The most valued benefit for employees in Portugal is by far Medical Insurance. Life & Disability insurance and Retirement Schemes come next. The latter is crucial to guarantee a reasonable income when active life ends, as legal retirement benefit coming from Social Security tends to be less and less sufficient.
According to Forbes, Portuguese are the friendliest people in the world.
We’re watching an increasing orientation among employees to value new types of benefits which balance personal and professional life. For example meal tickets/cards, mobile phones for personal use, cafeteria, extra days of vacation and education expenses.
Average Cost for Employer Sponsored Benefits
An average cost for a Benefits Package including Medical Insurance, Life Insurance and DC Retirement scheme could be between around 10% of the annual payroll of the Company, although it can vary significantly from case to case.
This average percentage will rise if we consider the mandatory Workmen’s Compensation insurance, but it is not considered an Employee Benefit precisely because it is mandatory.
A Company setting up in Portugal should learn very quickly which benefits are more common in their particular area of activity. Retaining talent is only possible through an adequate definition of the benefits policy.
Knowing relatively well the benefits provided by Social Security is also important because for some of those it doesn’t make sense for the Company to implement private solutions.
The legal framework on what concerns fiscal matters and Social Security can be quite complex if a Company does not reach out to experts on those area. In some cases Companies tend not to make timely and effective decisions regarding benefits because they do not quite understand its fiscal implications.