Payroll exemption allows companies in 17 sectors to replace the social security contribution, the 20% on employees’ salaries, with a rate on their gross revenue, which varies from 1% to 4.5%.
Among the 17 categories benefited by the project are information technology services, call center, communication, road freight transport, urban road and metro rail passenger transport, footwear, clothing, textile, animal protein, machinery and equipment and civil construction industries.
The payroll exemption was implemented as a temporary measure in 2012, having been extended since then. The current exemption is valid until December 31, 2023.
The Federal Senate approved PL 334/2023 on October 25, which is the bill that extends the payroll exemption for another four years, but the President of the Republic vetoed this bill in its entirety.
The government is preparing an alternative proposal for PL 334/2023, and intends to publish this information by December 15, 2023.
We advise companies that opt for the payroll exemption to monitor the processing of PL 334/2023 in order to assess possible impacts on the payroll routine, especially regarding the calculation and collection of your company’s social security contribution from January 1, 2024.
Drummond Advisors is prepared to help your company with all issues involving payroll and tax regime, and if you have any questions, don’t hesitate to consult us.
Written by Murilo Fontoura, Personnel Department Coordinator at Drummond Advisors