A government initiative was approved with votes in favor from PSD, CDS-PP, Chega, and IL.
Livre, PCP, and BE voted against it, while PS, PAN, and JPP abstained.
The PSD requested a waiver of the final drafting to expedite the legislative process completion. As unanimity is required, and PCP voted against it, the request was denied.
The approved bill concerns an amendment to article 19-B of the Tax Benefits Statute (EBF), which includes a tax incentive for wage valorization.
Currently, for companies to deduct IRC costs related to wage increases, they must reduce the “wage range” among employees, indicating the disparity in salaries between the top 10% highest-paid and the bottom 10% lowest-paid workers.
With the newly approved amendment, companies no longer need to meet this condition.
This exemption will apply starting this year. The bill states that the new rule applies “to taxation periods beginning on or after January 1, 2025.”
The remaining conditions for companies to access the incentive, already enshrined in law, remain unchanged.
Among the requirements is the obligation for employers to make a minimum increase in the company’s average annual base salary and the base salary of employees earning equal to or less than the company’s average annual base salary at the end of the previous year.
Law no. 60/2018, aimed at promoting salary equality between men and women, already requires the provision of the “balance of pay differences between women and men by company, profession, and qualification levels,” and the PS aimed to use this tool to address the “wage range” issue.
During the debate on the initiative’s specifics this week, the PS proposed that companies be required to report to the State on salary disparities among employees to highlight the need to address wage differences, but the proposal was rejected by PSD, CDS-PP, and Chega.
Alongside the EBF amendment removing the requirement to reduce disparities among workers, the government included in the 2026 State Budget proposal an amendment to the percentage related to the minimum salary increase that companies must fulfill.
Instead of the EBF stipulating a minimum 4.7% increase (expected for 2025), the administration of Luís Montenegro proposes to the deputies that the minimum be 4.6% in 2026.
This percentage for each year aligns with the objective of the annual wage valorization in the country as included in the Social Concertation agreement for 2025 to 2028, signed by the government of Luís Montenegro on October 1, 2024, with the General Workers’ Union (UGT), the Confederation of Farmers of Portugal (CAP), the Confederation of Commerce and Services of Portugal (CCP), the Confederation of Portuguese Business (CIP), and the Portuguese Tourism Confederation (CTP).
