods or services that are not provided directly or indirectly to the employee by the employer.

These limits are applicable with reference to full days of work on which the employees render their activities under telework and to the compensation that is foreseen in a written agreement executed between the employer and the employee.

Under this Ordinance a full day of work is deemed as a day on which the employee carried telework, using information and communication technologies, at a place not determined by the employer, for a period corresponding to no less than one sixth of the employee’s weekly working hours.

The Ordinance is effective as from October 1^st, 2023.