Tax and labor costs Impact on Payroll

Tax and labor costs impact on payroll

Tax impact on salary

EmployerEmployee
9% (Social Security)13% (Government Pension Fund) or
0.90% (basic tax for work accidents insurance, certain industries)
plus a % based on each industry)
11-12% ( Private pension Fund)
-Income Tax bracket

Other indirect costs (Salary benefits)

Employer
9.72%– 30 days salary (for each year as Services compensation)
8.33%– 30 days salary (bonus on July for National holidays) Require certain conditions
8.33%– 30 days salary (bonus on December for Christmas) Require certain conditions
8.33%– 30 days salary (Annual holidays) Require certain conditions)
0.75%SENATI ( contribution from manufactures only)
45.36%Total cost on salary

Note.- By law, workers also have a profit sharing right. Percentage depends on type of industry.

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