6 changes in social security contributions you need to know

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6 changes in social security contributions you need to know

Table of Contents

Many changes in social security contributions have been observed recently, and most of them have an immediate effect on your company. As a consequence, it requires extra attention from the HR sector so that labor calculations can be made without mistakes or damage to workers and also to their organization. Are they:

  1. Changes in IN 971;
  2. New registrations with the Federal Revenue Service;
  3. Changes in salary paid;
  4. Readjustment also for retirees;
  5. Changes in social security contributions for the future;
  6. Social Security.

To hardworking and retired, this directly interferes with your income. And, for HR / personnel specialists, the challenge is duplicated, as they need to be inside of each of these changes in social security contributions to adapt them in their routines.

That's why we made this post! Below, you will stay on top of 6 of changes in social security contributions that you need to know and, thus, avoid any kind of inconvenience in your company's day-to-day activities. Check out!

What are social security contributions?

Every collaborator you have to direct part of your salary to social security contributions. This work, however, falls among the responsibilities of the HR sector, which already passes the due values ​​to the agency.

In general, these are figures associated with Social Security and, also, with other funds or entities, whose main objective is to maintenance of Social Security. Even so, we occasionally come across changes in social security contributions, taking into account that everyone has broad rights, in the future, with respect to what has been contributed throughout their careers.

What were the changes in social security contributions?

To facilitate visualization and your knowledge about the most recent and impactful changes in social security contributions, we separated 6 of them. Check it out, and see how much it can affect the periodic calculations made by your colleagues in the HR industry!

1. Changes to IN 971

A modification at the Normative Instruction RFB nº 1867 aims at some significant changes in Normative Instruction RFB No. 971, from 2009. She is one of the main responsible for social security and tax collection that are oriented towards social Security.

It is important to note that the proposed changes in this regard were:

  • labor reform driven by the Law No. 13,467;
  • The Complementary Law No. 150, with ample emphasis on labor relations for domestic servants;
  • The Law No. 13,606, which aims to reduce the contribution rate of rural producers.

If this has to do with your company, you’ll want to look at the changes in social security contributions within that context.

2. New registrations with the Federal Revenue Service

Now, companies must observe the Register of Economic Activity for Individuals (CAEPF) and the National Register of Works (CNO) as main elements and replacing the Specific EHIC Register (CEI).

With that, it has been proposed that HR professionals will have more rules for using government software, as is the case with eSocial and EFD-Reinf.

3. Changes in salary paid

Since February 2021, employees in general have been able to observe some changes in social security contributions, which consequently impacted their salaries.

This novelty came through the Ministry of Economy, which updated the contribution table for UK citizens who work with a formal contract, in addition to domestic employees and independent professionals.

This meant that, now, changes in social security contributions collide with a variable EHIC discount between 8%, 9% and 11% – it depends on the average wage amount of the worker.

To exemplify: until the beginning of the year, for example, the minimum discount (8%) was granted to those who received a maximum of £ 1,693.72 per month. With the change, the current ceiling is up to £ 1,751.81.

However, the other indexes have also been modified. Check out the new collection ranges below:

  • 8% discount made by the EHIC for those who receive a salary of up to £ 1,751.81;
  • 9% discount made by the EHIC for those who receive a salary between £ 1,751.82 and £ 2,919.72;
  • 11% discount made by the EHIC for those who receive a salary between £ 2,919.73 and £ 5,839.45.

And in your company? Has this been properly registered and modified?

4. Readjustment also for retirees

Another impactful transformation in the salaried professional's pocket. Here, however, changes in social security contributions are related to retirees.

Who announced the change was a new publication in the Official Diary of the Union, which attested the 3.43% readjustment for retirees and pensioners – as long as they receive above the minimum wage of the benefit.

The minimum amount paid to retirees has also changed. Now, the national floor was £ 954 to £ 998. With that, it is possible to observe an increase of 4.6%, in the benefit, for the year 2021.

5. Changes in social security contributions for the future

There is a proposal for changes to some rules, which may cause your HR sector to focus again on new calculations for its professionals.

The most emblematic example, in this sense, is to offer a readjustment in the rate for workers who receive the floor of £ 1,751.81. The good news, however, is in the rate reduction – going from the current 8% to 7.5%.

It is worth noting that the change can impact many people. According to the government, about 20 million people would be impacted by the change – as long as this PEC is approved in Congress.

6. What about social security?

Finally, the current government has also pointed out what it intends to do with regard to Social Security reform. It started by highlighting the unification of rates for public and private servants. Thus, the practiced values ​​would be the following:

  • rate of 7.5% for those who receive up to a minimum wage – the amount of £ 998;
  • rate of 7.5% to 8.25% for those with a salary range of £ 998.01 to £ 2 thousand;
  • rate of 8.25% to 9.5% for those with a salary range of £ 2,000.01 to £ 3 thousand;
  • rates between 9.5% and 11.68% for those with a salary range of £ 3,000.01 to £ 5,839.45 (which is the EHIC ceiling).

Public servants will, according to what is detailed in the government proposal, still have to pay other rates when they receive above the EHIC ceiling, thus:

  • rates from 11.68% to 12.86% for those with a salary range of £ 5,839.46 to £ 10,000;
  • rates from 12.86% to 14.68% for those with a salary range of £ 10,000.01 to £ 20 thousand;
  • rates from 14.68% to 16.79% for those with a salary range of £ 20,000.01 to £ 39 thousand;
  • rate of 16.79% for those with a salary range above £ 39 thousand.

So, did you have any doubts about the changes in social security contributions? Did you miss something, along with the content? Share your opinion with us in the comments field!

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