Social Contribution changes from March 2020

The Constitutional Amendment 103 (known as Social Security Reform) published in the Federal Official Gazette of Nov-13-2019, modifies the Social Security system, disciplines the transition rules and fixes the transitional provisions related to the General Social Security Regime Social (RGPS).

With the reform, progressive contribution rates were created for both the General Social Welfare Policy (Regime Geral de Previdência Social - “RGPS”), which brings together the insured members of the National Institute of Social Security (INSS), and the Special Welfare Policy (Regime Próprio da Previdência Social “RPPS”), which meets the Union's servers.

Currently, in the social security contribution table, which affects the employee (including domestic) and the self-employed, there are 3 rates applied to the compensation amount: 8% (remuneration of up to BRL 1,751.81), 9% (of BRL 1,751.82 to BRL 2,919.72), and 11% (from BRL 2,919.73 to BRL 5,839.45).

From March 2020, the rates will be applied progressively, focusing on each remuneration range, and no longer on the total amount, observing the following table:

Example:

For workers who receive BRL 5,000.00, the old rule applies the contribution rate of 11%, generating the discount of BRL 550.00. After the change, the contribution calculation (in current values) will be as follows:

In the proposed situation, the contribution increased BRL 15.03. It is noteworthy that when the new assessment form (03/2020) is in force, it will be possible that the minimum salary value has been changed, or even the values of salary ranges.