Every month, a part of the salary is given to Social Security to finance social protection mechanisms. The worker contributes 11% of the gross salary, while the employer contributes 23.75%, totaling a contribution rate of 34.75%. The money is not kept in an individual account but enters a collective system that pays pensions and current benefits, while simultaneously keeping a record of each worker's contribution history.
The Portuguese Social Security system works mainly through a redistribution scheme, where contributions paid currently finance pensions, sick leave benefits, unemployment benefits, and other support from the same period. There is also a public capitalization component that accumulates reserves in the Social Security Financial Stabilization Fund for future sustainability.
For self-employed workers, the calculation is different. In most cases, the contribution rate is 21.4% and applies to a base calculated from the relevant income, normally corresponding to 70% of the amount received. Individual business owners are generally subject to a rate of 25.2%.
Not all support comes directly from contributions. Social Security also includes the social protection system for citizenship, which covers solidarity subsidies, family protection, and social action. These are primarily funded through State Budget transfers and tax revenues, not from workers' contributions. To confirm that contributions are correctly recorded, workers can check their contribution history on Segurança Social Direta.
