12 May 2023
Employment Tax
Impact High
Summary
On 8th May 2023 the Brazilian government published Ordinance n. 27/2023 adjusting the calculation basis of the Brazilian social security contributions. The changes will come into effect this month. The social security contribution rates have remained the same since March 2020, however, the amount of income subject to each rate has been adjusted considering the new national minimum wage of BRL 1,320.
The Detail
The updated social security tax rate table is applicable to all beneficiaries of the Brazilian social security system (INSS), including foreign employees working for Brazilian companies or Brazilian individuals working abroad with ties to the Brazilian employer. The employers should implement the required adjustments in the local payroll for May 2023. Thus, as of May 2023, employees will be subject to the payment of monthly social security contributions based on the updated social security tax rate table, with progressive rates from 7.5% up to 14%, as follows:
| Taxable amount (BRL) | Social security rate |
| 0 – 1,320 | 7.5% |
| 1,320.01 – 2,571.29 | 9% |
| 2,571.30 – 3,856.94 | 12% |
| 3,856.95 – 7,507.49 | 14% |
The contributions to the social security system will be applicable in a progressive manner, in accordance with each range of remuneration indicated in the table above. As a result, the new cap amount per month is BRL 876.95 whenever the taxable amount (contribution salary) is equal to or higher than BRL 7,507.49.
How we can help
The Vialto Partners Brazil team can assist clients with identifying the impacts resulting from these changes as well as implementing the required adjustments in the compensation package and payroll processing.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Further information on Vialto Partners can be found here: www.vialtopartners.com
Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
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Further information on Vialto Partners can be found here: www.vialtopartners.com
Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
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