Determining Social Security Contributions
This topic discusses how companies, third parties, and employees should contribute to Social Security through the GPS (Guia da Previdência Social) (Social Security Form).
Companies and equivalent-status contributors are required to contribute to Social Security through Instituto Nacional do Seguro Social (INSS) (Brazilian Social Security Institute) with their own resources in order to finance the benefits due to workers as follows:
Application of the 20 percent rate on the total of the compensation subject to INSS contribution (accumulator), without limit, paid or credited to insured individuals at its service and in case of financial institutions and equivalent-status entities an additional contribution of 2.5 percent will also be payable.
Application of 20 percent rate on the total of compensation or retribution, paid or credited for services rendered to it by insured individual contributor, freelance workers and other individuals without employment bond, and in case of financial institutions and the equivalent-status institutions are subject to an additional contribution of 2.5 percent.
Contribution intended to finance benefits granted according of the level of occurrence of labor disability as a result of working environmental risks at 1 percent, 2 percent and 3 percent rates by the company with low, medium, or high risk of accident in its main activity, respectively, on the total of compensation subject to INSS contribution (accumulator) paid or credited on any account during the month, to insured employees, freelance workers and resident physicians.
Rates will be added by 12 percent, 9 percent, or 6 percent, according to the activity in which the company is engaged with, by the insured worker at service of the company, allows the granting of special retirement at 15, 20, or 25 years of contribution, respectively.
Contribution intended to third parties with variable rate in accordance with the activity developed by the company, applicable on the total of compensation, without limit, paid or credited to employees at its service.
Rates will be defined according to FPAS code of the company. This field is at the establishment level.
Third parties are other entities for which the company pays contribution, such as INCRA, SESC, SENAI, SEBRAE, and education allowance. These contributions are not intended to finance the benefits paid by Social Security, they are collected by INSS and passed over to the respective entities, reflecting directly upon the compensation paid to the employee. Entities for which a company is required to contribute are defined according to the activity developed by it. INSS classifies the company according to the code that identifies the activity developed by the establishment in relation to the Fundo de Previdência e Assistência Social (FPAS) (Pension Fund and Social Assistance). The FPAS defines percentages due to third parties in the GPS. The FPAS code represents the code of the company's activity for INSS classification purposes, which is used to define the percentage of the INSS due to third parties. You set up the code on the Additional Info - Brazil page. With the FPAS code of the establishment, company is informed of the entities for which it has to contribute and the respective rates of contribution.
If the company has a convention signed with third parties such as SESI, SENAI and EDUCATION ALLOWANCE, payment will be made separately from the GPS (Guia da Previdência Social) (Social Security Form).
To determine the amount of contribution to the Seguro de Accidents do Trabalho (SAT) (Workers' Accident Insurance), you enter a percentage on the SAT % 15 Years, SAT % 20 Years, and SAT % 25 Years fields on the Additional Info - Brazil page (). The calculation base of accident is the total of compensation subject to INSS contribution (accumulator).
The company or equivalent status contributor is required to pay a contribution to finance the special retirement of the employees and the benefits granted because of the degree of occurrence of labor disability as a result of the working environmental risks. Contribution is applicable on the compensation paid, due or credited to the employee, on any account during the month in which the rates are of 1 percent for low risk of work accident, 2 percent for medium risk of work accident, and 3 percent for serious risk of work accident. Rates are defined according to the main activity of the company. The main activity of the company is the activity that engages the highest number of employees of the company.
A company exposing employees to substances harmful to health, whether chemicals, physical, or biological risks susceptible for the granting of special retirement, is subject to the payment of an additional rate. Special retirement will be due, once the waiting period is complied with, to the insured employee that has worked under special conditions that may affect the health or the physical integrity for 15, 20, or 25 years.
Every employee is required to contribute toward Social Security. The company discounts the amount of the contribution from the employee's compensation and the calculation is made through the application of percentages in a progressive manner, on the monthly contribution salary. When calculating a contribution note always the maximum limit of contribution salary as the employee's contribution, unlike the contribution due by the company that is applicable on the total of compensation is restricted to the maximum limit. For example, if the maximum limit for contribution salary starting from March of 2020 is BRL 6.101,06 (maximum limit set forth by the government at company level, applying to all employees) and the employee's compensation is BRL 7.000,00, the contribution due by employee will be calculated considering only the limit of BRL 6.101,06. Employee's contribution salary consists of the compensation actually paid or credited on any account, during the month, by one or more companies, including earnings paid in kind.
Although the maternity allowance is a social security benefit, it also constitutes the employee contribution salary. Therefore, contribution will be payable by both, employer and employee, on the values paid on the account of Maternity Allowance. Maternity Allowance may be paid directly by Social Security or the company if it has a convention signed with the INSS.
Family Allowance is a social security benefit paid by the company, with the respective reimbursement by the INSS. Reimbursement occurs through GPS (Guia da Previdência Social) (Social Security Form). Only employees with compensation up to BRL 429,00 (maximum limit stated by the government at company level, that is, for all employees) are entitled to receive Family Allowance. Current value of the family allowance quota is of BRL 10,31.
Companies are required to contribute with 20 percent rate on the value of services rendered by independent workers. Contribution must be paid together with other company contributions through GPS.
A contribution of 20 percent rate is applicable on values paid on the account of compensation to insured businessmen. Contribution must be paid together with company's other contributions through the GPS form.