Exemption of payroll is extended to 2023

Law 14,288/2021 establishes the extension of the so-called “payroll exemption” until December 31, 2023, for 17 sectors of the economy.

Published in the Federal Official Journal (Diário Oficial da União) on December 31, 2021, Law 14,288 extended the measures determined by Law 23,543, of December 14, 2011, for two years. Thus, until December 31, 2023, companies of 17 sectors are entitled to replace the payment of the social security quota, whose rate is 20% on the employee’s salary, with rates from 1% to 4.5% on the company’s gross revenue, depending on the sector.

The payroll exemption generates losses in revenue for the government, which is going to be compensated through the continuation of a 1% increase in Cofins-Import tax rate. However, its goal is to encourage these companies to hire personnel, something that, according to the law, will be monitored through mechanisms to be determined by the Executive branch.

What sectors will benefit from it?

Considered intensive regarding workforce, the recipient sectors are:

• information technology

• information and communication technology

• call center

• road public transport

• civil construction (some categories)

• railway public transport

• subway public transport

• construction and infrastructure works

• footwear

• clothing (sales and manufacture)

• vehicle and bodywork manufacture

• machinery and equipment

• animal protein

• textile

• integrated circuit design

• communication

• leather goods

How to opt in?

To choose this system, companies must express their will by means of payment of Social Contribution on Gross Revenue (Contribuição Previdenciária sobre a Receita Bruta, or CPRB) pertaining January of each year affected by the extension. Nevertheless, it is important to be sure when it comes to making a decision as this option is irrevocable.

Labor law-related orientation and update

DPC keeps companies up to date with any legal change possible, orienting them as regards new possibilities and assuring compliance with obligations at the same time. Keep out of risks and talk to a specialist: dpc@dpc.com.br.