Allowable Tax Deductions

The accumulators for each type of income tax calculation (IR DEDUCOES, IR DEDUCOES 13S, and IR DEDUCOES FER) accumulate allowable tax deductions. Global Payroll for Brazil provides delivered deductions elements for the following allowable deductions:

• Alimony in compliance with court decision including pensions.

• Deductions for qualifying dependents.

• Contributions to social security (INSS).

• Contributions for private pension fund and the individual planned retirement fund (FAPI).

• Income from retirements and pensions.

Data for Retirement and Dependent Deductions

To ensure that the system calculates the proper deductions:

• Select the IR Ded Retirement check box on the Payee Parameters page (Global Payroll & Absence Mgmt, and then Payee Data, and then Define Payee Parameters BRA) for payees who are inactive retirees.

  Inactive retirees are entitled to an additional deduction from their gross income for income tax purposes.

• Enter dependent data on the Dependent Information - Personal Profile page in PeopleSoft HR.

Calculating Dependents

Using the information entered for each dependent in PeopleSoft HR (gathered using an array), the system uses the formula IR FM NUM DEP IR to determine whether each dependent meets the conditions that enable an employee to claim an income tax deduction for the dependent. For example, the dependent's economic status must be Dependent or Dependent/Beneficiary to qualify as a dependent for income tax purposes. The system flags each dependent that meets these criteria.

When calculating income tax, the system multiplies the total number of dependents by the deduction amount per dependent to determine the employee's total deduction amount for dependents.

You can view the number of dependents for income tax on the Review Dependent Data BRA page.

See Viewing Dependents.