On September 16, 2024, Law 14.973/24 was enacted, establishing important rules related to the payroll tax relief for 17 sectors of the economy, along with other measures.
Maintenance of Payroll Tax Relief in 2024
The new law, the result of an agreement between the Executive and Legislative branches, maintains full payroll tax relief throughout 2024. During this period, companies will continue to replace the employer’s social security contribution of 20% on the payroll with rates ranging from 1% to 4.5% on gross revenue, depending on the economic sector.
Gradual Increase in Payroll Taxation Starting in 2025
Starting January 1, 2025, the process of gradually increasing payroll taxation will begin. The social security contribution for companies will increase by 5% each year, until it reaches 20% again in 2028. This process aims to provide a smooth transition for companies, giving them time to adjust to the return of full contributions.
To retain the benefit of the substitute regime between 2025 and 2027, companies must sign a commitment agreement, ensuring that they will maintain an average number of employees equal to or greater than 75% of the workforce from the previous calendar year. This commitment seeks to guarantee that companies maintain their employment levels during the gradual increase in payroll taxation.
Exemption from Social Security Contributions on the 13th Salary
During the same period, from 2025 to 2027, companies covered by the substitute regime will not be subject to social security contributions on the 13th salary, representing an additional financial relief measure.
Law 14.973/24 reflects a coordinated effort to balance the need for revenue collection with the preservation of competitiveness and employment in the most strategic sectors of the economy. The gradual increase in payroll taxation seeks to mitigate financial impacts, offering companies time for planning and adaptation.