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How to calculate unemployment benefit (with example)

If you have become or are about to become unemployed, it is convenient to know how to calculate unemployment benefits. We help.

No one is exempt from being unemployed. Fortunately, many workers know they can count on unemployment protection. But do they know how to do it? calculation of unemployment benefit?

It is necessary to anticipate the impact that the drop in income will have on your family budget, and what amount you will effectively have at your disposal to continue to meet all your financial responsibilities.

The importance of calculating unemployment benefit

If you anticipate becoming unemployed, you should make predictions and do some planning to know in advance how much unemployment benefit you can count on.

Calculating unemployment benefit is therefore a key factor in preparing for a new reality. We help you with the bills, sharing with you a practical guide on how to determine the amount you will be entitled to if you become involuntarily unemployed.

Practical guide to calculating unemployment benefit

First of all, it is important to know if you meet the resource condition to be entitled to unemployment benefits.

That is, you must have worked for at least 360 days as an employee with registered earnings in the 24 months preceding the date of involuntary unemployment. The amount of the subsidy itself will correspond to 65% of the reference remuneration, with the minimum amount being equivalent to Social Support Index which, in 2023, is 480.43 euros; and the maximum value is the equivalent of 2.5 times the IAS, that is, 1201.08 euros.

That said, how much subsidy are you entitled to? How to calculate unemployment benefit? Let’s see, step by step, how to calculate this amount

1st step

Firstly, you must calculate the total wages declared in the first 12 months of the last 14, starting from the month prior to the month in which you became unemployed, plus holiday and Christmas subsidies declared and due during these 12 months (a maximum of one holiday allowance and a Christmas allowance).

2nd step

Once this amount has been determined, you must calculate the value of the reference remuneration. To do this, just divide the total sums by 12. This figure will be the basis for calculating unemployment benefits.

3rd step

Once the reference remuneration has been calculated, this value is multiplied by 0.65, thus obtaining the monthly amount of the unemployment subsidy. The calculation must be made based on 30 days per month.

4th step

It should also be borne in mind that the unemployment subsidy cannot exceed 75% of the net reference remuneration used for calculation, without prejudice to the guarantee of the minimum amount of the IAS or the net value of the reference remuneration if this remuneration is lower than the IAS. Under no circumstances may it be higher than the net value of the reference remuneration used for calculation.

In order to determine the net value of the reference remuneration, the values ​​corresponding to the IRS rate and the social security contribution rate in force must be deducted from the gross value of the reference remuneration.

Accounts to be done example

Let’s take the case of João: he is 35 years old, single and has no children. He had a gross salary of 1,000 euros. He has been working for 10 years (120 months) and became unemployed in December 2022.

Calculate the subsidy according to the steps we have indicated:

  • Total earnings in the last 12 months (including Christmas and holiday allowances) = 14,000 euros
  • Reference salary = 14,000 euros / 12 = 1,166.67 euros
  • Unemployment benefit = 1,166.67 euros * 0.65 = 758.33 euros

But you have to take into account the minimum and maximum limits. And, for that, you have to calculate the net value of the reference remuneration:

  • Reference net remuneration = Reference remuneration – (Social Security contributions + IRS withholding tax – in this case 14.2%) = 1166.67 euros – (128.33 euros + 165.66 euros) = 872 , 68 euros;
  • 75% of the reference net remuneration = 872.68 x 0.75 = 654.51 euros

Like this, the value of João’s unemployment benefit will be 654.51 euros per month.

How to apply for unemployment benefit?

Firstly, you must register with the employment office before applying for the subsidy. Unemployment benefit must be applied for, by the beneficiary, within a maximum period of 90 consecutive days (including holidays and weekends) from the effective date of unemployment, at the employment center in your area of ​​residence.

Submission of the application after the 90-day period, but during the legal period for granting the benefits, implies a reduction in the respective granting period, for the time corresponding to the period of delay.

Increase in the amount of unemployment benefit

It is also necessary to take into account this important factor: the value of the unemployment subsidy may be subject to an increase. This situation may occur if:

  • In the same household, spouses or people living in a de facto union are receiving unemployment benefit and have children or equivalent to a position holder of family allowance. In this case, the amount of the unemployment subsidy is increased by 25% of its amount for each beneficiary of the benefit;
  • In the case of a single-parent household, the amount of unemployment benefit is also increased by 25% if the unemployment benefit holder is the only adult living with the child(ren) who are entitled to family benefit .

Taking all these factors into account, you can now determine the amount of your subsidy in case you lose your job. The loss of salary is indeed a delicate situation, but fortunately the unemployment protection granted to Portuguese citizens allows them to look for a new job in conditions of greater financial security.

self-employed person reviewing documents

See too
Unemployment Benefits for Green Receipts: The Essential Guide

Article originally published in July 2019. Last updated in February 2023.

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