IRPF Calculation Overview

To calculate an employee's withholding percentage, the system:

1. Estimates the total annual income.

2. (State territory only) Estimates the social security contribution.

3. (State territory only) Calculates the available reductions.

   These include deductions for dependents, any personal deductions due to age or disability, and any spousal garnishments.

4. (State territory only) Subtracts the social security contribution and the available reductions from the total annual income.

   Note:

   The annual income for historical territories is reduced if needed by spousal garnishments and reductions linked to irregular income, which are the starting point for getting the IRPF percentage.

5. Calculates the withholding percentage.

   The system generates the withholding percentage based on the previous steps. If needed, you can alter this percentage, but the system uses it only if it is higher than the one it calculated.

See Reviewing and Updating System Information.