The Importance of Taking Advantage of the Tax Benefits of Business Insurance

The Importance of Taking Advantage of the Tax Benefits of Business Insurance

At a time when competitiveness and tax efficiency are critical factors for the success of companies, business insurance is taking on an increasingly strategic role.

More than just protection instruments, Group Life Insurance, Health Insurance and Personal Accident Insurance make it possible to optimise staff costs for tax purposes, strengthen the social benefits policy and increase team motivation and retention.

Corporate Income Tax Benefits

According to the Corporate Income Tax Code, namely Articles 23 and 43 of the CIRC, companies can consider bonuses paid in favour of employees as costs or losses for the year, provided they meet certain criteria.

The maximum cost limit accepted is 15% of the annual wage bill, covering Life, Health, Savings and Personal Accident insurance.

Let's take a look at the tax framework for each type of insurance:

Group Life Insurance

When insurance is taken out with objective and uniform criteria for all employees (for example, all permanent employees), it falls under Article 43 of the CIRC.

In this case, the premiums are deductible from IRC and are not subject to the Single Social Tax (TSU), being considered a benefit not subject to taxation.

If, on the other hand, the insurance only benefits a specific group of employees, it will be considered income from the dependent labour of those beneficiaries, and Article 23 of the CIRC will apply.

🔹 Health Insurance

Group health insurance, when attributed according to uniform criteria, also falls under Article 43 of the CIRC and is deductible from IRC up to the overall limit of 15% of the wage bill.

In addition to tax savings, these solutions help to reduce absenteeism and indirect sickness costs, generating productivity gains.

🔹 Personal Accident Insurance

Personal Accident Insurance follows the same tax framework principle.

When contracted on a collective and non-discriminatory basis, they are deductible from IRC within the same overall limit (15%) provided for in Article 43 of the CIRC.

These policies reinforce protection outside of working hours, complementing the compulsory insurance cover for accidents at work.

Transversal benefits for the company

Regardless of the type of insurance, the adoption of group solutions offers transversal advantages to companies:

Tax optimisation and cost reduction - premiums can be accounted for as costs for the year, reducing the tax burden.

Valuing and motivating employees - insurance works as a social benefit, complementary to remuneration.

Attracting and retaining talent - strengthening the labour bond and the company's image as a responsible employer.

Culture of protection and well-being - contribute to a safer and more stable working environment.

Simplification of benefits management - group contracting facilitates budget control and planning.

Talk to us and find out how to turn your company's insurance into a competitive and fiscal advantage.

Contact 214 131 310

jose.monteiro@grumese.pt