Calculating Social Security (INSS) Payments

Bracket IN BR PCT INSS (INSS Table) stores the information that is used to calculate certain social security taxes to be paid by employees.

In this table, each contribution salary range (with the minimum amount of the range listed in the IN VR BASE INSS column) is associated with a tax percentage value, an accumulated INSS amount from previous salary ranges, and the minimum amount of the current range for tax calculations.

The system uses information from the INSS table to calculate INSS and INSS for income tax deductions.

See Also Calculating INSS and Calculating INSS for Income Tax.

INSS tax is calculated using a progressive calculation system in which an employee’s taxable income is taxed at an increasing rate as the income increases, up to the maximum contribution limit. Based on the INSS table listed, for an employee who earns a monthly pay of $3600, the first range of monthly pay up to $1044.99 is taxed at 7.5%, the second range between $1045 and $2089.59 at 9%, the third range between $2089.60 and 3134.39 at 12%, and the remaining $465.60 ($3600 - $3134.4) at 14%.

Deduction INSS SAL CON (INSS - Salary for Contribution) uses the Amount calculation rule, where the amount is determined by formula IN FM SAL CONTR (INSS Salary for Contrib. Calc). Formula IN FM SAL CONTR calculates the INSS salary contributions as the minimum of variable IN VR LIM INSS (legal limit for INSS) and accumulator INSS BASE TOTAL (Social Security Accumulator).

Deduction INSS SAL CON (INSS - Salary for Contribution) is a "dummy" deduction, created to keep this amount and also for demonstration.

The INSS BASE TOTAL accumulator contains all the employee earnings that contribute toward INSS.

The base calculation amount (accumulator) is compared to the (legal) limit amount for contribution and is used as the contribution amount if the base is less than or equal to the limit.

If the INSS BASE TOTAL accumulator is less than the limit in variable IN VR LIM INSS, then accumulator INSS BASE TOTAL ⇒ deduction INSS SAL CON. If accumulator INSS BASE TOTAL is greater than the limit in variable IN VR LIM INSS, then IN VR LIM INSS ⇒ deduction INSS SAL CON.

When the INSS BASE TOTAL accumulator includes the employee total base, a "dummy" deduction, INSS SAL CON, is used to ensure that the amount is considered in the contribution calculation.

Formula IN FM INSS ALIQ EF returns the actual tax rate that is used to calculate the INSS amounts. It uses the employee's salary contribution base to obtain the corresponding tax percentage value, accumulated INSS amount (from previous salary ranges), and INSS current step amount (the minimum amount of the current salary range) from bracket IN BR PCT INSS. First, it subtracts the INSS current step amount from the salary contribution base to get the taxable amount from the highest salary range, and multiplies this amount by the tax percentage to get the INSS amount to be paid for the highest salary range. Then, it calculates the actual tax rate by adding this INSS amount and the accumulated INSS amount from previous salary ranges, multiplying the subtotal by 100, and dividing it by the employee's salary contribution base.

Suppose that an employee’s salary for contribution is $3,600.00, and based on the INSS table listed in the Calculating INSS with IN BR PCT INSS Bracket Data section, the corresponding tax percentage, accumulated INSS amount, and INSS current step amount are 14%, $3134.40, and $297.75.

The actual tax rate is calculated as:

Using the Base × Percent calculation rule, the INSS amount (or deduction) is calculated as:

The deduction adds to the TOTAL DESCONTOS N (Deductions Total Not Maintained), PA INSS (INSS Base), INSS_VRPER (INSS), and INSS_VRMEN (INSS) accumulators.

CPMF has expired. The system defines the same percentage in bracket IN BR PCT INSS for the bracket result and for the IN VR PCT INS CPMF variable, which is used to calculate the INSS deduction.

Deduction INSS CALC IR (INSS for Income Tax) uses the Base × Percent calculation rule where the Base is determined by deduction INSS SAL CON (INSS - Salary for Contribution) and the Percentage is determined by formula IN FM INSS ALIQ EF (INSS Effective Tax Rate). Refer to the Calculating INSS section for more information about formula IN FM INSS ALIQ EF.

The deduction contributes to the IR DEDUCOES (Income Tax Deductions) accumulator and corresponds to the INSS amount calculated by using the INSS effective tax rate.

This is a "dummy" deduction and the amount is deductible for Income Tax and is used for legal reports.

All of the deductions—IN GPS APO15 (SS – Retirement, 15 Years), IN GPS APO20 (SS – Retirement, 20 Years) and IN GPS APO25 (SS- Retirement, 25 Years)—use the Base × Percent calculation rule where the Base is determined by accumulator INSS BASE TOTAL and the percentage is determined by the related variables, respectively IN VR SAT PCT 15, IN VR SAT PCT 20 and IN VR SAT PCT 25.

The deductions also use the related Generation Controls—IN GC VERIF APO 15, GC VERIF APO 20, and GC VERIF APO 25, respectively.

According to the SEFIP Risk Level value on the Payee Parameters page, one of these three dummy deductions should be calculated. If the value is Default, the default value can be found on the Position/Jobcode Parms BRA page. These default values can de defined per position, per location and associated job code, per location, or per job code. You build the rules that define how the system should handle these values, in case of different options for location and job.