Income Tax Calculation

Each calculation type has its own income tax deduction element.

To determine the income tax withholding, each income tax deduction element:

1. Runs a preprocess formula that determines the calculation base and stores it in a variable (IR VR REN LIQUID).

   To determine the calculation base, this formula:

   1. Compares the simplified monthly deduction and the income tax deduction accumulator amounts, and noting the higher value between the two.

   2. Deducts the amount identified in the previous step from the gross income accumulator.

2. Runs the generic income tax calculation formula (IR FM IRRF).

   This formula is common to the deduction elements for all the income tax calculation types. The formula:

   1. Applies the tax rate from the IRRF table (IR BR PCT IRRF) to the calculation base and determines the amount to withhold for income taxes.

   2. Compares the calculated amount to withhold for income taxes to the minimum amount to withhold for taxes.

      If the calculated amount is less than the minimum amount, the employee's amount to withhold for income taxes equals zero.

The following table lists the income tax deduction elements and preprocess formulas for each income tax calculation type:

Income Tax Calculation Type	Income Tax Deduction Element	Pre-Process Formula
Monthly payment	IRRF	IR FM IRRF SAL
13th salary	IRRF 13 SAL	IR FM IRRF 13SAL
Vacations	IRRF FER	IR FM IRRF FER