Maid and social security - any advice welcome!

[Oakland]

I have owned a 3 bed/3 bath villa in Carvoeiro for the last 5-6 years. In the first few years of ownership we had different maids who were all organised by our management company. As we didn't rent the villa out we used maids on an hourly basis as we needed them - however cleaning standards were mixed and we struggled to maintain a good cleaner. However, last year we took the plunge and started rent out our villa and so the management company found us a 'regular full time' maid. She currently cleans and maintains our villa (and others for the management company) under supervision from the management company when she is needed (ie either when we are there or the villa is rented out) and she is happy to come as often or as little as required during the occupied weeks. She is the best cleaner we have had so far and keeps the villa spotlessly clean and the washing and ironing always done! We currently pay €150 per month to the management company for her services plus double in June and December. However, they have just written to us and advised that this year the maid needs to go onto 'social security' and if we agree the fee charged by the management company for her services would increase by 23.75% to them and 11% to the maid. They have said if we want to avoid the increase the alternative is to pay her directly in cash or into her bank account. I do complete both a UK and Portuguese tax return and declare my income and expenses in Portugal on both returns. Please can anyone let me know - does this arrangement sound odd? Am I best just paying her cash to keep a good cleaner or am I getting a raw deal in relation to both the charge and my personal tax return? Any advice would be much appreciated!

[Rampage]

Sounds pretty standard for a formal contract arrangement. Our full time cleaner, arranged by our property manager and inclusive of all tax/social security requirements, costs us 215.6 euros p.m, which is about what you will be paying. A Christmas bonus of an extra month's salary is also standard.

[shanagarry]

Pay her in cash into her bank account and ignore the 13th month practice. We inherited one of those arrangements several years ago and put up with it for a while. We had the same Social Security issue and dealt with it through the cash payment method and stopped the extra months nonsense.

Finding and keeping a good maid is essential if you want your property looked after. In our experience they are more reliable than a management company. You seem to have found a good one - pay her a sensible wage (€150 seems cheap for what you get) and agree the terms in writing - no need for anything more than 12 monthly payments. Keep it simple

[Alison]

No, this arrangement doesn't sound odd - just the 'legal' way of doing things!

As Shanagarry says, finding and keeping a good maid is crucial. If you've found a good one then she deserves to be paid well - in these hard times in Portugal the maid can sometimes be the only breadwinner in a family.

Payment method depends on whether you (and your management company) want to do things 'by the book' or not. Paying the Social Security for your maid I believe gives her more state benefit entitlement when she retires?

We inherited an excellent Portuguese maid when we bought our villa 10 years ago and she has been with us ever since. We changed from the inherited cash payment method to paying her Social Security with the inherent increase in cost to us. The total bill to us is now 250euros a month and we do pay the extra Christmas month. It is swings and roundabouts for her over the year - when the villa is empty she doesn't have much to do but when it is occupied (which it is for much of the year) then she often has to work her socks off doing quick changeovers, clearing up after guests etc and this can sometimes be on a Saturday or a Sunday - her normal days off.

Management companies are keeping an eye out for the tax authorities on all these issues which would explain why they have to be seen to be encouraging you to do things 'by the book'.

[widge]

No, this arrangement doesn't sound odd - just the 'legal' way of doing things!

As Shanagarry says, finding and keeping a good maid is crucial. If you've found a good one then she deserves to be paid well - in these hard times in Portugal the maid can sometimes be the only breadwinner in a family.

Payment method depends on whether you (and your management company) want to do things 'by the book' or not. Paying the Social Security for your maid I believe gives her more state benefit entitlement when she retires?

We inherited an excellent Portuguese maid when we bought our villa 10 years ago and she has been with us ever since. We changed from the inherited cash payment method to paying her Social Security with the inherent increase in cost to us. The total bill to us is now 250euros a month and we do pay the extra Christmas month. It is swings and roundabouts for her over the year - when the villa is empty she doesn't have much to do but when it is occupied (which it is for much of the year) then she often has to work her socks off doing quick changeovers, clearing up after guests etc and this can sometimes be on a Saturday or a Sunday - her normal days off.

Management companies are keeping an eye out for the tax authorities on all these issues which would explain why they have to be seen to be encouraging you to do things 'by the book'.

Hear, hear couldn't agree more - look after the staff you employ they'll repay you twofold.

[Bruce Wallis]

Sounds pretty standard for a formal contract arrangement. Our full time cleaner, arranged by our property manager and inclusive of all tax/social security requirements, costs us 215.6 euros p.m, which is about what you will be paying. A Christmas bonus of an extra month's salary is also standard.

We operate the same arrangement.
We agreed to pay the NI for our maid, mainly because she has become almost one of the family, and it seemed the decent thing to do.

If I am honest , we signed up to the `13 month thing in ignorance by agreeing to a monthly, rather than an annual salary, which I guess would work out on a monthly basis as annual salary sum/13
I suspect that most of us drifted into this arrangement by virtue of the same default of ignorance!

We maybe aren't as hard nosed about all this as Shangarry makes himself seem, but rightly or wrongly, after 8 years we have a maid, gardener and pool man who are almost long term family retainers, and we feel a sense of responsibility for them, especially in these hard times.

[shanagarry]

We maybe aren't as hard nosed about all this as Shangarry makes himself seem,

Hard-nosed - no - I call it practical. Doing things properly and efficiently is what I do

[steve]

You make a potential rod for your own back by not paying NI. If the maid later decides that she wants the benefits that NI gives or her income becomes known to the authorities it is you not her who will be chased by the Finanças for back payment.

Shanagarry seems to have a somewhat odd view as to what doing things properly means, given previous postings from him about compliance with residency and IRS requirements when he was a permanent resident here.

[shanagarry]

On the matter of paying the maid - she was paid through the management company, who operated a compliant process for all the people servicing our property. That's what's meant by doing it properly - nothing odd about that - is there?

when he was a permanent resident here

I was never a permanent resident - even though I had hoped to be. I slept there around 84 nights+/- a year. A little matter of 'criminal activity' altered my thinking and forced me to abandon that desire. No regrets - yet - despite the cold and wet