YOUR money

RICARDO CHAVES IS HERE TO HELP PEOPLE UNDERSTAND AND DEAL WITH WHAT IS ALLOWABLE –AND NOT – WHEN IT COMES TO PERSONAL AND BUSINESS FINANCIAL MATTERS IN PORTUGAL.THIS MONTH THE QUESTIONS COVER EMPLOYMENT OPTIONS AND DISCOUNTING

Am I obliged to give Christmas bonuses to people like the maid, the gardener, the odd jobs man, and if so, what is the acceptable amount - I don’t want to set a precedent and find it is expected every year. A domestic worker is someone who regularly provides household services (cooking, cleaning, care of children or the elderly, looking after the garden, etc) receiving in return a regular remuneration. Whether this work is done full-time or part-time, all domestic employees have the right to social protection, which obliges employers to register the worker or communicate their admission to Social Security. And this means that they are entitled to the additional two months salary.

Be aware that the law changed significantly in March 2023 and it is now a criminal offence to fail to register these types of workers in the social security system. We suggest that you contact a solicitor in order to evaluate your options, but please note that the line that separates an employment contract from a service contract in the area of domestic services is quite thin.

It’s strongly recommended to seek legal advice in any work-related matters.

I am thinking about getting a job here, possibly as a translator or marketing advisor. I have been told I would be better off being employed by a company as a salaried member of staff, rather than being a consultant who invoices each month. Can you tell me what the specific advantages are. I am 38 and a single parent of an eight year old child.

If you are self-employed, you are responsible for the payment of your social security contributions; however, if you are employed by a company, is the company that pays the contributions and retains your part of the social security, as well as the personal income tax.

In theory, you need to compare the salary you could earn with your possible earnings as a freelancer. When employed, you work under the supervision of your employer and you are restricted to work agreed hours, and to the company’s time off/holiday periods, etc.

As a self-employed, you are in control and usually the more you work, the more you earn. As a sole trader, you pay on average 15% of social security contributions; however, as an employee, the retention rate of social security is just 11%.

The social benefits that you are entitled to – such as unemployment benefit, etc – are much higher if you are employed than if you are self-employed. This is because you benefit not only from the contributions you made, but also from the contributions made by your employer.

As an employee, your employer normally retains the tax at source, whereas for a freelancer, this is not always the case, which means that as a freelancer, you are more likely to pay tax when submitting your yearly tax return, while as an employee you will either pay less or have a refund.

Besides the tax, when registering as self-employed in Portugal, you will also be liable for VAT, which you aren’t if you are employed by a company.

In conclusion, salary is more stable and there is less risk, but a self-employed individual, if experienced in their particular field, will normally have higher earnings potential and also wider obligations.

I am increasing finding that I am being asked to give discounts on the products I sell here (that I import from abroad) as if discounting is the acceptable norm. Is it? I have only just set my business up here and am selling particularly good quality decorative items for the home into retailers. I would also like to be offering a different brand direct to consumers. Do I need to revisit all my predicted business plans to allow for discounting, or do I simply say no? Defining the appropriate price for selling a product or service on the market depends on the balance between the market price and the calculated value, based on costs and expenses. The value must cover the direct cost of the product or service and include any other variable or fixed costs.

It is obviously not possible to insist that you offer discounts of any nature – you determine which price you sell your goods and services at, and the customer will have to decide if they are acceptable or not.

QI live here full time and have done for more than 15 years. I also have property in the UK, and an apartment in Gibraltar, both of which are rented out. I need to know where my Will should be lodged and how to ensure my daughter and her family are the sole beneficiaries – particularly of my property here. I do not wish to bequeath anything to my estranged son and his wife.

A As you reside in Portugal, it would be convenient to establish a Will here as this allows you to choose the law of your nationality to regulate the dispositions of your Will and the succession in general.

According to the current European law, without a Will the law that shall regulate the succession is the law of the residency of the testator, in your case the Portuguese law, which is very restrictive and does not permit to remove the son as a beneficiary, outside of exceptional cases. If you are English, the laws of England and Wales are more flexible in terms of determining who can be beneficiaries of a Will.

QSome building works are taking place in the land beside mine, where there has never been a building of any description. Is this allowable in the countryside now and what steps should I take to ensure that the land owners/builders are within their legal rights? I want to protect my peace and quiet, and my view across to the hills which I have enjoyed for more than 30 years.

A Anyone who wishes to build in a rural area is limited by the urban planning rules