Understand how the new INSS table works for the private sector

20/03/2020

EXPERT OPINION


Understand how the new INSS table works for the private sector


New Social Security rates have been in effect since March 1, affecting the payroll calculation


Leonardo Bezerra


As of March 1, the Social Security contribution rates paid by employees became progressive, in compliance with the provisions of the Social Security Reform (Constitutional Amendment 103).

The change affects workers with a formal contract and who are part of the General Social Security Regime (RGPS).

The new rules are valid for employed taxpayers, including domestic workers, and for single workers. There is no change for the self-employed (individual taxpayers), as service providers to companies and for optional policyholders.

Thus, private initiative workers will already have the INSS discount calculated in March, based on the new contribution table, adjusted according to the definitions of Ordinance No. 914/2020. In the new modality, progressive rates are applied to each remuneration range, similarly to the calculation of Income Tax.




INSS rates


Table valid until February 29,2020


 

Salary

Rate

Until  R$ 1.830,29

8%

From R$ 1.830,30 to R$ 3.050,52

9%

From  R$ 3.050,53 to R$ 6.101,06

11%

 


Table valid from March 1, 2020 onwards:

Contribution Salary

Progressive rate

Until R$ 1.045,00

7,5%

From R$ 1.045,01 to R$ 2.089,60

9%

From R$ 2.089,61 to 3134,40

12%

From  3.134,41 to 6.101,06

14%


It was also defined by the government that the contribution salary may not be less than R$ 1.045,00 (minimum wage) or greater than R$ 6.101,06 (ceiling).

According to the new rules, those who earn less pay lower rates. In turn, whoever earns more, pays more. As the incidence of the contribution will be by income brackets, it is necessary to make a calculation to know what the effective rate will be. How to achieve this result has been a point of doubt for many companies.

For example: now, those who receive a minimum wage per month (R$ 1.045,00) pay 7.5% of this amount. The worker who receives the INSS ceiling (R$ 6.101,06), pays an effective rate of 11.69%, which is the result of the sum of the different rates on each salary range.


How to calculate the effective rate


As the system is progressive, the rates will respect each remuneration range. See the demo:

As the system is progressive, the rates will respect each remuneration range. See the examples below:


Example 1: Salary R$ 1.500,00

Previous Rule

Actual Rule

Effective rate

8%

Calculation of the rate

7,5% above R$ 1.045,00(R$ 78,38)

+

9% above R$ 455,00 (R$ 40,95)

Discount at Payroll

R$ 120,00

Discount at Payroll

R$ 119,33 = 7,96% of salary

(effective rate)


Exemple 2: salary R$ 3.000,00

Previous Rule

Actual Rule

Effective rate

9%

Calculation of the rate

7,5% above R$ 1.045,00 (R$ 78,38)

+

9% above R$ 1.044,60 (R$ 94,01)

+

12% above R$ 910,40 (R$ 109,25)

Discount at Payroll

R$ 270,00

Desconto em folha

R$ 281,63 = 9,39% of salary

(effective rate)


Another way to perform the calculations to reach at the result is to consider the predetermined values in the last column below (portion to be deducted from each range):


From

To

Rate

Portion to be deducted

-

1.045,00

7,5%

-

1.045,01

2.089,60

9%

15,68

2.089,61

3.134,40

12%

78,36

3.134,41

6.101,06

14%

141,05


INSS discount calculator


Above, the calculation method is demonstrated. But, those who just want to reach the final result while still having a comparison between the previous rule and the current one, we can use the calculator developed by Domingues e Pinho Contadores.


Enter the gross salary amount to compare.


INSS discount calculator for private sector employees.



R$


Payroll: advice makes the difference


This is yet another change that affects the way payroll is generated. To keep up with current legislation, companies need to adjust their calculation systems, which requires attention, but it is not a complex task.

However, the payroll management work is much broader and consumes a large number of hours. Therefore, outsourcing the treatment of this service is the solution that brings operational and financial benefits.

Domingues e Pinho Contadores offers guidance to comply with all personnel department routines, including payroll processing in compliance with the laws and with the agility and discretion required by this activity.


Also see: Payroll review: strategy for risk prevention and cost reduction

How DPC may help your company?

Domingues e Pinho Contadores has specialized team ready to assist your company.
Contact us by the e-mail dpc@dpc.com.br

Sign up for our Newsletter:

Are you interested?

Please contact us, so we can understand your demand and offer the best solution for you and your company.

Talk to a specialist
English