On February 3, 2026, the Brazilian Federal Revenue Service (RFB) issued new guidance on the taxation of performance-based bonuses, through COSIT Ruling No. 10/2026, reformulating the interpretation previously consolidated in COSIT Ruling No. 151/2019.
This new position provides clarity and objective criteria for characterizing the non-incidence of social security contributions on amounts paid to employees as bonuses for superior performance, pursuant to provisions introduced by the Labor Reform (Law No. 13,467/2017).
Legal Context
The Labor Reform introduced, in Sections 2 and 4 of Article 457 of the Consolidation of Labor Laws (CLT), the definition of “bonus” (prêmio) as a non-remunerative payment, not subject to labor or social security charges, even if paid on a habitual basis.
Under this framework, bonuses are only subject to taxation if they are deemed to integrate the employee’s remuneration, which depends on their legal nature (indemnity-based or salary-based)—a matter that has been subject to doctrinal and judicial analysis.
Key Points of COSIT Ruling No. 10/2026
The new ruling consolidated the following principal understandings:
Exclusion from the Social Security Contribution Base
The Federal Revenue Service concluded that bonuses granted at the employer’s discretion in recognition of performance exceeding ordinary expectations, paid as of November 11, 2017, do not form part of the calculation base for social security contributions, including employer contributions.
Requirements for Tax Exclusion
In order for a bonus to be excluded from the social security contribution base, the following criteria must be cumulatively met:
- (i) Paid exclusively to employees (excluding independent contractors);
- (ii) May be paid in cash, goods, or services;
- (iii) Granted at the employer’s discretion, meaning it does not arise from a legal, contractual, or expressly binding obligation;
- (iv) Resulting from performance exceeding ordinary expectations, with objective evidence of established targets and their effective achievement.
Habitual Payment Does Not Automatically Disqualify the Bonus
The ruling emphasizes that the habitual granting of bonuses does not automatically disqualify their special tax treatment, provided that such habituality does not stem from a contractual clause, collective bargaining agreement, or other binding instrument requiring payment, which would eliminate the element of employer discretion.
Practical and Operational Impacts
For Companies
Greater legal certainty in granting bonuses
- With more objective criteria, companies may structure incentive programs without incurring social security contributions, provided legal requirements are met.
Importance of proper documentation
- Objective and measurable performance parameters are essential to substantiate superior performance and prevent tax challenges.
Tax and labor planning
- The new ruling provides technical support for integrating variable compensation policies into performance-based remuneration practices with a focus on tax efficiency.
Limitations and Points of Attention
- While habitual payment does not automatically disqualify a bonus, the manner in which it is instituted may be interpreted as an express agreement if formalized in a binding contract or collective agreement, requiring caution in the design of internal policies.
- The Federal Revenue Service’s interpretation may still be subject to judicial challenge, particularly if deemed excessively restrictive or inconsistent with the literal wording of the law, as previously debated in doctrinal discussions on the matter.
Conclusion
COSIT Ruling No. 10/2026 represents an important interpretative milestone regarding the exclusion of performance-based bonuses from the social security contribution base, providing greater legal predictability for companies adopting variable compensation policies.
Nevertheless, given the requirement for objective proof of superior performance and the absence of a binding payment obligation, companies are advised to formally structure their bonus criteria, in order to mitigate tax and labor risks.