Recent legislation has introduced significant changes under the so-called Simplification of the Contributory Cycle, a new framework that reshapes the way in which employers communicate remuneration to Social Security.

This regime aims to reduce administrative burdens, enhance transparency, and provide greater predictability in the fulfilment of contributory obligations. It is based on the automatic calculation of the contributory obligation by Social Security, subject to confirmation, correction or update by the employer.

Key changes include:

• new rules governing the communication of employee hiring;

• the mandatory communication of changes to permanent remuneration;

• a revised remuneration reporting model, with a direct impact on employers’ monthly procedures;

• adjustments to the validation and payment mechanisms and deadlines for contributions.

Adoption of this model will take place on a gradual basis between 1 January 2026 and 31 December 2026, becoming mandatory for all employers after the end of the transitional period.

Saraiva Matias & Associados closely monitors these developments and remains available to assist clients in assessing the practical impact of this new framework and in adapting their internal processes to the new legal requirements.